If you’ve been thinking about using an offshore account to help you protect your assets, then you’ll need to know the best way to go about setting one up. It’s extremely important to set up your offshore account properly. A single mistake could jeopardize the safety of your private information and assets. It’s always a good idea to seek legal advice from someone within the host country who has experience creating offshore accounts for people from your country of residence.
There are various reasons that people create offshore accounts. The most common often involves protecting their assets from lawsuits. Using an offshore account can also offer tax advantages and increased privacy. If you are wondering whether an offshore account can benefit you, then you’ll need to know why many people choose offshore accounts instead of those located in their home countries.
The Panama Free Trade Zone, also called the Colón Free Trade Zone (CFZ), offers numerous benefits to international and offshore businesses. Panama's Law Number 18 of June 17, 1948 makes the free trade zone an autonomous institution that continues to help organizations succeed by letting them:
- lower their tax and duty burdens
- take advantage of affordable services that promote smart business decisions
- access markets throughout the world easily
- benefit from a stable banking system
Before establishing a business in the Panama Free Trade Zone, it makes sense to learn more about these benefits so you will understand how they apply to your organization.
Many clients frequently ask us which are the best way to establish a company in Panama, using Panama as a center or gateway to export their products to Central America, the Caribbean and Latin America, paying the least amount of taxes for importing and exporting, and thus make the best for their business.
Myth #2: Offshore Corporations and IBCs Are Completely Unregulated
Myth #3: All Offshore Corporations Are in Corrupt Countries
Myth #4: Offshore Corporations Never Pay Taxes
Myth #5: Offshore Corporations and IBCs Are Illegal
Many business owners believe myths that prevent them from starting offshore corporations and IBCs. These mistaken beliefs could cost them more money and prevent them from conducting their businesses freely.
If you've thought about forming an IBC or offshore corporation, you should learn about these common myths. Once you know the truth about these organizations, you might decide that it makes sense for you to move your business to a jurisdiction that helps you meet your goals.
All income generated outside of Panama is tax exempt, no matter if the capital is in name of a Panamanian juridical person or a local bank. Interests from bank accounts are also tax exempt.
Panamanian Corporations are a legal instrument that allows the adequate management of any assets that are destined to the business and fiscal planning of your companies.
Locally, the main advantage of corporations is that the shareholders are excluded from the personal responsibilities in the obligations of the company, maintaining their right to participation of the profits that the business may generate, but their largest advantage is observed in its use for international businesses, since Panama’s fiscal regime turns them in to excellent means for administration, with clear advantages in comparison to other instruments used in the business world.
With the purpose of incrementing the income from taxes, has taken legal measures that directly tax some of the extraterritorial activities of the Panamanian Corporations, pulling away from the territorial principal that has been the ruling base of the Panamanian tax law.
Any legal person that may require the Notice of Operation which is referred to in Law 5 of 2007 is obligated to retain the dividend tax or participation fee of ten percent (10%) of the amounts distributed to its shareholders or partners when they are from a Panamanian source and five percent (5%) when it is income from a foreign source or export operations….”