Panama Corp

Setting up an offshore Panama corp is a great way for companies that primarily operate in countries such as Canada and the United States to save money on taxes. Offshore Panama corps that sell goods and services in the U.S. and Canada still have to pay taxes in their home countries, but they often pay substantially less than companies that have incorporated in Panama.

Panama Corp’s Take the Sting Out of Tax Time

Now that tax time has recently passed, you know how much money you had to spend last year for the privilege of living and doing business in your home country. The United States is well known for spending a lot of public services, defense, and infrastructure. These exceptional services come at a price. Unfortunately for those who do business in the United States, they pick up a substantial portion of the tab for everyone else. Forming a Panama corp, however, can take some of the sting out of tax time.

Is Saving Money with a Panama Corp Legal?

Many businesspersons in Canada and the United States who have heard about saving money through Panama corps worry that doing so is illegal. Those people will be happy to learn that offshore incorporation in Panama is perfectly legal as long as you follow the appropriate steps. When forming an offshore Panama corp, you cannot actually sell services or products in that country. You can, however, offer services and products to customers throughout the rest of the world.

You can also stay on the right side of the law by making sure that you pay all of your home country’s taxes. Note that forming an offshore Panama corp does not completely relieve you of tax responsibilities at home. Many people, however, have found that forming an offshore corp provides a tax incentive that is good enough for them to incorporate in Panama.

Do Offshore Panama Corps Pay Taxes in Panama?

Panama encourages offshore companies to incorporate within its borders by offering extremely low tax rates. A significant portion of Panama’s economy is based on trade, so they want to attract as many businesses as possible. Charging low taxes for companies that do not actually make money within Panama essentially allows them to pick up small amounts of money from a large number of businesses. The amount adds up for Panama’s government, making it possible for them to improve services in their country without overtaxing the offshore companies that choose to incorporate there.

Other Advantages of Forming an Offshore Panama Corp

Low tax rates aren’t the only reasons to form an offshore Panama corp. Panama’s federal laws give companies exceptional privacy rights that make it nearly impossible for other parties to learn about any assets that you or your company have in Panama. This can help you protect your cash and property from litigious individuals who might try to take everyone you have. Panama’s focus on personal and corporate privacy can, therefore, protect you from losing your assets in legal battles with employees, ex-spouses, and customers.