Panama company formation requires that you hire a Panama law firm in order to legally create a new company in Panama. This is commonly known as creating a “offshore company”. Offshore company formation is all about creating a company “offshore,” meaning away from your home country.
The best countries for an offshore company formation are international financial centers or international business centers which are popularly called “tax havens”. The reasons why these countries are better for an offshore company is that they offer privacy, low costs, and little or no taxation. Panama company formation offers company founders no taxation on income earned outside of its territory.
Panama company formation provides privacy because the owner usually wants to avoid his home country’s government intruding in his financial affairs. Other reasons for privacy are to avoid ex-spouses, hide from debt collectors, and to prevent civil lawsuits. These can be accomplished by using a tax haven country with useful anonymous legal entity ownership laws like Panama.
Having offshore bank accounts in one’s own name creates unwanted public exposure. The offshore bank account should be in the name of the Panama company. In order for the offshore company registration to be truly private requires the use of one or more of these legal entities in an anonymous ownership capacity. One way to accomplish this when creating a Panama company is to hire the law firm creating the offshore corporation and use its staff as the directors and officers of the corporation. These are known as “Nominee” officers and directors. To protect one from renegade corporate directors and officers is to create an agreement with the law firm requiring the directors and officers to follow the orders of the majority shareholders at all times. Our law firm includes pre-signed, undated, resignation letters from every director and officer so the true owner can fire them at any time. However, this would require new officers and directors. The main theme for Panama company formation privacy is not to have the true owner’s name appear in public records or the official corporate records as the name of the board of directors and officers will.
Little or no taxes are another reason for Panama company formation. Why pay income taxes if you don’t have to? Some people feel they are over taxed by their home country. Others want a nest egg outside of his or her country. Offshore company formation in Panama solves these dilemmas. Panama offers no income tax and no corporation tax for its offshore corporations as long as they do their business offshore and do not sell products or provide services inside the country. Online products and services available to anyone around the globe are perfect businesses for formation in Panama.
Panama corporation formation is not expensive. European countries tend to charge at least twice as much for offshore formation than Panama. Our law firm only charges $1,000 USD for forming a corporation while the government only charges $300 USD per year to register the corporation and keep it in good standing.