The Republic of Panama occupies an area of 77,082 square kilometers and is situated between Costa Rica in Central America and Columbia in South America with coastlines on both the Pacific and Atlantic Oceans. Its capital, Panama City, is on the Pacific coast at the entrance of the Panama Canal. The country has a population of approximately 2 million of which 700,000 people live in Panama City.

The Constitution of Panama provides for a Republican form of Government. Citizens over the age of 18 years have the right and obligation to vote directly for a President and two Vice Presidents, and to vote for appointment of Legislators to the Legislative Assembly. For the purpose of the election of Legislators, the country is divided into Electoral Circuits with an average of 30,000 voters in each.

Panamanian law is based on the Spanish Civil Code, although the company law has been taken from the corporation law of Delaware in the USA.

The official language is Spanish. Documents in a foreign language, which require to be filed at Companies Registry must be accompanied by a Spanish translation. Equally company documents in Spanish are accompanied by an English translation. Spanish and English are used equally in business circles.

Panama City is linked by major scheduled airlines, through regular daily flights, with the principle cities of North, Central and South America, Europe and the Far East.

It has excellent telecommunications and postal facilities, and courier services are well established in the country.

The official currency is the Balboa, which, under a monetary agreement of 1904 with the United States, is at par with the United States dollar and is freely convertible. The US Dollar is also legal tender, and since there is no Panamanian paper currency it circulates freely.

By use of nominee services, it is possible to protect the identity of the beneficial ownership of a company incorporated in Panama.

The corporation law of the Republic of Panama provides that any two natural persons acting as the "organizers" and the "subscribers" may appear before a NOTARY PUBLIC to organize and constitute a corporation. (In Panama public notaries govern most entities under the supervision of a government appointed lawyer).

It is the usual practice for natural or juridical persons outside Panama to accomplish the formation of a Panama company through a local Panamanian law office, a trust company or a professional management company.

For the purpose of drafting necessary documents, the following simple information and particulars are supplied by the client to the incorporators:

NAME: A preferred name, with two alternatives, in the event that the desired name may conflict with a name already in use; expressed in any language, must include 'S.A.' (Sociedad Anonima), 'Corporation' or 'Corp.', or 'Incorporated' or 'Inc.' to clearly denote a limited liability entity.

OBJECTIVE: While the standard Articles of Incorporation for a Panama company intentionally provide a very broad scope of activities, it is not unusual to include one or more articles which deal specifically with the client's intended objectives.

CAPITAL: The capital of a Panama corporation is expressed as 'authorized capital' and there is no minimum capital or time limit requirement within which the authorized capital must be paid in. Unless there is a compelling reason to the contrary, it is standard practice to specify an authorized capital of US$10,000, represented by 100 common, voting shares having a par value of US$100 each, or to express the capital as being 500 common, voting No par value shares. In either case, the nominal capital registration tax (payable once only) is US$60.Shares may be issued to 'Bearer' or in 'Nominative' form. Preferred, Class A, Class B, voting, non-voting and other shares structures are permitted.

ORGANIZERS OR SUBSCRIBERS: Local nominees usually act as the organizers and subscribers for incorporation purposes.

DIRECTORS: A minimum (with no maximum) of three directors is required. These may be of any nationality, residence or occupation. It is general practice to employ local nominees for this purpose. Juridical persons cannot act as directors.

OFFICERS: A President , a Secretary and a Treasurer are required. While these must be natural persons (not juridical persons), there are again no requirements as to nationality, residence or occupation. While one person may hold more than one office, it is customary that the President should not also be the Secretary. One of the officers is usually named Vice-president. There may be as many Vice-presidents as required. Managers may also be named if desired. Local nominee directors and officers are customary.

DOMICILE: A Registered Agent domiciled in Panama is required and by law must be a practising lawyer or law firm. Local trust and management companies usually name their own lawyer as the Resident Agent.

DURATION: The corporation may have a limited or unlimited life; it is customary for the 'duration' to be perpetual.

TIME OF INCORPORATION: So simple is the formation procedure that incorporations can usually be effected within 5 to 8 working days, and if local management company has off-the-shelf corporations in stock, they can be purchased immediately.

SEALS AND MINUTES BOOKS: Corporate seals are not required, neither are Minutes or Shareholders Books. It is suggested that owners of corporations or their managers prepare their own seals with their corporate logos at their preferred printing shop. The same applies to Accounting and Minutes Books.