FAQ

A: Yes you can, most banks require:
– Passport and a second ID
– Two (2) bank reference letters
– Last three (3) months bank statements
– Proof of income (employment letter, income tax returns or financial statements)

A: Most banks require the two reference letters from different bank institutions, but in that scenario, one bank reference letter and one reference letter from your accountant or attorney, with the contact information shall do it.

A: Yes there are. If you are interested in opening a brokerage account in Panama, the paperwork requirements are similar to those for opening a bank account.

A: That depends on the bank you choose and on the board members’ residence status, but I have seen anywhere from 3 business days to 3 months, although standard it’s 2 to 3 weeks.

A: Not in Panama, as our banking regulations and “know your client” policy requires the person to personally visit the bank branch. There are seldom exceptions, but only with international banks with presence in Panama, if you are within their private clients structure.

A: Given new regulations, and although it is possible under certain circumstances, we cannot assist you. The recommendation is to open an account in other jurisdictions, and we might be able to assist you in this case.

A: Each bank has its own requirements. But in general, you must present extensive documentation to validate the personal, corporate, and financial reputation of the signing authorities and the beneficiaries. Besides, all members of the board must sign the documents required to open the bank account.

A: There are options that we can recommend. Please note that, in general, agencies that provide such service may have reservations on the type of business, product, or service you provide. For that reason, they may impose restrictions.

A: Well, you can invest and open a business, but to work on it, you are supposed to have a working permit, even if it is your own business.

A: Corporations are conformed by the Dignataries (President, Secretary and Treasurer); Board of Directors (at least three) and the Shareholders. The Shareholders are the ones that have the control of the Corporation, and can name and assign the Board Members, who then assign the CEO or President, and other officers, which are responsable for the administrative management of the company’s functions.

A: Panamanian Law requires the corporations to necessarily have a resident agent, who must be an authorized attorney or law firm.

A: Corporations pays US$300.00 of annual tax, as a government fee for its right of existance. Additionally the resident agent might charge his own fee to represent the corporation.

A: Private Interest Foundations (PIF) pays US$400.00 of annual tax, as a government fee for its right of existance. Additionally the resident agent might charge his own fee to represent the corporation.

A: A Corporation is advised if you were going into business, either in Panama or even in any other country in the world, so that you can separate the possible business liability, if any, from your personal assets. Some people also use Corporations as a Holding of Real Estate or Bank Accounts.

A: Private Interest Foundations (PIF) are the best choice for Estate Planning, so that, in case that you have different assets, such as real estate and bank accounts, they can be hold by your PIF, so that your declared heirs can inherit them automatically, without going through an expensive and long Probate Process.

A: IBCs and LLCs share some similarities. Both are legal entities and they limit a member’s responsibility to his participation as a shareholder or partner. However, the IBC requires at least 3 Directors and 1 or more shareholders who can enjoy participation privacy – for this reason, IBCs are also known as Anonymous Corporations. On the other hand, the LLC requires a minimum of 2 Managers and 2 or more Partners. Their names must be publicly disclosed in all registration documents, providing more transparency, usually a requirement in a partner’s country of origin.

A:Yes. You can accomplish this with a minute entry in the company’s minute book or with an entry in the articles of incorporation. You can delegate general power to any person, whether they are partners, shareholders, dignitaries, directors, or managers.

A:The process to close a corporation requires a minute entry in the company’s minute book, approving its closure. This minute must be notarized, registered in Panama’s public registry, and published in a local newspaper at least once.

A:Yes. It requires a letter of consent from the existing Agent, certifying there are no outstanding accounts payable for his services. This letter will be used in the notarized document where the new Agent accepts the role.

A: Residence only grants you with the right to reside (live) in the country legally; in other words, you can stay legally in the country for as long as your residence status allows it. Working is another right yet to be granted, by applying for a work permit. There are specific residences that will make you elegible to apply for a work permit, and if so you are intending, then it is important to consider those types of residence options in the first place.

A: Multiple Entry Visa is required by any foreigner that has a residence application pending of approval, and intends to travel abroad during that timeframe. A temporary resident that leaves the country without having that visa, will be fined for USD $2,000.00. We usually include the Multiple Entry Visa in our clients application, by default.

A: Upon approval, you can stay in the country for as long as you decide. If you leave, it is important to visit back the country at least once every two years, so tha your residence might not be subject of revocation.

A: That is a temporary and special residence program handled by Immigration, whereas an attorney is not required, therefore I do not handle it, and would advise you to contact the Immigration Office at their website, where the requirements for it are detailed.

A: Criminal Record is good up to six months, unless the document itself specifically states differently – the catch though is that once issued, if you visit the country and leave without applying, it also gets voided. Health Certificate issued in Panama is good for ninety days. Bank reference letter is good for thirty days. Other documents, such as marriage certificate and retirement letters are good for one year.

A: usually at least five (5) business days are required, but eight (8) to ten (10) days are recommended:

• one day to get the current passport notarized;
• one day to do the registration at Immigration;
• one day to apply for the residence, and for the multiple entry visa;
• two more days to be granted the multiple entry visa;

A: Currently, the only countries that Immigration accepts criminal records issued at the local consulate are: UK, Chile, Argentina and South Korea.

A: Nationals of restricted countries, require to apply for a special Visa in order to visit the country, called VTR. Nonetheless, if the applicant has a Visa to the USA or England, and has used it before, he can visit the country for up to 30 days, without a VTR. Some of the countries considered restricted are: India, China, Pakistan, Irak and Bangladesh.

A: Residence is required in order to apply for a local driver’s license. That is a simple process, for which I can give instructions on the process, but I choose not to personally assist on it, as it is NOT a procedure whereas an attorney is required.

A: Foreigners are allowed to drive with their foreign license, up to 90 days only, nonetheless, once they apply for residence, they are not longer allowed to drive with it, as they will be requested to obtain a driver’s license from Panama.

A: According to Resolution 15703 from August 24, 2012, you have 6 months.

A: Please review Law 14 from October 15, 2013.

A: Yes. Following Executive Order 229 from March 22, 2013, foreigners with this work permit, with a minimum salary of B/. 850, and with at least 2 previous extensions, can request permanent residence.

A: Resolution 4803 from March 30, 2012; Law 15 from February 1, 1966; Law 3 from February 22, 2008; and Executive Order 320 from August 8, 2008.

A: Any former foreign worker, with more than 5 years in a Multinational Company, can apply for permanent residence, following the requirements from Executive Order 822 from August 2, 2013.

A: Following Executive Order 863 from June 21, 2011, you must request the VTR 60 days before your trip.

A: Any foreigner with a recommendation letter from the President may obtain permanent residence, following Executive Order 2 from January 17, 2013.

A: No. Certificates (e.g. shares) must be registered under the applicant’s name according to Executive Order 147 from March 17, 2017.

A: Any national or foreign person or entity can purchase and own property in the country.

A: It depends on how you want to hold the property. If you opt to hold it in your name, then you need to sign a Power of Attorney and authenticate it in the nearest Panamanian Consulate. Although, if you would like to own it in a Holding Corporation or Foundation, then I can prepare and sign the papers on behalf of your new entity, for which we would just need to coordinate it all.

A: Not as you know it. In Panama there is Title Search or due diligence, which is advised to be done by an experienced attorney. Title insurance is not generally offered by Insurance Companies in Panama.

A: Depending on the type of land you are buying, we would recommend you to survey it to make sure the measures and boundaries are as offered.

A: Option of purchases of real estate are valid in Panama, and can be done through a contract, which is better enforced if registered at the Public Registry, for which an attorney is required.

A: Of course, as long as the buyer is agreeable with it. In that case, a shares sale contract is drafted, and the Corporation’s Dignataries and Board of Directors shall be replaced.

A: According to the Law, if the shares have been duly issued and fully paid for by its owner, at the time of transferring them, a 5% capital gain tax withhold must be done, and paid to the government.

A: Real Estate Sale taxes are two: Sale Transfer Tax, which is 2%; and Sale Capital Gain Tax, which is a 3%. Both taxes are paid by the seller, prior to the conclusion of the sale, and are paid based on the highest value between the Selling Price or the Property Registered Value.

A: You can request a tax statement for either your property or corporation, at the Tax Office, by going in person, or by applying online for a NIT access.

A: The RUC is the “tax id” for persons, entities or properties, and is used as the “username” for online acces to the related account with the Tax Office; and the NIT is the quivalent to the “password”.

A: Goods and Services in Panama are taxed at a 7% rate, called ITBMS, and it is applicable by all companies that have gross sales over US$3,000.00 per month or US$36,000.00 a year.

A: Hotels and Hostals pay ITBMS at a 10% rate by default, regardless of its income amount.

A: According to Tax Authority’s Resolution 201-831 of March 23rd, 2007, all improvements must be declared within six months from the date of the Occupation Permit, otherwise some penalties will be applied.

A: Yes. According to Tax Authority’s Resolution 201-4603 of Dec.28th, 2001, all corporations are obligated to have its RUC registered.

A: Property taxes’ statues limitations are 10 years.

A: Income taxes’ statues limitations are 7 years, starting the last day of the year when they were due.

A: We are allowed up to 36 months after the due date for filing income tax, in order to file for its rectification, as long as the tax payer is not being subject of an auditing.