Exploring Shelf Corporations for Panama International Business Companies

Panama International Business Company

In the world of international business, agility and strategic positioning are paramount. Entrepreneurs and investors constantly seek efficient, compliant ways to expand their operations globally. One such pathway is through the acquisition of shelf corporations, a concept that has gained traction among savvy business professionals seeking a foothold in competitive markets. PANAMA LEGAL CENTER, a trusted law firm based in Panama, specializes in providing these unique corporate solutions, offering a seamless entry into the world of Panama International Business Companies (IBCs). This article delves into the essence of shelf corporations, shedding light on their utility, advantages, and the bespoke services offered by Panama Legal Center to navigate this intricate landscape. Whether for banking, contracting, or tax planning, understanding the role and benefits of Panama shelf corporations can be a game-changer for businesses aiming for global expansion. Join us as we explore the intricacies of these entities and how Delvalle & Delvalle stands at the forefront of facilitating their acquisition and strategic utilization.

Understanding Shelf Corporations

Shelf corporations, also known as aged corporations, are public limited companies that have been legally established but have not engaged in any business activities. Panama Legal Center, a trusted law firm in Panama, specializes in the creation and provision of these entities. These corporations are uniquely positioned to be transferred to clients who require an already established company for various strategic purposes.

A key aspect of shelf corporations is their “on the shelf” aging process. This period of inactivity is not a sign of dormancy but rather a strategic preparation, making them an attractive option for businesses looking to establish an immediate presence in a foreign market. Panama Legal Center plays a critical role in this process, ensuring that these entities are maintained in good standing, ready to be mobilized for commercial activities at a moment’s notice.

Advantages of Panama Shelf Corporations

Shelf corporations offer several benefits, especially within the context of Panama’s business-friendly environment. Panama Legal Center highlights the following key advantages for businesses opting to utilize these entities:

• Speed of Implementation: Given their pre-established status, shelf corporations allow for rapid business deployment, bypassing the time-consuming processes of company creation and registration.
• Banking and Finance: These corporations can significantly streamline the process of opening bank accounts in jurisdictions where a history of business operation is a prerequisite. Our corporate attorneys expertly navigates these requirements, facilitating smoother transactions for their clients.
• Contractual and Business Agreements: Engaging in certain contracts requires a company to demonstrate a history of existence. Shelf corporations fulfill this criterion effortlessly, making them an ideal choice for businesses looking to expand their contractual capabilities swiftly.
• Tax Planning: Utilizing a shelf corporation can offer distinct advantages in tax planning and strategy implementation. Our attorney’s expertise in this area ensures that businesses can leverage the most beneficial tax structures available to international companies in Panama.
• Considerations for Utilization: While shelf corporations offer a host of benefits, Panama Legal Center’s attorneys advises clients to carefully consider their specific business needs and objectives when selecting a shelf corporation. The firm provides comprehensive guidance to ensure that the chosen entity aligns perfectly with the client’s strategic goals.

The shelf corporations represent a strategic asset for businesses looking to establish or expand their operations with speed, efficiency, and legal compliance. Through the expert services provided by Panama Legal Center’s attorneys, companies can leverage these entities to achieve their international business objectives in Panama and beyond.

The Services of Panama Legal Center

Panama Legal Center stands out for its comprehensive suite of services tailored to assist clients in acquiring and optimizing shelf corporations. Recognizing the unique needs of each business, the firm offers personalized guidance from the initial selection process to the final acquisition and beyond.

Key Services Include:

• Selection Assistance: Panama Legal Center’s expertise is invaluable in helping clients choose the right shelf corporation that aligns with their business goals. They consider factors like the corporation’s age, legal standing, and potential for meeting specific business objectives.
• Legal and Administrative Support: Beyond selection, we provide a full spectrum of legal and administrative services to ensure the smooth transition of ownership and compliance with Panamanian laws. This includes handling all necessary paperwork, due diligence, and legal formalities.
• Banking and Financial Navigation: Leveraging their extensive network and experience, we assist clients in setting up banking relationships, a crucial step for operational readiness.
• Strategic Planning: The firm offers strategic planning services, including tax optimization and business strategy consultation, to ensure clients fully capitalize on their investment in a shelf corporation.

Pricing and Considerations

The pricing of shelf corporations is influenced by several factors, primarily the age of the corporation. Older corporations often command higher prices due to their established history, which can be a critical factor for businesses seeking to gain immediate trust and credibility.

Key Pricing Considerations:

• Age of the Corporation: The year of creation plays a significant role in determining the price, with older entities typically being more expensive.
• Included Services: The cost may also reflect the range of services provided by Panama Legal Center, including legal support, administrative handling, and strategic planning assistance.
• Custom Requirements: Any additional customizations or specific requests by the client can influence the final pricing.
• Important Considerations: Clients should carefully evaluate their business needs and objectives against the characteristics and history of the shelf corporation. Panama Legal Center emphasizes the importance of aligning the corporation’s profile with the client’s strategic goals, ensuring a seamless integration into their business operations.

Our experienced corporate attorneys provide a robust support system for businesses to thrive. With their expertise, clients can navigate the complexities of international business with confidence, making informed decisions that align with their long-term objectives. Pricing, while an important factor, should be considered in the context of the strategic value and comprehensive support offered by us.

Shelf corporations offer a strategic advantage for businesses looking to establish or expand their presence in international markets quickly and efficiently. Through the specialized services provided by us, companies can navigate the complexities of acquiring and utilizing these entities in Panama with ease. The firm’s expertise in legal, financial, and strategic planning ensures that each client’s specific needs are met, enabling them to leverage the full potential of shelf corporations for their business endeavors.

Panama Legal Center’s commitment to excellence and personalized support sets them apart as a premier law firm for businesses seeking to invest in Panama’s vibrant economy through shelf corporations. Clients benefit from a seamless acquisition process, expert guidance on compliance and strategy, and a partnership that extends beyond the initial transaction.

As businesses continue to seek efficient, compliant ways to enter new markets, the role of shelf corporations and the expert services provided by our attorneys will remain invaluable. Their dedication to facilitating business growth and expansion in Panama underscores the importance of having a knowledgeable and experienced partner in today’s competitive global landscape.

The price of these shelf corporations will depend on the year of their creation. For more information, don’t hesitate in contacting us.

PANAMA COMPANY CHARACTERISTICS

1. Is it necessary for the shareholders or directors to come to Panama for the Company formation?
No, it is not necessary. Our law firm will be in charge of the entire process and send the package of incorporation directly to your door by courier.

2. How long does the procedure of incorporation of the Panama Company take?
This will depend on the plan the client selects. The estimated time is between 4 to 6 business days.

3. Can the name of the Company be in any language?
Yes, as long as they have the corresponding abbreviatures (Corp., Inc. or S.A)

4. Is there any difference between the abbreviatures Corp., Inc. or S.A?
No, there is no difference. It is the client’s choice which to use. They are all the same juridical figures.

5. Who are the subscribers, and what is their role in a Company?
Our law establishes that the Articles of Incorporation of the entity must have a minimum of two (2) persons, of legal age and of any nationality that will appear by Notary Public to sign the notary protocol.

In most cases, two of our staff members will represent our client at the Notary Public to sign the Articles of Incorporation, so our client does not have to come and sign these documents personally.

6. What is the authorized capital in a Panamanian Company?
The authorized capital is the capital that will appear in the Articles of the Incorporation and has to be a minimum of US$10,000.00. Companies do not require any paid-in capital or any specific amount of money for the Company to operate.

7. What is the minimum authorized capital that the Company must have to be incorporated?
The minimum for the authorized capital is US$10,000.00. This capital does not require any paid-in capital or any specific amount of money for the company to operate.

8. The Standard capital·is US$10,000.00, does it has to be paid in full? Does it have to exist?
Not necessarily. This is only on paper, which means that the  Company may or may not possess any assets.

9. Can a Panama Company be registered with an authorized capital higher than US$10,000.00?
Yes. In this case, the client must pay an additional fee to the Public Registry in Panama, depending on the amount of the authorized capital the client will register.

10. To increase the authorized capital, is it required to have a specified reason, or will it depend on the Board of Directors/Shareholders protocolized reunion?
The authorized capital of any Panama Company can be increased at any time, without a specific reason. The board can make these decisions of directors or the shareholders.

11. How many shareholders are required for a Panamanian Company to exist?
A Panamanian Company can have as many shareholders as the client wishes.

12. Can the shareholders be of any nationality?
Yes. The shareholders can be natural or juridical persons of any nationality and with any domicile.

13. Can a shareholder of a Panamanian  Company be the shareholder of another Company or other juridical figure?
Yes. A Panamanian  Company can be the shareholder of another Company or any other juridical figure. This is really common in Holding Companies. They appear as a majority of shareholders of a group of other Companies. Also, a private foundation (Panama PIF) can be the shareholder of a Panamanian  Company.

14. What is the responsibility of the shareholders in a Panamanian  Company?
The responsibility will depend on the number of shares owned.

15. When the shares are bearer issued, do they need to be fully paid?
Our law requires that the bearer shares be paid entirely, but this does not apply in practice.

16. Is it possible to issue bearer shares?
Yes. Our law is one of the few in the world that allows this.

17. What is the difference between issued bearer shares and nominative shares?
Bearer shares are issued without indicating the name of the owner. The owner will be the physical holder of the bearer’s share. On the other hand, nominative shares are issued using the name of the owner.

18. Which shares are better and most commonly used; bearer or nominative?
Both have benefits; the bearer shares are easier to transfer, but the nominative shares are safer because they specify who the shareowner is.

19. Once the Company is registered, can the shares be offered publicly for sale in any medium, including the internet?
Yes. But it will depend on where the share sale will be made and if it’s going to be a public or private sale. If it’s a public sale taking place inside Panamanian territory, the law requires that the National Securities Commission of Panama does this. If it’s a private sale, this is not required.

20. Who are the members of the board of directors of a Panamanian Company?
The board of directors is the organism that is in charge of the maintenance of the company.

21. Do the members of the board of directors have to be Panamanian?
No. Our law states that members of the board of directors can be of any citizenship.

22. What is the required number of members for the board of directors?
Our law requires a minimum of three and a maximum of seven.

23. Can a board member of directors be the President, Secretary, and Treasurer of the corporation?
Yes.

24. What are the nominee directors?
If for confidentiality reasons, the client does not want to appear in any public document, we provide the three directors required by law. This way, our client’s identity, and residence will not be disclosed in any public document but rather the directors we provide.

25. What is the difference between appointing your own directors and choosing the nominee directors’ service?
If you choose the nominee directors service, you and your partner’s identities will be protected, conserving the anonymity of the real owners of the company. This means that when the Public Registry issues a public document, our nominee director’s names will appear on paper instead of yours.

26. Will the nominee directors appointed by Delvalle & Delvalle participate in any company’s activities?
No. Our nominee directors will not participate in any of the company activities. There will only be a board of directors or shareholders meeting when requested by the proxies or shareholders.

27. Do the shareholders have to be members of the board of directors?
No. It is important not to confuse these figures. The Board of Directors is the administrative body. The shareholders are the real owners of the  Company.

28. The board of directors is composed of three directors. Can only one of them occupy the three 3 dignitaries’ charges?
Yes. Only one director can be the president, secretary, and treasurer.

29. Do the shareholders/board of directors need to meet a certain amount of times per year?
Not necessarily. This will depend on what is established in the Articles of Incorporation.

30. What is the resident agent’s duty?
The resident agent is the attorney or law firm in charge of the incorporation process of the Articles of Incorporation of the  Company.
Our law requires that every Company have a resident agent (Suitable Panama lawyer) to represent the company.

For those Panama Companies that operate overseas or whose directors and shareholders live abroad, the Resident Agent will represent them when the Company acts.

31. Does the Resident Agent have any participation in the decision-making of the Company?
No. The only ones with the power of decision are the shareholders, proxies, and directors, depending on the specific case. The Resident Agent will only be in charge of registering all the acts made by these parties.

32. Can the Resident Agent be replaced or removed by an attorney at any given time, or do they need authorization from them?
No. The Resident Agent can be removed or replaced by another at any time. The decision is up to the shareholders or directors.

33. What is the Public Registry of Panama?
The Public Registry of Panama is a Government Institution in charge of all the Companies registered under Panamanian Law.
The Public Registry of Panama is one of the most organized, efficient, and well-established in all of Latin America.

34. What is the “registration data” of a Company?
The registration data of a company are the numbers that the Public Registry of Panama uses to identify the Company internally and individually.
When a Company is registered in this institution, the system will automatically give the Company two numbers, the document, and file. These numbers will be on the last page of the Articles of Incorporation with a seal that gives the Public Registry of Panama.

35. Are the Articles of Incorporation inscribed in the Public Registry of Panama public?
Yes, this is a public document, and it can be accessed by anyone (national and foreigners).

The Public Registry has two systems on the Internet. They are available worldwide; “Redi,” where you can see the Articles of Incorporation and Emulator, where you can see a resume with the company’s most important information.

36. What information does one need to search for a Company in the Public Registry of Panama?
The person must know the Company’s full name and the registration data of the Company (File and Document).

37. What kind of public information is available?
The following information from the Articles of Incorporation is available: the subscribers, the name of the Company, the authorized capital, the full name of the directors/dignitaries, the address of the directors/dignitaries, the duty of each dignitary, and finally, a power of attorney, in case the client chooses the power in a public document.

38. Will the shareholders’ identity be disclosed on the Articles of Incorporation that is inscribed in the Public Registry of Panama?
No. Our law establishes that the shareholders are secret and anonymous, which means that their names will not be disclosed in any public document.
The shareholders will only appear in private documents (The Shares and the Shares book).

39. For the benefit of the client’s, partner’s, and shareholder’s identity protection, do you recommend the use of nominee directors?
Yes, this way, the names, and addresses registered will be only the ones from our nominee directors.

40. If this is the case, will they have the power to make financial and managerial decisions?
If the clients choose to obtain the nominee director’s service, the people that the client designates will have a power of attorney in a private document, giving them the authority to represent the company in any decision without the authorization of the board of directors.

41. What is the annual tax that a Panamanian  Company is required to pay?
Panamanian Companies are subject to a corporate tax payment denominated “Annual Franchise Tax,” which is US$300.00.

42. When does a Panamanian  Company begin paying taxes? After the registration date, or are there any specific predetermined dates?
Yes, there are predetermined dates, but our law firm prefers that our clients pay the annual tax fee by the year of registration of the Company to avoid unnecessary surcharges.

43. Once the annual tax fee is duly paid, would you be in charge of paying the annual tax fee?
Yes, since we are the Resident Agent for your  Company, we are in charge of paying your annual taxes. We will fax or e-mail you a copy of the official receipt of the annual franchise payment.

44. Is it required to pay taxes if my Panama Company operates overseas?
No. All financial activities from any Panamanian  Company made outside Panama are tax exempt.

45. If a Panamanian Company is operating exclusively overseas, is it necessary to present an income tax statement to the Panamanian Government?
In this case, the client has the option of presenting the income tax statement in zero (The client will not have to pay anything) or not presenting any statement to the Panamanian Government.

46. If some of the commercial or business activities from the Panamanian Company are going to be made in Panamanian territory and others overseas, do I have to pay taxes in Panama?
You will only have to pay taxes from income made in Panama; overseas activities are tax exempt.

47. How much tax does the Company have to pay for commercial activities made in Panama?
The Panamanian Companies that have Panamanian income must pay 30% of their earnings. Companies in Panama that generate income thru rent must pay 30% tax over their earnings.

48. If I have a Panamanian commercial bank account in the name of a Panamanian  Company, do I need to pay taxes from the interest earned on this account, even if the money is a product of commercial activities made overseas?
No, you will not have to pay any tax from the interest earned.

49. To bill in the name of the Panamanian Company, is it required to have a commercial address (office) in Panama?
No, it is not necessary.

50. Are non-Panamanian residents hired by a Company required to pay taxes?
They are not required to pay taxes if the rent originated outside of Panama, even though the Company that hired them is registered in Panama.

51. What kind of assets can a Panamanian  Company own?
A Panamanian Company can be the titleholder of assets worldwide, such as · bonds/stocks, values, shares from other companies, real estate, aircraft, yachts and vessels, and more.

52. Can a Panamanian  Company be the owner of assets that are located outside Panama?
Yes, it can be the owner of assets from any country in the World, but these will also depend on where the asset is located. Different countries have different legislation regarding this matter. In some countries, it is not convenient to have an asset in the Panamanian Company’s name for tax purposes.

53. What is the annual fee that a Panamanian Company has to pay to maintain itself, and what does this include?
They have to pay the following:
Annual tax payment denominated “Annual Franchise Tax” of US$300.00.
Resident Agent fees of US$300.00.
In case you·have a nominee director’s service, you will also have to pay US$300.00

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