Panama as a Tax Haven

Because of a number of strategic decisions by its government, Panama is a tax haven that is the perfect offshore destination for investment. Panama's tax laws have made it the choice of individuals and companies as they become aware of the benefits and privileges of Panama 's tax haven status. Panama corporations and Panama foundations, coupled with Panamanian banks, form the very best in asset and identity protection and the country has become the best place in the world for offshore investment.

Panamanian Governmental Contributions

Panama is one of the most stable democracies in the world and it is also the perfect offshore jurisdiction for business development. While Panama continues to emerge as a developing country, the cost of living is low, the labor rates are still very competitive and inflation is historically a non-factor. This environment makes the country fertile ground for increased business opportunities and companies are rewarded for their investments with the tax haven in Panama.

In addition, the government has enacted a number of laws that promote Panama as a tax haven as well as an ideal business location. Panama taxes are low and income from foreign investment is not even taxed. The country has a booming economy and foreign investors are encouraged to make Panama investments with benefits such as tax breaks and offers of residency.

Panama Asset and Identity Protection

Panama's tax haven status is well deserved not only because of the benefits that the government provides but also for the best asset and identity protection in the world. Panama has created strong laws for attorney/client privilege, banking and businesses that allows individuals and corporations to conduct business in virtual anonymity. Panama has become the "new Switzerland" with Panama banking being seen as the most attractive in the world. In addition, this country of nearly three million people boasts of the fact that they have over 400,000 corporations registered within Panama's borders and the second largest free trade zone in the world.

Panama Banking

Panama banking has created the "new Switzerland". The banking district in Panama City boasts of over 150 different international banks and the bank secrecy laws are the very best in the entire world. Since Panama does not enter into tax treaties or allow other governments to fish for information within its borders, information about accounts and account holders in Panama simply isn't available throughout the world. What's more, there are severe fines and jail terms for anyone convicted of passing banking information from Panama to other branches of international banks. Even wire transfers can be sent without information linking them to individuals, eliminating the "cyber-trail" that countries use to regulate the movement of money in and out of their respective borders.

Panama Protection of Legal Information Privileges

A strong feature of legal dealings in Panama relates to attorney / client privilege. The government of Panama enacted laws that strictly limit the information that can be required of an attorney regarding his or her clients. Attorneys can freely discuss legal matters with their clients knowing that the government won't be in contact with them attempting to obtain information. Panama's tax haven status has become desirable to many people because of the government's insistence about staying out of business and personal affairs.

Panama Tax Havens and Business Development

Panama Foundations

A Panama foundation is similar to the combination of a will and a trust but it is not limited by the lack of asset protection that exists elsewhere. This structure is patterned after the foundation that exists in Lichtenstein yet is it better because it is less expensive to start and maintain and it enjoys the protection of the asset and identity laws of Panama. The foundation makes Panama a perfect tax haven because its founders can anonymously create it, fund it and operate it. A Panama foundation cannot conduct business, but it can own corporations that do business. Because the holders and directors of a Panama foundation are not identified, money coming into the foundation is not linked to a specific person. This fact, coupled with Panama's refusal to tax income from foreign sources makes the structure a perfect tax haven for people from other countries.

Panama Corporations

The Panama corporation is the second part of the business model that makes Panama an excellent tax haven. Panama allows the formation of Anonymous Bearer Share Corporations; these corporations do not have to be publicly registered, their leadership is not made publicly known and the only record of ownership is paper shares. Because of this, Panama corporations can be operated without any interference from the government and since its assets and owners are not known, they cannot be confiscated for satisfying any kind of lien or judgment. Panama does not pierce the "corporate veil", so other countries cannot pursue people to this offshore jurisdiction. Combined with the Panama foundation, the corporation creates an excellent Panama tax haven for the people of other countries.

Business Development

Panama done a good job of fostering business development and it has become desirable by encouraging business growth as well. In order to attract new business started by foreign investors, Panama has implemented visa programs which has the express intention of luring foreign investors and businesses to relocate or expand in Panama. By not taxing income from foreign sources, the structure of Panama foundations, Panama corporations and offshore banking creates a secure tax haven for the people of many other countries.

Panama's Tax Haven - Luring International Businesses to Invest

The ultimate tax haven is Panama because the government is committed to encouraging business growth. They have shown this commitment by enacting laws that foster asset protection, identity protection, business development and shelter from foreign taxes. The government is committed to attracting new businesses and protecting the ones that are already in Panama. Panama has become the location for doing global business.

As anyone in business knows banking and legal matters are a prerequiste to building a secure business. Panama's industries of tourism, real estate, business services, and investment services attract much foreign money each year. This article "Panama Banking and Legal Services" will better prepare you with the some of the intrisintic banking and legal services available to you.