Panama Today

Explanation of the current situation in Panama as of 2020.

 

The capital is Panama City with a population of 4.17 million.

 

The average temperatures are very comfortable, with 32 degrees Celsius along the coast and 17 degrees Celsius inland. Particularly, the coastline and islands on the Caribbean side are extremely beautiful.

 

The official language is Spanish, but English is also used in business and daily situations.

 

Economically, Panama is small but open, with the U.S. dollar as its primary currency. Supported by a strong financial sector, infrastructure spending, and revenues from the Panama Canal, Panama showed a GDP growth of 3% in 2019. According to the IMF on April 14, 2020, due to the impact of the coronavirus, GDP is expected to decrease by -2.1% in 2020 but is forecasted to grow by 4% in 2021.

 

Panama's economy is substantial, ranking fourth in GDP size in Latin America.

 

Regarding employment, the unemployment rate was 7.1% in 2019 and is expected to be 8.8% in 2020, showing an upward trend since 2012. Economic disparities are severe, with 23% of the population still living in poverty. Youth poverty is particularly notable, with one in five individuals suffering from malnutrition.

 

By the way, the famous song "Panama" by Van Halen refers to the one in the United States, not the country, Panama.

 

Panama Flag Ship Registration Services

<Due to the current situation, the fees and procedures below may be subject to the changes>

 

Introduction to ship registration services provided by our affiliated Panama law firm.

 

Through our partners, we primarily offer services for acquiring Panama ship registration and registering Panama corporations. The advantages of Panama ship registration include ease of registration and low registration fees.

 

As of 2014, approximately 8,600 vessels are sailing under Panama flag. This is significantly higher compared to around 3,400 vessels from the United States and 3,700 vessels from China, demonstrating the convenience of Panama ship registration.

 

Why Panama Ship Registration?

 

- Ownership Restrictions: Any individual or corporation, regardless of nationality or registered address, can obtain Panama ship registration. Panama-registered ships conducting business outside Panama are exempt from Panama income tax.

 

- Size Limitations: There are no size restrictions for registration, although vessels over 20 years old require evaluation by Panamanian authorities for permanent registration.

 

- Technical Proof: When transferring registration to Panama, no re-inspection is required if the vessel has valid safety and weight certificates. This provision eliminates the need for dry dock inspections, resulting in significant cost savings.

 

- Cost: Registration fees for Panama ship registration are lower than those of many other countries and cover one-time registration and government fees. Additional discounts may be available for registering through Panama corporations, with initial costs starting from $5,000 USD depending on the complexity of the case and whether a Panama corporation is established.

 

- Registration of Sale Certificates: Registration of bill of sale incurs a 20% tax plus approximately $0.20 USD per registered tonnage.

 

- Fleet Discounts: Fleet registrations receive discounts, such as 20% off for fleets of 15 or more vessels, 35% off for fleets of 50 or more vessels, and 60% off for fleets of 100 or more vessels.

 

- Multiple Registrations: Under the Dual Registry System established by Panama Law No. 1 of 1973 and Amendment No. 3 of 1973, it is possible to temporarily register vessels under Panama flag under certain conditions, and vice versa.

 

Additional Notes

 

If considering Panama ship registration, please confirm the following in advance:

 

1. Purpose after Panama Ship Registration: Panama ship registration has two types:

   - International Type: Requires leaving for the high seas every 90 to 120 days and obtaining proof of departure.

   - Domestic Type: Considered for recreational use and subject to taxes.

 

2. Type of Vessel (Length, Tonnage), Year of Manufacture: Vessels over 20 years old require evaluation by authorities.

 

3. Commercial or Private Use of Vessel: Procedures and costs differ.

 

4. Ownership of Vessel: Identification of individual or corporate ownership.

 

Required Documents

 

Main required documents include:

1. Power of Attorney (POA) to a Panama lawyer.

2. Bill of Sale for the vessel.

3. Proof that the previous registration of the vessel has been canceled (if transferring registration).

 

Additionally, first-time clients may be required to provide documents such as bank reference letters and commercial inquiry letters regarding individuals or corporations.

 

Panama entity incorporation support

 

 

The Advantages of Establishing a Panama Entity

 

Panama, known for its strategic location, robust economy, and favorable business environment, offers numerous benefits for those considering establishing a corporate entity within its jurisdiction. From tax advantages to streamlined registration processes, here are some compelling reasons why Panama is an attractive destination for setting up a business entity.

 

1. Tax Benefits

 

One of the primary reasons businesses choose Panama for entity formation is its favorable tax regime. Panama operates on a territorial tax system, meaning that only income generated within the country is subject to taxation. This framework exempts Panama-registered entities from local taxes on foreign-sourced income, making it an ideal jurisdiction for international businesses looking to optimize their tax exposure.

 

2. Asset Protection and Privacy

 

Panama offers stringent laws protecting the confidentiality and privacy of business owners. Corporate structures such as Private Interest Foundations and Limited Liability Companies (LLCs) allow for anonymous ownership, enhancing asset protection and safeguarding the privacy of shareholders and directors.

 

3. Political and Economic Stability

 

With a stable political climate and a resilient economy, Panama provides a secure environment for business operations. The country's consistent economic growth, supported by robust financial services and infrastructure sectors, offers stability and confidence to investors and entrepreneurs alike.

 

4. Strategic Location and Infrastructure

 

Situated at the crossroads of North and South America, Panama boasts a strategic geographic location. The Panama Canal, a vital international shipping route, contributes significantly to the country's logistics and transportation sectors. Access to modern infrastructure, including world-class airports and ports, facilitates efficient connectivity for businesses operating in Panama.

 

5. Ease of Doing Business

 

Panama offers a streamlined process for company formation and registration. The country's business-friendly policies and efficient bureaucracy enable swift incorporation, allowing entrepreneurs to establish their entities quickly and with minimal administrative hurdles.

 

6. Currency and Banking Advantages

 

Panama uses the United States dollar (USD) as its official currency, providing stability and ease of international transactions for businesses operating globally. The country's well-regulated banking sector offers a range of financial services, including offshore banking, making it an attractive hub for international finance and investment.

 

7. Access to International Markets

 

By establishing a presence in Panama, businesses gain access to a growing market and benefit from Panama's free trade agreements with numerous countries. This advantageous trade environment facilitates market expansion and trade diversification opportunities for businesses looking to operate regionally or globally.

 

Setting up a Panama entity offers a host of advantages for entrepreneurs and businesses seeking to establish a strategic foothold in Latin America and beyond. From favorable tax policies and asset protection to political stability and logistical advantages, Panama provides a conducive environment for business growth and prosperity. Consider consulting with legal and financial experts to explore the specific benefits and opportunities available for your business venture in Panama.

 

Total Service

 

Through our local partners, we provide comprehensive support for Panama legal entity incorporation and Panama ship registration. Let us handle the establishment of corporations owning registration. We also provide legal, financial, and accounting services after corporation establishment to support operation.

 

We act as the contact point for our partners, with direct contracts with local partners. Communication will primarily be in English and Spanish.

 

Initial consultations involve discussions with local lawyers and accountants, with a consultation fee of $300 USD paid in advance, leading to direct contracts with these specialists.