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January 2010 Edition
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Panama as an Offshore
Jurisdiction
By: Gisela Martinez
Panama
has a number of unique attributes that make this a great asset protection
jurisdiction for corporations, foundations, banking and stock brokerage
accounts. Some call Panama the Switzerland of Latin America but this is not
fair, Panama is far better than Switzerland and any other jurisdiction. Read
why Panama excels:
* Offshore derived Income is not taxed and does not need to be reported. You
can have a Panama Corporation, and/or Foundation that banks in Panama and
has an office in Panama and yet will not pay any Panama taxes if all the
income is derived from offshore. Right here is a big reason for choosing
Panama.
* Bearer Share Corporations are allowed in Panama. Most jurisdictions have
eliminated bearer share corporations. They are referred to as an S.A.
Corporation having this designation after the corporate name. This means the
ownership of the Corporation is not recorded anywhere just the directors
(which can be employee professional directors provided by our law firm).
These corporations can be used to own or control assets such as bank
accounts, stock brokerage accounts, real estate, boats, planes, vehicles,
businesses, precious collectibles like artwork, jewelry, stamps, coins, etc.
The owner has the stock certificates of the company which can be transferred
privately as often as needed with no reportage of the new owners. No one
need know who owns the corporate shares except the original owner and new
owner. When you think about it ownership could be transferred 10 times in a
day.
When you send an international bank wire using the S.A. Corporation no one
monitoring the international wires as some countries do knows who the actual
owners of the corporation are that are receiving the funds. If ownership of
a corporation is publicly recorded rest assured it is in numerous databases
and can be accessed in seconds to determine who is actually receiving money
sent to a corporation.
* Panama uses the US Dollar as its currency. No currency conversion costs.
No currency devaluation problems or issues like most of the little tax haven
countries have. In Panama the ATM machines spit out US $20 bills. Even USA
coins are used in Panama.
* Panama is stable. It is a neutral country. Panama controls the Panama
Canal and does not have a standing army.
Most of these small countries never ever use their armies to repel an
invading army from another country. These little banana republic countries
use their armies to control the people, suspend elections, hold rigged
elections, keep dictators in power under the guise of democracy etc.
Panama is in a treaty with the USA regarding the Panama Canal which Panama
has sole control over.
If the canal is threatened by a foreign power as in an invasion, the USA has
the right to come in and protect the canal and the canal zone which is the
area surrounding the canal (25 sq. miles only, not the entire country) -
think aircraft carrier groups, marine expeditionary forces, air force
fighter planes, navy seals, etc.
The treaty does not allow the USA to take over Panama per se just the few
square miles around the canal, not the banking district. So who is crazy
enough to try and attack Panama, a UN certified neutral country, no one. US
air force jets could be in Panama within two hours, an aircraft carrier
group would probably be there in 24 hours. So we can forget about Panama
being invaded by another foreign power, it would be essentially the same
thing as attacking the USA directly.
The same would apply if a dictator tried to seize control over Panama. The
USA would see this as a potential threat to the Panama Canal and take
military action, fast. The USA has no authority in Panama. Their Federal
Agents have no authority or power. USA courts have no authority in Panama.
Panama is a free country that has a treaty with the USA concerning
protection of the Panama Canal.
Interestingly enough China is involved heavily in commercial operations in
the canal ports and also has a vested interest in seeing Panama and the
Canal operate freely and smoothly.
If anything happened to the Panama Canal shipping worldwide would be
interrupted which means there are a lot of nations that want to see Panama
operate as a free democracy maintaining it’s neutral status. Panama is at
very low risk for revolution or military attack.
Panama holds free elections as a democracy, really and truly. Panama cares
about their people. Medical care is affordable, food is cheap, housing
affordable with special projects for the working folks to own their homes,
homeless people are absent, college is made affordable and many young people
attend. Panama has two medical schools, two dental schools, two law schools
etc.
In Panama 15%-20% of the work force are employed by the 135 banks domiciled
there.
Since Panama values these jobs do not expect to see any changes in banking
laws, same for their corporate laws. Panama has over 400,000 corporations
domiciled there. The only information sharing going on concerns bona fide
criminal cases on file in a court as a criminal prosecution, serious
criminal cases of money laundering and narcotics trafficking, terrorism, and
child pornography.
Panama has little interest in pursuing fiscal crimes. Income tax violations
in Panama are civil offenses only. Panama also serves as a maritime registry
for ocean going vessels. Panama is anything but a banana republic. You can
feel safe and secure in Panama. Go for a visit if you like.
* Panama Banks are stable and well established with substantial assets.
Panama Savings and Loans have $10,000 insurance on the individual accounts.
Panama Banks have the best privacy laws in the world; the BEST got it, the
VERY BEST. You have the greatest chance of protecting your money from your
potential or actual financial enemies in Panama.
If you go to actually visit some of the other frequently used asset
protection countries you see unpaved streets, poor impoverished people, lack
of computerization in government offices, ancient telephone systems, poor
health care, a government that is as corrupt as can be and you may find out
your "Bank" is located on an unpaved road, in a second story walk-up office
building over a grocery store. You do not want to bank in these places.
People have lost billions banking in these island and banana republics. In
Panama your bank may very well have a 40 story modern hi rise office
building with their name on it.
* In Panama as one of our clients you are going to be banking with a bank
that has a real banking license. This means that the bank can conduct
transactions with citizens of Panama as well as citizens and companies
located outside of Panama. The bank will have branch offices with tellers,
drive through windows, ATM machines etc. The bank has to post $10,000,000
cash with the government as one of their license requirements. In many
offshore jurisdictions there are “Offshore Banking Licenses.”
These licenses allow the bank to only open accounts for people who are not
citizens of the country.
Sort of makes you feel scared or it should. These offshore banks can't do
business with residents of the country they are located in! Additionally the
deposits required for an Offshore Banking license in some of these
jurisdictions is typically $100,000 to $1,000,000 compared to the
$10,000,000 Panama requires. Panama banks have their own ACH system which
allows for online transfers from one Panama bank to another at a cost of
about $1.00 per transaction.
Currently thirty Panama banks are in the system. These transfers do not go
over the international wire systems. Panama banks allow for the deposit of
checks drawn in US dollars, clearing takes two to three weeks. Most offshore
banks will not take checks any more or if they do, they put long holds on
them like ninety days.
* Panama was built and maintained by the Americans up until 2000.
Panama is loaded with skyscrapers that are 30 to 50 stories high. You can
drink the water, there is American type electrical systems, you can use
American appliances in Panama, good paved roads, really excellent internet
perhaps better than what you have in your country, good phones, and it is
only 2.5 hours from Miami, Florida. Panama is a remarkably crime free
country - New York City has more violent crime in one day than Panama has in
a year.
* English is always spoken by people working in Panama Banks and the Nicer
Hotels, Fine Restaurants, Law Firms and by the Doctors.
* You DO NOT have to physically go to Panama to get a corporation,
foundation or bank account in Panama WITH US. Our business connections are
unique in this regard. Panama is the undefeated world heavyweight champion
when it comes to privacy and asset protection.
* Tax Treaties - Panama is in none of them. Click here to see a list of
countries with tax treaties with the U.S.
* Mutual Legal Assistance Treaty (MLAT). Most websites do not even want you
to know about this, we give you the link to read it all yourself: http://travel.state.gov/law/info/judicial/judicial_690.html
Essentially Panama will cooperate in a multi-national case involving
narcotics and money laundering (these crimes need to be tied to narcotics).
If you are not a narcotics dealer and are not a money launderer you should
not be concerned by this.
Panama will also cooperate in cases of terrorism and child pornography. The
MLAT requires that there first needs to be a criminal prosecution case on
file in the criminal courts of the requesting government (which means no
fishing expeditions).
Then through diplomatic channels involving the embassies, requests are made
for information, then reviewed by Panama officials and a decision on
compliance is made or requests for more information are made so a
determination can be arrived at.
These cases can take months and even years for completion. At times the
country where the bank is located has been known to once alerted to the
problem, conduct their own investigation first and this usually requires
them to seize the relevant records and documents which can stall the process
for a long time even years since their justice systems typically moves quite
slow and statues of limitation can run out.
Please don't construe this to mean Panama does this routinely, it is just
something that does occur from time to time around the world. The MLAT has
no application to civil cases such as divorce, civil judgments, bankruptcy,
business litigation, any sort of civil litigation, civil tax matters etc.
Taxation matters of any sort are not covered by this as far as Panama is
concerned.
Income tax evasion is a civil (non- criminal) offense in Panama as are all
tax matters.
Even Switzerland cooperates on income tax cases if the return is filed
falsely like all income was not declared, things were omitted or so the
complaining government says. Belize has tax treaties as do most of the so
called "tax havens". Panama has no extradition treaties.
About the Author:
The author is a member of a
Panama Law Firm fluent in offshore procedures, tactics and practices. To
learn more about Panama go to:
www.panamalaw.org
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