Panama is located at a strategic point in Central America situated on the Isthmus connecting South and North America. It is bordered by Costa Rica and Columbia with the Caribbean Sea to the north and the Pacific Ocean to the south. A former Spanish Colony, Spanish is the official language of the country but English is widely spoken in urban areas and is used in international business and commerce.
The economy of Panama is the fourth largest in Central America with the fastest growing economy and largest per capita consumer. Panama has a democratic government since 1990, which has produced a strong and stable government with little risk of reverting back to military rule due to the intervention and continuing support of the USA.
Panama offers some of the worlds most flexible and favourable incorporation laws in the world. There are approximately half a million corporations and foundations in Panama making it the second most popular offshore jurisdiction in which to incorporate a company, coming second to Hong Kong. Panama also has the second largest international distribution and free trade centre in the world, again second to Hong Kong and there are over 150 international banks located in Panama, behind only Switzerland.
With an economy so dependent on services and particularly centered on the financial sector the need for strong governance is essential. In the 2004 World Bank Report on the Observance of Standards and Codes (ROSC) it was stated that Panama had made impressive progress since the late 1990’s with new security, banking laws and high quality reporting that has come in line with international best practices. However despite new legislation aimed at increasing compliancy and legitimacy Panama still retains a high degree of privacy which is vigorously imposed and protected by constitutional law. Revealing confidential information to a third party is a crime punishable by imprisonment.
Panama IBC’s benefits are renowned for offering excellent tax benefits, asset protection and high confidentiality.
Some of the benefits are listed below:
- Panama has a territorial tax system which means that income is only taxed if it derives from Panama therefore no tax is payable when income is obtained from a source outside Panama.
- The incorporation process is quick and the ongoing maintenance costs are minimal.
- Minimal reporting requirements, no audit is necessary.
- Corporate assets or capital of a Panama company can be kept outside Panama.
- There are no residency requirements or restrictions with regards to Owners, Directors or Shareholders.
- Shareholders and Directors meetings may be held and the Directors may attend personally or by proxy.
- No restrictions on shares. Shares may be held in registered or bearer form.
- No paid up capital requirement.
- No inheritance tax.
- No currency exchange controls.
- Legal protection provided for confidentiality of business and banking transactions.
- Excellent infrastructure and communications.
Have the Many Benefits of Offshore Banking Left the Industry Open to Abuse?
The overseas banking industry is a billion-dollar business. Its no surprise that during the last decade, criminals have discovered ways to circumvent and exploit the system, ultimately giving the offshore world a bad reputation. This article looks at the many benefits associated with overseas banking; and how this has left the industry open to abuse.