Panama Offshore Company Registration with Bank Account
Form a Panamanian IBC Introduction
A Panama IBC is popular with foreigners. The Republic of Panama enacted its corporation law in 1927 which governs the formation and activities of Panama International Business Companies.
Background
Panama is a Central American country. Its official name is the “Republic of Panama”. It is bordered by Colombia (in South America) to the south-east, Costa Rica to the west, the Pacific Ocean to the south and the Atlantic Ocean & Caribbean Sea to the north. Its total land area is 28,600 square miles (74,100 square kilometres). Panama City is its capital and largest city is home to nearly half of the country’s 4.2 million people.
With help from the U. S., Panama seceded from Colombia in
1903. The Panama Canal was built by the U.S. Army Corps of Engineers between 1904 and 1914. In 1977 an agreement was signed for the total transfer of the Canal from the United States to Panama by the end of the 20th century, which culminated on 31 December 1999.
Panama is an independent, sovereign state, run by an elected presidential government. Globally, it has earned the reputation as being one of the best business and financial centers in the world. The economy in Panama is both growing quickly and currently boasts of having the biggest income per capita found in Central America.
Panama Corporation Benefits
Panama corporation has some benefits including:
Tax Free Income
Panama is a territorial tax country where only income and profits earned doing business within its territory are subject to corporate and income taxes. However, U.S. citizens and others residing in countries who tax worldwide income are required to declare all income to their tax authorities.
Privacy
Panama does not list the names of shareholders or owners in its public records.
Bearer Shares
For additional privacy, Panama corporations can issue bearer shares to further protect the identity of their shareholders. Bearer shares only have the name “Bearer” on the stock certificates which makes the real owner anonymous. However, in 2013, Panama enacted a law requiring all bearer shares to be held by an authorized custodian which could be a bank, an attorney, a brokerage firm, or a fiduciary on behalf of the actual owner.
World’s Second Most Popular Offshore Corporation Location
Panama has more than 500,000 corporations, making it the second most popular location to incorporate in the world after Hong Kong.
One Shareholder
Only one shareholder is required to incorporate in Panama.
No Annual Meetings
No annual general meeting is required for corporations formed in Panama.
No Minimum Authorized Share Capital
Panama corporations are not required to have a minimum authorized share capital.
No Reporting
Offshore corporations are not required to submit corporate reports to the Panamanian Government. Furthermore, the records the corporation maintains can be kept anywhere in the world. There is also no formal record keeping requirement.
U.S. Dollar
Ever since Panama’s independence in 1903, the U.S. Dollar has been its official currency.
Low Renewal Fees
The $300 USD annual renewal fee for Panamanian corporations is one of the most affordable in the world. In addition there will be a registered agent fee.
Banking Secrecy
It is a criminal offence (a felony) for any bank employee to disclose any type of information of bank account holders including verifying someone has an account.
Fast Incorporation
When all required documents are filed, it typically takes five business days to be registered as a corporation. However, for an extra $250 USD, this process can take one day.
Easy Permanent Residency
Citizens of 50 countries considered “friendly” can obtain fast track permanent residency leading to citizenship for the immediate family.
Panamanian Law
Panama corporations must select a unique name, in any language, that does not match the names of any already existing corporations. This name needs to also end with Corporation, Incorporated, Sociedad Anonima, Corp., Inc., or S.A.
Office Address and Local Agent
A Panama corporation can have a corporate address anywhere in the world. However, the corporation must have both a registered office address located in Panama, as well as an approved agent residing in Panama for process service and official notices.
Shareholders
Panama corporations are required to have at least one shareholder. Nominee shareholders are allowed for privacy, and shares can be held by either private individuals or legal entities. There are no residency requirements.
Directors and Officers
Panama corporations are required to have three directors/officers (President, Secretary and Treasurer). The directors/officers can be either persons or legal entities. The directors and officers can be the same three persons or legal entities. Panama corporations’ directors, officers and shareholders may be residents of any country. The directors’ names must be filed in the public registry when the corporation is formed. However, nominee directors are permitted for privacy.
Authorized Capital
Panama corporations are not required to have a minimum authorized share capital.
Panama Tax Haven Benefits
One of the reasons corporations in Panama are so popular for both offshore business operations and global asset protection is because Panama does not require them to pay income, dividend, or capital gains tax on money earned outside of Panama. However, U.S. citizens and others residing in countries taxing worldwide income are required to declare all income to their tax authorities. One of the important tips to note is that U.S. people are taxed on worldwide income. So, even if there are no taxes in Panama, a U.S. person is expected to report the income.
Renewal Fees
Corporations in Panama are required to pay annual renewal fees which cost $300 USD plus the company service and registered agent fees.
Public Records
The Public Registry Office does not require corporations to file the names of shareholders and owners, so this information never becomes available to the public. However, the Articles of Incorporation do require names and addresses of the directors to be listed, so this information is open to public record. However, nominee directors are permitted in Panama for privacy.
Accounting and Auditing Requirements
There are no statutory requirements of accounting and audits for Panama corporations. It’s totally up to the corporate directors, what kind of records they would like to keep.
Annual General Meeting
No annual general meeting is required for corporations formed in Panama.
Time Required for Incorporation
When all required documents are filed, it typically takes five business days to be registered as a corporation. However, for an extra $250 USD, this process can take one day.
Shelf Corporations
Purchasing a shelf company for faster incorporation is allowed in Panama.
About Panama Banks
Panamanian Banks are among the most stable banks in the world, being home to the second largest international banking centre in the world, next to Switzerland. Panama also has the best bank secrecy laws available in the world today.
There are approximately 100 international banks in Panama. We have relationships with a variety of local and international banks in Panama through which our clients may open offshore bank accounts at. However, we mainly assist our clients to open corporate Panama offshore bank accounts through various Panama banks, with which we have excellent working relationships.
Most of our clients are handled by the Private Banking Departments of the offshore banks that we maintain relationships with. A bilingual, English and Spanish speaking Private Banking Official is assigned to each of our clients offshore bank accounts, and our client is provided with that persons contact information for direct communication for executing Panama banking transactions.
More Info About Panama Offshore Bank Accounts
Interest Rates
The banks in Panama offer very attractive interest rates*.
*Quoted rates on checking and offshore savings accounts may; change without notice, vary depending on the LIBOR (London Inter Bank Offering Rate), be subject to minimum deposits and/or minimum balance requirements and/or certain terms
Offshore Online Banking
Internet access to your corporate Panama offshore bank account is offered through most Panama banks. Panamanian banks use the most up to date online security technology so your offshore banking information is 100% secure and confidential. Our recommended Panama banks offer offshore online banking for account viewing / downloading statements, transfers between accounts, international wire transfers, payment of credit card balances, as well as payment of local utility bills (if applicable). Please note that some Panama banks require a signed letter either faxed, emailed or delivered to the Panama bank to execute wire transfers.
Offshore Credit Cards
Most Panama banks offer secured offshore credit cards (Visa or MasterCard). Our firm charges a processing fee of US$100 for assisting in setting up of secured offshore credit cards.
Secured offshore credit cards require that the client place a security deposit as collateral for the credit line in an amount equal to 125% of the credit limit chosen for their offshore credit card. The security deposit is frozen in the corporate Panama offshore bank account (offshore savings account or offshore CD / offshore time deposit) until the offshore credit card is closed, although the funds held as collateral will still earn interest while in the security deposit. As the offshore credit card is used, the Panama bank will automatically debit the entire monthly balance of the offshore credit card charges from the remaining balance in the corporate Panama offshore bank account at the end of the monthly credit card billing cycle. Therefore, the Client must maintain enough funds in the offshore bank account to pay for the monthly credit card charges.
Annual fees for offshore credit cards start at US$50 or more according to the type of credit card chosen. Silver, Gold, Platinum, and Airline miles credit cards are available for earning airline flight miles for offshore credit card usage. American Express is also available through certain Panama banks.
Offshore Debit Cards
Offshore debit cards are offered for corporate Panama offshore bank accounts through some of our recommended offshore banks in Panama. Offshore debit cards have the “Clave” symbol on them, and can be used at any point of sale or ATM that accepts “Plus” or “Interlink” cards (accepted world-wide). The Panama banks annual fees for debit cards are from US$20. There are transaction fees of 40 cents for local ATM cash withdrawals, and there may be slightly higher fees associated with point of sale transactions, or ATM cash withdrawals at ATMs outside of Panama, depending on the merchant you purchase from, what country you are in, or what bank or ATM you withdraw cash from.
Offshore Time Deposits (Offshore CD)
Most banks in Panama offer offshore time deposits (offshore certificates of deposits, or “Offshore CD’s”), which are referred to as “Plazo Fijo”, in Spanish. Each Panama banks rates vary according to their banking regulations, business practices, etc. Under Panamanian law, the minimum amount for an offshore time deposit at a Panamanian bank is US$10,000. Some of our recommended Panama banks currently offer up to 8% annual interest** on USD time deposits (Offshore Certificates of Deposit).*
*Please note that for deposit amounts over US$100,000, the bank officer is able to negotiate special deposit rates with the Panamanian bank, depending on the amount and term.
**Quoted rates on checking and offshore savings accounts may; change without notice, vary depending on the LIBOR (London Inter Bank Offering Rate), be subject to minimum deposits and/or minimum balance requirements and/or certain terms for offshore CD’s.
Corporate Panama Offshore Savings Accounts
Through most Panamanian banks, Corporate Panama Offshore Savings Accounts are available. Interest rates vary depending on the deposited amount, however, one of the Panamanian banks we maintain relationships with is currently offering up to 4% annual interest* on corporate Panama offshore savings accounts with balances above $5,000.
*Quoted rates on checking and offshore savings accounts may; change without notice, vary depending on the LIBOR (London InterBank Offering Rate), be subject to minimum deposits and/or minimum balance requirements and/or certain terms for offshore CD’s.
Corporate Panama Offshore Checking Accounts:
Through most Panamanian banks, there are two types of Corporate Panama Offshore Checking Accounts available:
A. International Checking:
This account is useful for those who need an offshore bank account with internationally accepted USD checking facilities. The checks from this account are accepted around the globe.
- Minimum Initial Deposit: US$5,000.
- Interest Rate: no interest is paid on checking
- Minimum Balance Requirement: US$5,000.
B. Local Checking:
This account is useful for those who wish to operate an actual business within Panama, and need an account for making USD payments to any local person or business in Panama. However, the checks from this account are only valid for deposit or compensation locally within the Republic of Panama. One of the Panama banks we maintain a relationship with has the following terms:
- Minimum Initial Deposit: US$1,000.
- Interest Rate: No interest is paid on this account.
- Minimum Balance Requirement: US$500.
- Monthly fee if balance falls below US$500: US$10.
- Account statements may be sent by email or post mail.
- Certified Local Check Fee: US$5.
- Certified International Check: US$10.
Miscellaneous Fees (In US$)
- Certified Local Check Fee: $5.00
- Certified International Check Fee: $10.00 – $25 (depends on amount)
- Wire Transfer In Fee: From $20 (depends on amount)
- Wire Transfer Out Fees: $50 – $100 (depends on amount)
*Fees are subject to change without prior notice. We do not guarantee the accuracy of the above published banking fees as the bank may change the fees at any
time without notice.
** Acceptable deposits are USD cash, USD Checks (personal or bank certified checks), or wire transfers. Unacceptable deposits are money orders, travellers checks, double endorsed checks, foreign items/thrift withdrawal orders, returned checks, and checks referring to more than one account number.
Documentation Requirements: (Banker-Documents)
For set up of Corporate Panama Offshore Bank Accounts, the following documentation is required by the Panama bank:
A. Photocopy of passport for each signatory.
The photocopy of passport must include the photo of the person, the personal details (passport number, etc.), the signature, and photocopies of ALL pages including entry/exit stamped pages. The photocopy should be clear and legible and it should be NOTARIZED.
B. Two Financial Reference Letters.
The financial reference letter can be from any bank, brokerage firm, or credit union. The letter should be an original on the financial institutions letterhead, it should be addressed to the bank you are planning to process the bank account at, and should include the signature of an official, and the contact information (address, telephone, fax, email, etc.). There is no specific format that the reference letter must be written in.
C. One Commercial or Professional Reference Letter.
The commercial or professional reference letter can be from any company or professional that you have a commercial business, or professional relationship with. The letter should be an original on the company or professionals letterhead, and should include the signature of the representative of the company or the professional, and the contact information (address, telephone, fax, email, etc.). There is no specific format that the reference letter must be written in.
D. Company Profile Letter.
The company profile letter should be on your company letterhead, signed by the signatory(s) on the account, with complete contact information. The letter should explain in detail the nature of the business activities, an explanation of what products or services the company is selling, the regions where the company is conducting business, the purpose of the account, and a brief description of the estimated monthly banking activity anticipated for the account.
E. Proof of Address.
The Panama bank requires that you provide a photocopy of a recent utility bill (such as an electric power bill, water bill, cable tv bill, internet service bill, phone bill, etc.) showing your personal name and physical address (P.O. Box is not accepted).
F. Signed Account Applications.
If you wish to be the signatory on the account, then each signatory must sign the original bank account applications. As account signatory, you will have the power to execute all types of banking functions with your corporate Panama offshore bank account. Most Panamanian banks’ policies require an interview face to face with the client. In other words, the signatory must come to Panama for a personal interview with the bankers, and sign all the required account applications. However, if opening a bank account in a foreign (non-Panamanian) bank, then once the offshore bank account introduction service is paid, we will courier or e-mail you the bank account applications indicating where you must sign and no personal interview is required.
* Documentation requirements are subject to change without notice.
** Offshore banks other than our recommended offshore banks may require other
Set Up Procedures
Below we have included the Panama bank account set up procedures for the Panama banks that we maintain relationships with (Please note that set up procedures may be different if dealing with other banks):
A. Submit an Online Application
Click on “Order Now”, and complete an online application, then hit “submit”.
B. Submit Payment
Payment can be made by Bank Wire Transfer, Western Union Money Transfer, USD Check, or USD International Money Order.
C. Interview at the bank
Once we receive the payment, we will contact you to coordinate and schedule the interview at the requested Panama bank during the days you will be in Panama. The applications will be completed and signed at the bank.
D. Account is Set Up
The offshore bank account number will generally be provided within 10 to 20 business days from the date the final due diligence documents are submitted to the Panama bank. Please note that new offshore account processing times may vary depending on the volume of offshore bank accounts that the particular bank is processing at that time.
E. Begin Using Account
Once the offshore bank account is approved by the Panama banks compliance department, the banker will email you the complete offshore bank account protocol for making deposits, executing wire transfers, contact information of the Panama bank, etc. At that point, you deal directly with the Panama bank for all account transactions.
Documents required from customers for the procedures align with the incorporation of the Offshore company and Bank Account opening in the selected jurisdiction
- Certified Passport of each shareholder/beneficial owner and director
- Certified Proof of residential address of each director and shareholder (Must be in English or certified translation version)
- Bank References letter for bankers for each shareholder/beneficial owner and director
- Three proposed company names
- The issued share capital and par value of shares
- A brief Business plan about your proposed line of business
- Together with Guidance Notes for applicant fully completed by the client
Complete Package fees including Government Fees : $9075.00 USD
Conclusion
Panama offers many benefits to its corporations including: tax free income for doing business outside its borders, privacy for owners and shareholders from public records, bearer shares for additional privacy to shareholders, only one shareholder required to incorporate, no annual meetings, no authorized share capital, no reporting or submitting records to the government, U.S. Dollar economy, low annual renewal fees, banking secrecy, fast incorporation, easy permanent residency for citizens of 50 nations, the world’s 2nd most popular offshore corporation jurisdiction.