FAQ

This document has the sole intention of clarifying doubts and / or frequent terms related to our industry and under no circumstances should they be taken as any kind of advice. It is essential that whoever wishes to use the services of our firm in matters of implementation and management of entities domiciled in jurisdictions that may be classified as "Offshore" obtain the necessary local legal advice before making any decision or action.

Let start by clarifying that according to Panamanian law, companies incorporated in Panama receive certain tax benefits that make the country a strategic and legal option for a variety of cases. These benefits include no income tax or capital gains tax on investments or transactions in other jurisdictions. However, Panama’s financial services sector is tightly regulated and must comply with strict global protocols to prevent abuse of the financial system. This includes preventing money laundering, combating terrorist financing and preventing tax evasion.

Offshore or non-resident companies are described as companies that conduct an insubstantial or zero volume of business within their jurisdiction of incorporation. More specifically, offshore companies have three characteristics: Firstly, they should be registered as an entity within the jurisdiction of incorporation. Secondly, the ‘ultimate owners/investors’ should be domiciled outside of the jurisdiction of incorporation. Finally, the company should transact the majority of its business outside of the jurisdiction of incorporation. However, most associate the term ‘offshore company’ as a means of increasing tax efficiency.

A holding company is a corporation or limited liability company that holds a controlling ownership interest in other companies or the assets that those companies use. Typically, a holding company simply holds equity interests or assets, rather than actively engaging in business, such as selling goods or services. Strictly speaking, the term “holding company” might be used to describe any company that owns a majority of shares in another company however this may only apply if that corporation’s only reason for existence is to hold participations in other companies. Small shareholdings may be held by banks or Unit or Investment Trust companies as ingredients in their portfolio of ownership strategy.

The most important factor in choosing a jurisdiction is to be sure that your company will be incorporated in a country that has : Reliable means of communication Political and economical stability Good reputation Sophisticated corporate laws In any case, the right choice of jurisdiction also depends on where you live and on the business you conduct and should be subject of evaluation by a tax advisor of the person(s) setting up the structure.

It will be subject to the laws and regulations of the jurisdiction where the company is domiciled. Some jurisdictions require for filing of the accounts; some others only require for the company to maintain accurate records that could demonstrate the financial situation of the company at any given time or available at request but without the need to have them filed.

Yes. It is even recommended that you do so. On the application form you are asked to input two company names, in order of your preference. We will then check with the Company Registry if those names are available for incorporation. If not, we shall send you some alternative names. We also have a list of pre-approved names that we can send to you upon request.

The shareholder is the person who owns the company through a share/stock certificate. A company can be owned by one or several shareholders. The shareholder can be an individual or a company. The director instead, is the person responsible for the management of the company. He will sign any business contracts, account opening forms etc. Directors are usually elected by the shareholders, but sometimes are appointed by resolution. A company can have one or several directors. The director can be an individual or a company.

An offshore company may be of interest to a great number of people and it may be used for various activities: Businessmen: Creating an offshore company allows you to begin an activity without having to deal with the set-up of a complicated infrastructure. An offshore company may allow you to benefit from fiscal advantages and ease of administration. Commerce over the Internet (E-Commerce): Internet traders can use an offshore company to maintain a domain name and to manage internet sites. An offshore company might be ideal for people whose business is on the internet. You might choose to incorporate the registered office of your company in an offshore jurisdiction to take advantage of the various benefits offered by these jurisdictions. Consultants / Counselors: You can also carry on your consultancy or counseling business through an offshore company. You will find it easier to manage your company and will have reduced or even zero taxation depending on the jurisdiction in question. International business: International business can be carried out through an offshore company. It will handle purchases and sales operations, taking advantage of the fact that its profit will not be taxed, or only at a low level, depending on the jurisdiction. This type of use is particularly interesting where goods from one country are sold in another country while you are based in a country different from where the goods are being sold and bought. Holding intellectual property rights: Any kind of intellectual property right (a patent or trademark) may be registered in the name of an offshore company. The company may also buy or sell this type of rights. It may also grant rights of use to third parties against payments which will be considered as revenues and will thus benefit from the low level or zero taxation of the jurisdiction in which it is registered. For the custody of movable and immovable property: Offshore companies are used to hold both movable property (such as yachts) and immovable property (e.g. houses and buildings). It should be noted, however, that some countries do not allow the acquisition of movable/immovable property through offshore structures and therefore those wishing to form an offshore structure are advised to seek for local legal advice or check with a competent authority before proceeding.

The nominee director service is a service that may need to be considered to fulfill substance requirements as you have to make sure that the place of “management and control” issue firmly outside a high tax jurisdiction.

The Registered Office is the legal address (which may not be the office address) of a firm that is entered in the official register of the registrar of companies, and to which all government and court communication is addressed. The location of this office must be in the jurisdiction in which the firm is registered, and any change in its address must be notified to the registrar within a specified period.

A notarization means that a notary will check a document or documents with the sole purpose of confirming their authenticity. An apostille is an internationally recognized certification and legalization of the corporate documents by the Government of the jurisdiction where the document has been issued.