Panama, the Republic of
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Capital: Panama,
the Republic of
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Population: 2,961,000
(est. 2003)
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Languages: Spanish
(official), English
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Area: 75,990 sq.
km (land area)
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Currency: Balboa
(PAB); US dollar (USD)
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Fiscal year: Calender
year
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Independence status:
03/11/1903 (from Colombia)
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BACKGROUND
PANAMA is situated on the isthmus between North and
South America and covers 29,700 square miles, including
the Colon Free Zone at the Atlantic entrance to the
Panama Canal. Transportation facilities are excellent,
with sea, air and land routes easily available. The
economy is based primarily on a well-developed services
sector, including operating the Panama Canal, banking,
the Colon Free Zone, insurance, container ports, flagship
registry, and tourism.
Legal System
Panama was the first country to introduce modern legislation
permitting the creation of offshore companies for
tax planning purposes. Panamanian Law is primarily
based on the Spanish Civil Code, with company laws
taken from the corporation laws of Delaware, USA.
Currency
There is no exchange control and corporations may
trnasfer funds with complete freedom. Transactions
may be carried in any currency. The official currency
is Balboa, which, under a monetary agreement with
the United States since 1904, is at par with USD and
is freely convertible. US dollar is a legal tender
freely circulates in Panama.
Confidentiality
Unless violations of Panamanian Laws occur, a Panama
corporation cannot be forced to divulge confidential
information to Panamanian or foreign authorities.
In addition, bearer share is permitted. As per Law
Decree No. 9 of 26 February 1998, the identity of
the bank account holders cannot be divulged unless
the deposits are guarantees of assets and the accounts
are under investigation or supervision by the Superintendent.
Taxation
Panama offers complete tax exemption on foreign source
income and on transactions carried outside the Republic
of Panama. Exempted company is a company carrying
on businesses outside Panama is having total exemption
of taxes in Panama.
Legislations
Panamanian corporation law offers a wide variety of
incentives for resident or non-resident businessmen
and investors due to the flexibility of the fiscal
law. The formation and operation of corporations ("Sociedades
Anonimas") are matters governed by the Law No.
32 of 1927. The existing legislation provides, among
others, the following characteristics:
