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:
