Since we’re dealing with generalities, I’ll start with a bullet point list of reasons to do business in Panama. For more information about your specific business, I will refer you to a business attorney that can help you.
- Tax Haven. If you haven’t explored the benefits of a tax haven country yet, prepare to fall in love. Panama is a tax haven, which means there are no taxes on profits earned in Panama. This is only the start, though. There are also no capital gains tax on offshore investments, no interest income tax, no inheritance tax, no gift tax, and no estate taxes.
- No Currency Restrictions. You can move your money in and out of Panama as often as you want to. Plus, the Panama banks are able to hold your money in any major currency.
- International Banking. Panama has the second largest international banking center in the world. (Switzerland has the largest.)
- Few Frivolous Lawsuits. The U.S. has the largest number of law suits per capita, which means that businesses have to plan for lawsuit insurance, attorneys, and frivolous lawsuits. In fact, 9 out of every 10 lawsuits filed in the world are filed in the U.S. (Other lawsuit-happy countries are the UK, Canada, Australia and New Zealand.) This is not the case in Panama, whose laws make it difficult to sue. If someone were to sue your Panama corporation, they would have to post a court bond of 20-30% of the value of the claim. They would then have to file a brief justifying the law suit. If the brief doesn’t prove to the judge that there is a reason to sue, the lawsuit won’t be allowed to proceed. If the lawsuit does move forward but the person suing loses, then they lose the 20%-30% court bond. OUCH! No wonder there are so few frivolous lawsuits in Panama.
- Tax Free Zones. Panama has the world’s second largest tax free zone. (Hong Kong has the largest.)
- Strategic Location. You already know that Panama is located in the center of the Americas and is home to the Panama Canal, a major thoroughfare for commerce. You also know that Panama is easy to access from most Western cities and is on the same time zone as either Dallas or New York, depending on the time of year. But what you may not know is how easy Panama is to navigate. This is where a firsthand reconnaissance trip comes in handy. Wait until you see how strategic Panama is to your business.
- Foreigner Friendly. There are no laws restricting foreigners from owning businesses in Panama. Plus, all shareholders and directors in a company can be foreigners.
- Inexpensive Business Startup. Starting a new company is fast, easy and inexpensive. Just open a corporation and a business bank account. After that, Panama corporations pay a low annual corporate franchise tax of $300 per year. Once your business is up and running, local labor, commercial rentals, utilities, real estate, and construction costs are all much lower than North America and Europe.
- Corporate Privacy. Panama does not allow “piercing the corporate veil.” Your corporate books are 100% private.
- Limited Liability. If your Panama corporation is sued, the shareholders are not personally liable.
This list just scratches the proverbial surface of how business friendly Panama really is. If you want more information, contact me. I'll create a personalized private tour just for you that includes anything you want to see--including tax free zones and commercial real estate--and facilitate meetings with attorneys or other business entities you might need to meet with. We'll even make sure you have a car and driver.
There is no extra charge for this service. It's all part of the Panama Relocation Concierge personal touch.