1.      What are the main types of companies in your country?

Sociedad AƄonima, “S.A.” (Corporation) which is by far the most used.

Sociedad de Responsabilidad Limitada, “S.R.L.” (Limited Liability Company) and until recently seldom used.

2.      Which is the most preferred type of company by foreign investors?

“S.A.” for larger number of shareholders.

“SRL” for smaller investments. SRL is typically recommended by US tax advisors and are becoming more common.

3.      What are the basic capital requirements of this company? (minimum amounts, types of capital, deadline of capital contribution)

There are no minimum capital requirements.

S.A.: can issue common and preferred stock, easily transferred to third parties (endorsement of shares). Stock registry id private. Bearer shares must be given in custody to a registered custodian.

SRL: the capital stock is divided into individual registered quotas or participations with a minimum of two members. Membership is public and any transfer of the participations must be recorded in the Public Registry.

4.      What are the basic rules of shareholders liability for company debts in this company?

No personal liability for the obligations of the entity. The liability of the shareholders is limited to their capital contribution.

5.      What are the basic management requirements for this company? (only natural persons, or nationals can be managers etc.)

S.A.: managed by a Board of Directors made up of at least three individuals or legal entities. They must have a President, a Secretary and a Treasurer, which can be the same individual entity.

SRL: one or several managers usually designated to manage the business. They can be individuals or legal entities.

Shareholders or members can be directors, managers and/or officers. Directors can be officers too. There are no nationality requirements. Directors or managers are not required to be either residents of nationals of Panama.

6.      How long does the registration procedure of this company take?

Between 2 and 4 business days day through the Public Registry.

7.      What are the main costs of formation of this company in local currency?

They start at USD 1,200.00 plus V.A.T. It includes nominal subscribers, notary fees, registration fees, first annual corporate tax, notarial paper and legal fees. Price may increase depending on the complexity of the entity.

8.      What is the average attorney’s fee of the formation of this company in local currency?

Included in the incorporation cost.

9.      What are the basic publicity requirements of this company (filing of company changes, financial reports, etc.)

A Notary Public must record the articles of incorporation.

Must file articles of incorporation and all changes with the Public Registry.

Financial reports are usually private.

10.   What are the main auditor requirements?

-        No obligation to appoint an auditor (except for regulated companies, e.g. banks, public utilities…, and public companies).