The Republic of
Population: 2,961,000 (est.
Languages: Spanish (official),
Area: 75,990 sq. km (land area)
Currency: Balboa (PAB); US dollar
Fiscal year: Calender year
Independence status: 03/11/1903
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.
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.
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
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.
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.
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:
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