	Beth Anne Gray J., LL.B. (Hons.) P.O. Box 832-0816 - World Trade Centre - Panama City - Republic of Panama International Legal Services

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Pros and Cons of ownership of property in a Corporation:

The following summary of benefits and advantages of ownership of property in a Corporation is not intended as legal advice. Each particular case should be analysed on its own merits. This is merely intended to highlight issues which may be taken into account by the client together with their legal advisor in order to decide which is more appropriate for their particular case.

Description	Corporation	Personal Name
Set up Cost	$800.00 * see Billing	no cost
Effect on cost of purchase	Requires shareholder resolution authorising someone to sign contract and also company must be in good standing	If client not personally present in Panama for the closing, requires an authenticated Power of Attorney to be granted
Annual Cost	Corporation will incur annual renewal fees	no cost
Tax Freeze	Not available	Available to Pensioners, but does not exempt property from taxes altogether
20-year tax exemption on improvements	Not affected by ownership type	Not affected by ownership type
Estate Planning	The shares of the company (being personal property) will need to be passed to the heirs. But if they are bearer shares, simple delivery of the shares would be a valid transfer.	A last will and testament will be required in order to transfer title of the property to the heirs, or intestate probate will apply. Even with a will, a shortened form of probate will apply.
Sale of the Property	Can choose to either sell the company shares or to sell the property.	Only option is to sell the property
Capital gains payable upon the sale	Sale of company shares = 5% of total sale price Sale of the Property = 3 % of the total sale price (or the Cadastral value, whichever is higher)	Sale of the Property = 3% of the total sale price (or the Cadastral value, whichever is higher)
Property Transfer Tax:	Sale of the company shares = not applicable Sale of the Property = 2% of the total sale price or of the cadastral value (whichever is higher)	Sale of the Property = 2% of the total sale price or of the cadastral value (whichever is higher) Note: 2% + 3% = 5% of the total sale price = identical to the sale of company shares.

Another alternative which clients should consider is ownership of the property in a Private Interest Foundation.

For more information, please contact our office and request an appointment.

Panama lawyers, real estate transactions, concession applicaations, real estate due diligence, tax freeze, tax exemptions, real estate check list, donation of real estate, transfer of real estate

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Last modified 15-Mar-2010 16:38 -0500

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Last modified 03-Jul-2009 17:41 -0400

Pros and Cons of ownership of property in a Corporation:

Description

Corporation

Personal Name