HOW TO INVEST IN PANAMA
By: Miriam Amores Correa
1. Corporations as instruments to develop mercantile activities:
Panamanian corporations are suitable instruments to realize any type of commercial activities, including exports of all class of goods.
Additional information related to the organization of a Panamanian corporation, can be found in the following link: http://www.limayasociados.com/services.htm
2. Mercantile, civil, labor and fiscal Panamanian legal regime:
2.1. Mercantile regime: the Panamanian corporation has mercantile nature and it is allowed to develop any activity of legal commerce in any part of the world.
The administration of corporations corresponds to its Board of Directors (minimum three), which can be of any nationality and residence. The Board of directors can grant Powers of Attorney so that the corporation is represented and exerted anywhere of the world.
The property of a corporation falls to its shareholders, who credit their condition with the respective stock certificates, which can be issued to the bearer or in nominative form, to election of their proprietor. Names of the shareholders are never published.
As far as the responsibility of the shareholders, Panamanian law indicates that the shareholder is only responsible for debts and obligations until the unpaid amount of their shares; however, bearer shares can be issued even though it has only received partial payment.
2.2. Civil regime: the corporation is a juridical person able to acquire rights and contract obligations. The legal representation of the corporation usually corresponds to the President.
2.3. Labor regime: the corporation can contract employees for defined or undefined time, being permissible to include in work contracts a clause that establishes a trial (test) period of 3 months where the employer as well as the worker can finalize the labor relation without responsibility, except for the payment of the labor benefits to the date of completion (wage, premium of antiquity, thirteenth month and proportional vacations). The worker acquires stability after working two continuous service years to the employer, after that term is fulfilled, the worker can only be dismissed on the basis of a cause contemplated on the Panamanian Labor Code.
If a justified cause of dismissal is not accredited, the jurisdictional Authority of Labor will order the employer to restore the worker to the company or to pay an indemnity for an unjustified dismissal. It is up to the employee to decide which one of theses options will she/he take.
The employer will be able to hire foreign employees, as long as he/she obtains the previous authorization of the Ministry of Work and Labor Development.
2.4. Fiscal regime: In Panama we have a territorial regime for taxes. A juridical person pays 30% on the income tax. Earnings obtained in the bonds, shares, quotas of participation and other values or movable property established in the Fiscal Code, are taxable.
3. Migratory status in Panama:
Our migratory law contemplates, two types of Residence Permits: Temporal Visitors and Immigrants. One of the modalities of the Immigrant Residence Permit is the one of Investor, which supposes investment not smaller than USS40, 000.00.
Additional information related to migratory status in Panama, can be found in the following link: www.limayasociados.com/services3.htm
4. Labor status in Panama:
Panamanian labor law allows the work of foreigners in Panama, with a prior authorization of the Ministry of Work and Labor Development.
Additional information on different classes of work permits, can be found in the following link: www.limayasociados.com/services4.htm
5. Panamanian attractive zones for foreign investors, from the commercial and financial perspective:
5.1. Colon’s Free Zone: Established in the Province of Colon. It’s has a system of duty free taxation in imports, re-exports, manufactures and other activities; some of the advantages in investing here are the following:
· US Dollar is the currency of legal course;
· Low costs of rent in the premises and lands;
· System of Lease Back or recognition of investment;
· Protection and trusteeship of the rights of intellectual property;
· Future automated commercial operations.
The Free Zone of Colon is considered a State independent organization and it is located less than two hours of the capital city in the Atlantic part of the country. The executives of the Free Zone of Colon can acquire special migratory status. The entrance to this zone of commerce must be approved by its governing organ.
5.2. The Airport of Tocumen Free Zone. It’s located at the international airport in the capital city. The entrance to this zone of commerce is made through public bidding with the State.
5.3. Panama-Pacific Special Economic Area: Created by law on the 20 of July 2004, creating incentives for macro companies that settles down in the area. Their executives have a migratory special regime.
There are many different ways to come to Panama and invest; these are only a few examples. If you are interested in coming to Panama and you would like to know the proper way to do it, please do not hesitate to contact us.
LIMA Y ASOCIADOS
Phones +507 269.3552 / +507 264.3312
Mailing Address: P.O. Box 6-3508 El Dorado, Panama, Rep. of Panama
limaco@limayasociados.com
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