Why Panama?

To choose an ‘offshore’ jurisdiction is an integral part of establishing an ‘offshore’ structure or a financial account. The jurisdiction chosen by you must have as minimum, the following ten characteristics:

1. A Full Tax Haven – no capital generates taxes, no capital gains tax, no inherited taxes, etc.

2. Favorable Laws regarding Organization of Corporations – The organization laws of corporations of the country must allow you to have “Bearer Shares”, to have directors from any country, without many expenses, and be able to constitute Private Interest Foundations.

3. Stability of the local currency, no regulation restrictions – there must not be any restrictions in the movement of funds within or outside the country.

4. Strict Privacy Laws – strict privacy laws must exist to protect your bank information and information of corporate books from any person, including foreign governments.

5. Stable Government – The Government of the country must be stable and must use the legal system opposite to your country of origin (if your country uses the Anglo-Saxon Law, you must search for a country that uses Roman Law). The country must be safe to visit.

6. Stable Economy – The economy of the country must be stable.

7. Excellent Banking System – The Banking System of the country must be advanced in both areas of the bank infrastructure, government audit and technology.

8. Excellent Communication System – The Communication System of the country must be technologically advanced as well as first world countries are.

9. Compatibility of the Language – The language of the country must be convenient for your understanding.

10. Compatibility of the Time Zone and Close Location – The Time Zone of the country must be such that allows you to contact your ‘offshore’ provider or the financial institution, during your regular business hours and allow you to travel to the country if needed in order to manage a business.

After a careful investigation, you may find that Panama is an ideal jurisdiction for your ‘offshore’ needs. The Panamanian Corporations Law was enacted 70 years ago and since then it has been copied by many other tax haven nations, such as the Bahamas, Saint Vincent, Bermuda, Belice, Isle of Man, etc. Panama has been one of the most popular places to constitute corporations worldwide, with more than 350,000 entities registered. Panama also offers Private Interest Foundations, which are one of the most used vehicles for assets protection and assets planning, available today.

Panama offers the following benefits and advantages:

1. Panama is a 100% Tax Haven: International Panamanian Business Corporations (IBC’s) and Private Interest Foundations do not pay taxes on any of their incomes (as indicated below), nor shall inform the Panamanian Government.

·       No income tax.

·       No capital gains tax.

·       No interest income tax.

·       No sales tax.

·       No tax upon issuance of corporate shares.

·       No taxes for shareholders.

·       No tax for share sales or share transfers.

·       No capital stock tax.

·       No property tax.

·       No state tax.

·       No gift tax.

·       No stamp tax.

·       No inheritance tax.

·       No inventory tax.

2. Panama offers the most flexible and favorable corporations law in the world. Private Interest Foundations are also available and they are one the most used estate planning structures in the world today.

·       Panama is the registered domicile for more than 400,000 corporations and foundations, becoming the second most popular jurisdiction for corporations in the world, after Hong Kong.

·       Panama does not impose any report requirement for non-resident corporations in Panama.

·       Panama does not allow “piercing the corporate veil”.

·       Share Certificate of Panamanian Corporations may be issued in a registered manner or to bearer (anonymous form of property) with or without par value.

·       Panamanian corporations do not require Pain-In Capital, nor exist a time limit in which the authorized capital must be fully paid.

·       The directors of Panamanian Corporations, officers and shareholders, may have any citizenship and may be residents of any country.

·       Neither directors nor officers in Panamanian Corporations need to be shareholders.

·       Directors, officer and shareholders meetings may be carried out in any country and accounting books may be kept in any country.

·       It is not necessary for the interest parties to be present in Panama in order to establish a corporation.

·       Corporations engaged in business outside of Panama do not require a trade license for ‘offshore’ business activities.

3. The currency of Panama is the United States Dollar and Panama does not have currency exchange control or change restrictions, therefore the funds may enter and exit the country freely.

·       Panama uses the United States Dollar as legal tender (currency), establishing monetary and tax disciplines and maintaining a very low inflation rate, under two per cent during the last 40 years.

·       The dollar economy isolated Panama during worldwide economical crisis. During the Asian currency crisis in 1998, Panama became one the healthiest economies in Latin America.

·       There are no currency exchange controls. Panama has no restrictions regarding money delivery abroad, including dividends, interests, branch gains and royalties.

·       No restriction of founds which enter or exit the country.

4. Panama continues to maintain what we consider the most stable laws regarding banking confidentiality and corporate books in the world, which are established in its Political Constitution. With the British Regulation Proposal to remove the bank secrecy and corporate books in the ‘offshore’ territories of the United Kingdom, it is clear that Panama remains as the safest financial ‘offshore’ centre – where privacy and confidentiality is not only respected but rigorously protected by Constitutional Law.

·       Panama offers the best laws in the world regarding bank secrecy.

·       Panama offers the best laws in the world regarding corporate books confidentiality.

·       There is no ‘Piercing of the Corporate Veil’ in Panama.

·       Revealing bank information to third parties is a crime, and it is punished by jail.

·       Panama does not have mutual legal assistance treaties (TALM in Spanish) to share bank information with other nations and does not acknowledge judgements issued by courts from other countries. (Under the new laws, there are exceptions in cases of money laundering or drug smuggling).

·       Panamanian Corporations offer “Bearer Shares”, allowing shareholders to remain 100% anonymous and private.

·       Private Interest Foundations allows Protection and Will Private Documents, allowing the controllers (protectors) and beneficiaries of the Private Interest Foundation to remain 100% anonymous and private.

5. Panama has what it is considered to be by government analysts the most stable government of Central and South America.

·       Democratic government since 1990. The Panamanian Government is ruled by the Executive Body which is composed by the President and Two Vice-Presidents, democratically elected for a period of five years by direct vote.

·       Mireya Moscoso, assumed power on September 1^st, 1999 after wining the presidential elections on May 2^nd. Moscoso is the first female president of the country and the leader of the country at a moment of great historical importance, when the Panama Canal begins a new era under the Panamanian management.

·       The Panamanian militarism was abolished by constitutional amendment in 1994, and the government continues to have a security arrangement with the United States of America, due to the Neutrality Treaty of the Panama Canal. As a result, the risks of a military regime comeback are virtually inexistent (Source: Euromoney Report/Lehman Brothers, February 26, 1999).

·       Stable government with an excellent government structure.

·       Attitude and government policy in favor of commerce.

·       Roman Law System.

·       Moddy’s has issued Panama a sovereign debt ceiling of Ba1 and Standard & Poors has issued a default risk rating of BB+.

·       Panama is a peaceful country without military. Unlike other countries, the concerns regarding personal security are limited. Panama has the lowest crime rate in Central and South America.

6. The Panamanian Economy is one of the most stable, prosperous and advanced in all Central and South American.

·       Panama is the home to the second bigger distribution and trade centre (free zone) in the world, followed by Hong Kong. At Panama’s Colon Free Zone operate more than 1500 international business of import/export, more than 250,000 visitors are received per year and more than US$11 billions are generated per year in exports and re-exports.

We will be glad to assist you, if you need further information please contact us; we will answer any enquiry you may have.