Special Features
The ABC’s of IBC’s
On Offshore corps
By: Staff at Panama Offshore Legal Services / E-Mail: info@pos-inc.com || Phone (507) 227–6645
This article is a lesson in the basics of an IBC, otherwise known as International Business Corporation a formal name for what most people call an Offshore Corporation. Panama is the second largest offshore corporation jurisdiction in the world. Offshore corporations have been around here since the late 1920’s.
While the global economic crisis has greatly affected many countries around the world, Panama has enjoyed substantial economic growth during this period, which is why many business people are seeking shelter in Panama’s safe banking haven.
One reason is that, thanks to the Panamanian banking regulators strict guidelines on bank investments, Panama’s banks didn’t get involved with bad mortgages nor did they purchase any toxic securities backed by sub-prime mortgages.
Panama has unique laws guaranteeing anonymity and privacy and doesn’t levy any kind of taxes on corporations conducting business outside its borders. Another reason to set up international business corporations in Panama is for global asset protection and solid estate planning.
Offshore terminology
Offshore corporations are legal entities, separate than a “person,” with limited liability. A corporation can sell shares, sue and be sued, conduct all types of business, and can have perpetual existence. The term “offshore” refers to the fact that this corporation is created outside of one’s domicile country. The same term is also used when a Panama resident creates a corporation to conduct all of its business in other countries, thus “offshore”.
How are offshore corporations used?
Offshore corporations can own and operate businesses, issue shares, bonds, raise capital, guarantee obligations, buy or sell goods and services, make contracts, hire employees, rent office space, maintain checking and savings accounts, and create retirement plans for employees. Most offshore corporations are closely held ownership by one person or a small group.
What are articles of incorporation?
This is the document which establishes the corporation, gives its name, designates the share structure, and states the purpose of the corporation.
What are by-laws?
These are the rules and regulations that shareholders, officers, and the board of directors must abide by. The by-laws are created by the Board of Directors soon after becoming incorporated.
What are bearer shares?
Bearer share certificates do not indicate the name of the owner (shareholder). The person having physical possession of the document is the owner. Transferring ownership of a Bearer Share corporation is easy by giving the bearer share certificates to the new owner. These are not publicly filed or recorded anywhere guaranteeing the anonymity of the shareholder. Don’t lose the certificates as they are the only proof of ownership. Panama is one of the few countries left allowing bearer shares.
hat are registered shares?
Registered share certificates include the name of the owner (shareholder) on the document. The shareholder’s name is also included in the internal corporate records of the company.
What are off the shelf corporations?
These are ready made registered corporations which have never been used. They stand ready to begin conducting business upon being transferred to a new owner. Panama law firms often keep several “Off the Shelf” corporations available for clients in a hurry to begin conducting business. Waiting for a new corporation to be created and registered with the Panama government can take up to two weeks.
What is a registered agent?
Panama, like most countries, requires every corporation to have a Panama lawyer as its registered agent. The reason for having one is so that a known physical address exists for the corporation in order to receive official notices from the government and receive all legal service of process (legal notices, such as lawsuits). The registered agent is required to forward all of these notices to the corporation.
What are nominee directors?
Normally a corporation has named individuals as their board of directors. Panama offers the option of letting the law firm who creates the corporation have their own employees as the named directors. They are “nominated” to the board of directors. The owner of the corporation maintains the right to control the corporation and can order the nominee board of directors to act in certain ways.
Carnival is coming, are you prepared?
By Jacob Ehrler
The Carnival is coming to Penonome, Panama City, La Chorrera and Las Tablas. This pre-Lenten celebration “of the flesh” is coming to every part of Panama! Even the beach hotels where people go to get away from all the madness will feature Carnival-inspired shows and festivities.
Firework shows will be in the sky to accompany this grand tradition, in which Panamanians show off their culture, heritage and uncanny ability to have a good time. If your Carnival plans are not yet sealed, it is high time to call your best friends and figure out a game plan. The big party will be from February 18 to 21.
Festivities start early. Carnival fever strikes on Wednesday, February 15, when many professionals begin to take leave from their duties in order to get into the party spirit. Most businesses close down early by Friday at mid-day. The queens are crowned at a ceremony on Friday, February 17.
Carnival is designed to enjoy the “earthly pleasures” to their fullest before the coming repentance and Lent during 40 days following last day of the party, on Tuesday, February 21 – Fat Tuesday or ‘Martes de Carnaval’.
Tradition calls for everyone to get all pleasures and sins out of their system in order to prepare for the Easter celebrations of ‘Semana Santa’ – the country’s ‘Holy Week’, another summertime vacation period.
The big finale
Martes de Carnaval (Tuesday) is the last day of the Carnival on which Panamanians celebrate their Spanish heritage and the queens don the national Pollera dressin presentations. The Carnival rivalry and feuds over which group has put on a better show, as is the case between Calle Arriba and Calle Abajo, is all but dropped this day and the insults regarding the traditional float of an opposing camp are put aside.
The fervor rises by the morning though, where in Las Tablas, the opposing queens meet at the dawn of Wednesday morning for the final showdown, often accompanied by members of the National Police to keep the peace.
Where to do it?
The answer is anywhere you want. There are a few corners of the Republic without a party. Las Tablas and Panama City are the biggest crowd-drawers but the most recommended plan of action is to go to one’s favorite nook of the country and have a great time.
True Carnival sociologists, however, will concur that the best plan of action is to “Carnival hop” from one celebration to the next across the country. ‘Culecos’ are calmer by day in Pedasi while the evening parades in Las Tablas are unbeatable. There is no better way to soak up the spirit than to take in as much as you can possibly handle.