Panama Private Foundation Part 9 – Panama Private Foundation Maintenance and Compliance Obligations

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Annual Maintenance Costs

The annual maintenance costs for Corporations and/or Foundations are the following:

Description Paid to Frequency Required Amount
Corporate Franchise Tax Government Annually Mandatory 300
Tax Filing Fee Accountant Annually Mandatory N/A
Registered Agent/
Office Fee		 Law Firm Annually Mandatory 500
Nominee Foundation Council/
Directors Fee		 Law Firm Annually Optional 600
Mail Drop Services Fee Law Firm Annually Optional

 

Below you will find a detailed description of each of the above-mentioned costs.

 

Corporate Franchise Taxes

 To keep a corporation or foundation in good standing with the Panamanian Government, each entity must pay a flat annual corporate franchise tax (“tasa unica”) of USD300 to the Panamanian Government (Public Registry).

 

Please note that if the annual corporate franchise taxes are not paid, the Public Registry will not permit any changes to the entity at the Public Registry, and will not allow you to obtain any Certificates of Incorporation (certificate of good standing) for the entity, which are generally required by financial institutions from time to time, as part of their due diligence procedures/policies. In addition, certificates of good standing are generally required for transferring of property held within corporations and/or foundations.

 

According to Panamanian Law, the government corporate franchise tax payment deadlines are based on the Incorporation date, as follows;

 

Incorporation Date: Tax Payment Deadline:

From 1 of January to 30 of June 30: July 15

From 1 of July to 31 of December 31: January 15

 

Late Payment Penalty:

If the annual government corporate franchise tax (“tasa unica”) is not paid on or before the due dates mentioned above, the entity will be charged a late penalty of USD50.00.

 

Second Late Payment Penalty:

 

If the annual corporate franchise tax (“tasa unica”) and first late penalty is not paid after the second “deadline” period, the entity will be charged a second late penalty of US$300. For every additional “deadline” period missed thereafter, a USD300 late fee will be incurred.

 

Tax Filing Fess

There are two types of tax filings in Panama:

Operational Tax Filing: this is a tax filing for operational entities (corporations or foundations), in other words, entities that are operating physical businesses or generating income from sources within the territory of the Republic of Panama. This type of tax filing requires a detailed declaration of income, duly audited by a Panamanian Certified Public Accountant (CPA). The costs for operational tax filings can vary from $250 or more depending on the nature and size of the business.

 

Non-Operational Tax Filing: this is a tax filing for Non-Operational entities (corporations or foundations), in other words, entities that are operating offshore, outside of the territory of the Republic of Panama, or entities that are not operating businesses or generating income from sources within the territory of the Republic of Panama. This type of tax filing requires a simple declaration of non-operation (or offshore operation), duly signed by a Panamanian Certified Public Accountant (CPA). The costs for Non-Operational tax filings are a flat $65 per filing.

 

All entities (operational or non-operational) must file annually, from January 1st to March 31st.

 

Registered Agent / Office Fees

The resident agent / office is the law firm or attorney that represents the entity (corporation and/or foundation) and the name of the law firm or attorney and office address of the entity is stated on the public deed of the entity at the Public Registry. To keep a corporation or foundation in good standing with our law firm, each entity must pay an annual resident agent / registered office fee of USD500 per year, starting one year from the date of incorporation.

 

Nominee Foundation Council Fees

 Nominee directors or nominee council members are an optional service provided by our law firm. If requested, our law firm provides the directors or council members that are required for the formation of the corporation or foundation. The fees for nominee directors or council services are USD600 per year (for three nominee directors or three nominee council members), starting one year from the date of incorporation.

 

Optional Mail Drop Services

Mail drop (mail forwarding) services provides you with a post office box, and a physical address in Panama where your corporation and/or foundation may receive post mail correspondence or courier packages. As the mail and/or packages are received, they are forwarded to you as per your instructions. If you have subscribed to the Mail Forwarding Service, then you paid for the first year of service at the initiation of your subscription. To renew your Mail Forwarding service, there is an annual fee of USD300.

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