Like corporations in many of the world’s jurisdictions, Panama Corporations have a distinct legal personality. A Panama Corporation may enter contracts, invest, borrow, purchase and sell. At all times, shareholder assets remain separate and distinct from those of the company. In many ways, it is useful to think of a corporation as an artificial person, which protects its owners through the concept of limited liability. Limited liability offers protection to corporate assets, which otherwise might be vulnerable. This protective feature makes Panama Corporations a convenient vehicle through which to conduct business.

In addition to the protective features that business operators seek by forming Panamanian Corporations, there are several other reasons why businesses and people seek incorporation in Panama. Below we have listed several:

• Having an internationally-recognized entity to conduct business on behalf of the principals (including investments, project contracts, purchase of goods and services, conducting bank accounts, etc.) while maintaining privacy and discretion;
• Limiting personal liability of the principals more effectively through the issuance of bearer shares, use of corporate directors and officers, and limiting disclosure of other information;
• Holding assets internationally on a favorable tax basis whereby assets can be transferred between persons in a private transaction through the delivery of shares rather than an exchange of the underlying assets themselves;
• Conduct business in any jurisdiction in which a local or domestic corporation may conduct business; and
• Borrow or lend money.

Further, a Panamanian Corporation offers the following benefits:

• Incorporation in a leading financial jurisdiction;
• Access to the Colon Free Trade Zone;
• The U.S. dollar is the official monetary unit ensuring economic stability;
• Liability of the Panamanian Corporation is truly limited;
• Ownership of a Panamanian Corporation may be private or public;
• Panamanian Corporations enjoy worldwide recognition; and
• Panamanian Corporations offer the ability to hold assets of all descriptions through share holdings.

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