Should I Choose the Nominee Directors Service When Incorporating S.A.?

1. The main difference between both entities lies in the fact that while corporations (S.A.) are established to carry out commercial activities on a regular and direct basis, private interest foundations (PIF) cannot carry out commercial activities on a regular or direct basis, but rather through corporations. PIFs must be established for the purpose of asset protection, holdings, holding of any kind of assets, and others.

2. Corporations (S.A.) are constituted by a share capital divided into shares, whereas in PIFs there is capital but it is not composed of shares, but rather by contributions from the founder. 

3. Corporations (S.A.) must be composed of a Board of Directors made up of three (3) natural persons of any nationality (President, Secretary, Treasurer). PIFs must be composed of a Founding Council, which may consist of one (1) legal entity or three (3) natural persons of any nationality (President, Secretary, and Treasurer).

4. Corporations (S.A.) are composed of a Shareholders’ Meeting; the shareholders are considered the owners of the company and will be liable according to the percentage of their shares. The shareholders are not registered in any public document. In PIFs there are no shareholders; there is the figure of the beneficiaries, who are not considered the owners of the foundation; however, they are legally entitled to receive the profits of the PIF according to what is established in the foundation charter and the bylaws.

5. In PIFs there is the figure of a protector who oversees the actions of the founding council; in corporations (S.A.) such a figure does not exist. 

6. In PIFs, a document called the foundation charter is issued, which is a private document that establishes the main and secondary beneficiaries and what would happen in the event of the death of the main beneficiary. In corporations (S.A.) there only exist share certificates, whether bearer or registered. In the case of bearer shares, the owner is the holder of the shares; in the case of registered shares, to be transferred they must be endorsed. In this case, if the shareholder does not endorse the certificate and dies, a probate proceeding, whether testate or intestate, will have to be initiated. This is avoided with the figure of the PIF. This is why it is advisable that when the client operates through a corporation (S.A.), they also establish a PIF that serves as a holding company for the shares of the S.A.
   
   

Should I choose the Nominee Directors service when creating a corporation (S.A.)?

Many clients opt for this service when establishing an offshore company in Panama. Although it is not mandatory, it is often useful. There are several factors to consider:

Protection of your privacy – Advantages of appointing Nominee Directors

The client often chooses this service because they do not wish to appear publicly within the Articles of Incorporation. Let’s say you are the shareholder of the company and wish to have control over it without appearing publicly; when Nominee Directors are appointed, those individuals will appear as the administrators of your company in the articles of the public deed of incorporation. You obtain protection without giving up control because those directors will issue a share certificate in your favor. The Nominee Directors will also issue a General Power of Attorney in your favor so that you can have complete control over the company.

Nominee Directors have limited power

A client obviously worries that the Nominee Directors could gain influential power within the offshore company. The Nominee Directors, however, are only for the incorporation of the company. The true owner of the company (shareholders) will be the one who retains the rights to the company’s bank accounts and shares. The Nominee Directors will not have any rights related to the company’s bank account, due to the fact that Nominee Directors are not signatories of said account. The shareholder must always be the signatory.
The director nominee, however, acts as a public administrator of your company. Also, in many cases, the minutes of the Board of Directors and Shareholders’ Meetings will need to be signed by them. The law firm that incorporates your offshore company will also assist in the Nominee Directors Service. Therefore, it is important that you work with a law firm you trust.

Purpose of opening a Bank Account

Due to the fact that in Panama it is a requirement for all members of the company to travel to the country for an interview with the bank, in many cases it is difficult for the client to arrange the trip for all members. In the case that the nominee directors cannot travel, the only one who will travel will be the shareholder(s) / signatory(ies). Both banks in Panama and outside of Panama require that the directors provide the bank with a bank reference letter, commercial reference, and personal references, even if they are not signatories of the account. In the case that the client chooses to appoint Nominee Directors, they will only have to worry about providing their own documents. At Panamá Legal Lab, the Nominee Directors are members of our law firm; real people with bank references as well as commercial references, so if clients need to provide those documents to a bank or any institution, they will be happy to assist you. It is very important to take this into account when choosing this service.

Nominee Directors in Panama: Protection and Advantages for Your Corporation (S.A.)

Establishing a corporation (S.A.) in Panama offers numerous benefits, from tax advantages to asset protection. One of the most important decisions you must consider is whether or not to use Nominee Directors. This service, provided by prestigious law firms such as Panamá Legal Lab, can offer an additional layer of privacy and control for shareholders.

Privacy Protection: Advantages of Appointing Nominee Directors

When you decide to create a corporation (S.A.) in Panama, one of the main concerns may be the protection of your privacy. Many clients opt for the Nominee Directors service to ensure that their name does not appear publicly in the Articles of Incorporation. This service, provided by Panamá Legal Lab, allows the Nominee Directors to appear as administrators of your company in the articles of the public deed of incorporation, while you maintain full control.

The benefits of this approach include:

• Assured privacy: Your name will not appear in public records.

• Control without exposure: You will receive a share certificate and a General Power of Attorney issued in your favor, allowing you to manage the company without revealing your identity.

• Additional protection: The Nominee Directors of Panamá Legal Lab are experienced professionals, ensuring safe and confidential administration of your S.A.
  
  

Limitations of the Power of Nominee Directors

Despite the advantages, it is natural to be concerned about the level of power that Nominee Directors could have within your company. It is important to emphasize that, in reality, their power is limited. Nominee Directors are appointed mainly for the incorporation of the company and have no rights over its bank accounts or shares.

The real control always remains in the hands of the shareholder. It is the shareholder who will retain all rights over the company’s bank accounts and shares. The Nominee Directors will not be signatories of the bank accounts, ensuring that they cannot influence the company’s finances.

In addition, Panamá Legal Lab ensures that the Nominee Directors act only as public administrators of your company. Although they may need to sign minutes of the Board of Directors and Shareholders’ Meetings, their power does not extend beyond what is necessary to maintain the legal structure of the company. Therefore, working with a trustworthy firm like Panamá Legal Lab is crucial to guarantee the integrity and security of your S.A.

Purpose of Opening a Bank Account

Opening a bank account is a crucial step in the process of establishing a corporation (S.A.) in Panama, and it can present certain logistical challenges. In Panama, it is a requirement that all members of the company travel to the country for an interview with the bank. This can be complicated, especially if the members of the company are located in different parts of the world. However, the use of Nominee Directors can significantly simplify this process.

When you decide to appoint Nominee Directors, only the shareholder or main signatories must travel for the interview with the bank. This reduces the need for coordination and facilitates the process of opening the bank account. Furthermore, both banks in Panama and international banks require that directors provide a series of documents, even if they are not signatories of the account. These documents include:

• Bank reference letter

• Commercial reference

• Personal references

Opting for the Nominee Directors service when creating a corporation (S.A.) in Panama can offer multiple benefits, from protecting your privacy to simplifying the process of opening a bank account. This service allows shareholders to maintain full control of the company without having to appear publicly, which is a significant advantage for those who value confidentiality.

It is crucial to understand that Nominee Directors, although they appear in public documents, have limited power and cannot influence the financial decisions of the company. Working with a trustworthy firm like Panamá Legal Lab ensures that these directors act in a professional and secure manner, safeguarding the integrity of your S.A. at all times.

Using Nominee Directors can be a strategic decision for many entrepreneurs seeking to establish a corporation (S.A.) in Panama. Panamá Legal Lab offers a reliable and experienced service, facilitating all aspects of the process and ensuring that your company complies with all necessary legal and operational requirements. For more information and personalized assistance, do not hesitate to contact Panamá Legal Lab.