Important Note about Company Registration in Panama
Foreign Exchange Control
As per the treaty signed between the US Federal Reserve Bank of New York and the state bank of Banco Nacional de Panamá in 1904, the state owned bank is authorized to provide the USD. However, other banks are not restricted to import USD inside Panama.
Type Business Entities
Following the are the types of company structures that can be formed and incorporated in Panama:
- Limited liability company,
- Limited liability partnership,
- General partnership,
- Joint venture and
- Branch of a foreign company.
The transactions between the related companies should evaluated based on the arm’s length principle defined in the guidelines of OECD. There are several things that should be considered in the transfer pricing study like:
- transactions between the independent parties
- operations should be taken into account
- activities and/or economic functions
- terms & conditions of contract
- business strategies and monetary risks
Once the comparative analysis has been completed, any of the five transfer pricing process defined in the Panamanian law should be chosen. The annual statements showcasing the transactions between related companies should be submitted within 6 months of the first fiscal year to the tax authorities
Controlled Foreign Companies
Real Property Tax
The property tax applied on the Panamian real estate property sites may range from 1.75-2.1%.
The transfer tax applied on the real estate property would be 2% or depending on the cadastral value of the date of transfer.