PANAMANIAN COMPANIES AND PRIVATE INTEREST FOUNDATIONS -MODIFICATIONS TO THE ANNUAL TAX-

We would like to inform you that from January 1, 2006 , the following changes in the annual tax for corporations and private interest foundations, organized according to the Panamanian law.

These reforms are:

1. Increment of the annual tax: from January 1, 2006 , the annual tax for corporations and private interest foundations will be of US$300.00.

2. Payment of the first annual tax: the first annual tax for corporations and private interest foundations should be paid prior to the registration of the Public Deed of Constitution in the Public Registry along with its corresponding registration fee. For this year 2005, the annual tax will stay at US$250.00; nevertheless, from 2006 it will be of US$300.00.

3. Periods for payment of the annual tax: from 2006, the system will be in function of the date of registration of the corporation or private interest foundation as follows:

3.1. Corporations or private interest foundations organized from 1 January to 30 June: Payments of these corporations and foundations should be made before 15 July, each year, to avoid any penalty. We remind you that surcharge for late payment of the annual tax remains at US$50.00.

3.2. Corporations or private interest foundations organized from July 1 to 31 December: Payment of the annual tax of these corporations and foundations should be made by January 15 of the immediately subsequent year, to avoid the penalty.

4. Penalties for late payment of the annual tax: companies and private interest foundations with more than two years of non payment should cause a penalty of US$300.00, plus the normal surcharges.

5. Dissolution of a corporation or a private interest foundation due to the non payment of the annual tax: Failure to pay the annual tax for ten (10) consecutive periods will cause deletion of the company from the Public Registry. Corporations and private interest foundations in this situation will be considered dissolved.

6. Advanced payments: It is permitted by means of this Law to pay the annual tax in advance. Said payment will be considered final by the periods covered. If this payment is made in 2005, they annual tax will be of USD250.00.

7. Registration and Certifications: The Public Registry will not issue certifications neither will record documents of any company or private interest foundation that has pending payments of its annual tax.

If you require additional information on the subjects included in this circular, do not hesitate to contact us, through the following

ways:

P.O. Box 6-3508 El Dorado

Panama, Rep. of Panama

Fax: (507) 269-4663 Tel: (507) 269-3552

Email: limaco@limayasociados.com

 

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