3 September 2018316

The tax residence of Panama is a real way to save your capital on tax deductions.

The real way to save and save your earned capital is to get a tax residence in Panama. Becoming a tax resident, a business or an investor will not only discover new opportunities and reliably protect assets, but also be able to work at an international level without paying taxes.

Change the business strategy for self-preservation.

Many wealthy citizens of Russia, Ukraine and CIS countries recently began to think about changing the country of their residence in order to reduce tax pressure on their business. In each country there may be reasons for pushing investors or entrepreneurs to such a step. This is often associated with political and economic problems in the country where the entrepreneur is doing business. The decision to change the tax residency prompts the entry into force of an automatic exchange of tax information between countries, according to OECD standards. Similarly, in the West, large and medium-sized businesses are trying to protect their capital and choose for themselves more comfortable conditions at a time when international financial requirements are toughened.

So, for example, on the eve of the forthcoming exchange of information in 2018, many Russians already in 2017 began to change their Russian taxpayer status to taxpayers in Cyprus, Malta, Panama, Monaco, Israel and the United Kingdom. Despite the fact that about 40% of wealthy Russian citizens still filed tax returns and reported having their foreign accounts, the remaining 60% did not particularly believe in the tax amnesty and the Russian de-Fisherization policy. Most wealthy Russian citizens do not trust the authorities and do not want to return assets to the country, and intend to change their tax residency.

Of course, not every country can approach a business that wants to protect assets and reduce tax pressure. In order to make the right choice of a country for tax residency, it is necessary to take into account factors such as the existence of a treaty to avoid double taxation with your state, the absence of a CEC law in the new country or to choose jurisdiction with low or territorial taxation. Naturally, one must take into account both the structure of its assets, the type of business, and also take into account the factor that a new country will meet your family interests. Based on these important indicators, we offer business and investor to become a tax resident of Panama.

Why choose Panama?

First, Panama is a country that welcomes foreign business and in every way promotes attracting foreign capital to the state. The first thing Panama offers to an alien is a reduction in tax costs, since taxation in the country is based on a territorial system. Among other things, the state does not levy tax on dividends of foreign origin, donations and inheritances. This means that the tax is levied on only those incomes that are received as a result of activities within the state. If you are a business in the international market and form your income outside of Panama, your income tax will be 0%.

Secondly, Panamanian legislation strictly protects private and commercial interests of foreigners who have equal rights with citizens of Panama. Confidentiality and privacy, observance of corporate and banking secrets are the main criteria governing the law of the country. An encroachment on these values may entail the imposition of a large fine and a prison term for the offender.

Third, the economy of Panama has a growing trend for many years. There is an opinion of different economists who say that Panama follows the development of Singapore, which today belongs to the richest countries in the world.

Fourthly, Panama in its economy officially uses the American dollar. At the same time, the state has its own national currency "Balboa", which is used as a small changeable money symbol. Its rate is not regulated by the state and is consistently equated 1: 1 against the US dollar. For investors and businesses that have assets in dollars and make financial transactions in US currency, this fact is very attractive, since there is no risk of losing funds at the exchange rate.

Fifth, the Republic of Panama conducts a policy of market economy and freedom of capital, therefore foreign investors do not face restrictions when entering capital into the country, and can also be calm that they will easily lead them to any country.

Sixthly, Panama is the most famous banking center in Latin America, represented by almost 100 international banks. Panama's banks are powerful financial institutions, the capitalization of which even surpasses many European banks and banks in America.

With regard to the organization and conduct of business in the country, in Panama there is no law of the CEC, which regulates the offshore sphere, and it is also necessary to identify other important points:

  • A legal entity in Panama, a trust or a Private Fund can be registered for several days and it is not necessary to be present in the country for this.

  • In order for the Panamanian corporation to be free to engage in international activities, it is not necessary to obtain additional permits or licenses. Timely payment of an annual franchise by a foreigner in the amount of $ 300 means permission to conduct all types of international business that do not contradict the law of Panama.

  • The annual maintenance of the Panamanian corporation is many times cheaper than in many other offshore jurisdictions.

  • Panama to foreigners offers simple and understandable rules for obtaining residency. The state, in order to attract foreign capital to the country, has created more than 10 types of visa programs, among which the program granting the right to obtain the citizenship of Panama.

One can still enumerate many advantages of Panama and benefits for foreign business, but it is also necessary to highlight the main characteristics of the country that encourage foreigners to move to Panama for permanent or temporary residence.

Climatic conditions.

Given the proximity to the Equator, Panama has a subtropical humid climate. This indicates that this is a country where the warm summer weather is throughout the year. In addition, Panama is located between the Atlantic and Pacific oceans at the junction of the two American continents. Including Panama is known for the presence of a large number of beaches and islands. The peculiarity and difference of Panama's climate from other tropical countries is the absence of destructive cataclysms in Panama, such as tornadoes or tsunamis.

It is characteristic that Panama is the only state on the planet where, with an interval of at most 2 hours a person can visit the coasts of the Pacific and Atlantic Ocean during one day. All Panamanian beaches are sites with white or gray sand (volcanic origin), which are surrounded in the majority by its untouched flora and fauna. In the last few years, the development of tourism has intensified in the country, and investments in the tourism industry have increased. As a result, Panama began to accept more tourists than neighboring Costa Rica, which has long been known as a comfortable resting place among Americans, Canadians and Europeans.

Level of infrastructure and accommodation.

By its size, Panama is a small country, according to the 2013 census, the population is 3,661,868 people, and according to UN experts, the number of people living in the country already exceeds 4 million. If you divide all this amount, then the population density is about 55 people per 1 square. km. Nevertheless, it must be said that almost half of the country's population is concentrated in the capital of Panama City and in nearby settlements. That is, the capital and its environs are the most developed central part of Panama, which is the main base point for commercial and financial activity of the whole country.

Of course Panama is the country where the famous Panama Canal is located, thanks to which the ships cut their way, following from Asia to America. On this, Panama earns and the channel brings most of the revenues to the budget. In recent years, new roads and transport interchanges have been built in Panama City. Since 2014, launched the first line of the city's metro, the first metro in Latin America. The main international airport "Tokumen" was reconstructed, which daily serves more than 30 direct flights to major cities of the world.

In Panama, over the last 10 years, many objects of urban economic infrastructure, residential and commercial real estate have been built, and the construction of the 2nd subway line has been started. On the quality of education and medical care, Panama is in the first position in Latin America. More than a third of Panama's doctors and teachers were educated in the United States. Many foreigners come to the country for education and medical services, the cost of which is lower than in the US and many European countries.

The city bus fleet of the capital, which previously consisted of old school buses, was completely replaced by comfortable modern transport. Practically throughout the territory of Panama, access to broadband high-speed Internet is provided. The cost of living in Panama is much lower than the US or Canada. In terms of security, Panama is considered the safest place among the countries of Latin America, even safer than many US states.

By the number of high-rise buildings and skyscrapers, Panama in Latin America is also the first and can compare with cities such as New York, Miami or San Francisco. Most of the skyscrapers are buildings of 2010-2012. Real estate in the market of Panama is in great demand among foreigners. Panamanian real estate can satisfy buyers with different levels of prosperity and meets all modern requirements.

How to get a residence in Panama?

In order to obtain the residence of Panama, you need to choose one of the visa programs that best suits you. You can use the following visas:

The visa of "Friendly countries".

This visa program can be used by foreigners who have a passport of one of the 50 countries that have long-standing economic and political ties with Panama. This type of visa can be considered the least expensive to obtain a permanent residence in Panama.

In the event that a family from Russia, Ukraine or other countries of the former Union considers this visa, one of the spouses, who will be considered the main applicant for residence, must have a second passport of one of the countries listed in the program. If applicants for permanent residence in Panama do not have such a second passport, they will not be able to use this visa. In this case, you need to use a different visa.

For those who intend to use the "Visa of Friendly Countries" on the conditions of registration of the Panamanian corporation, and not on the basis of a work permit, it is necessary to say about some nuances. Since the creation of a corporation is one of the reasons for obtaining residency in Panama, your name should be listed among the directors of the company and that's why.

This concerns the issue if you want to open a corporate account for this company in one of the banks of Panama. Corporate Panamanian legislation, in turn, does not require publicly register the names of the founders and shareholders of the company, but obliges them to register the names of appointed directors in the state register. At the same time, the law permits the use of a nominal service when appointing directors of a company, if the beneficiary wants to secure anonymity.

You should be aware that due to the tightening of international "transparency" rules, most of the country's banks open a bank account for companies only if the directors of the company are residents of Panama. It is worth saying that keeping money in Panama banks is many times safer than banks in Europe. Also, banks in Panama offer higher interest rates on time deposits and can provide larger loans.

Therefore, the procedure for opening a corporate bank account is better to approach after you finally get a residence permit in Panama. After that, when submitting documents for opening an account for the company, you will appear as a resident of the country. According to the legislation of Panama, once you register a company in the country, you already become a tax resident of Panama.

Investor's Visa.

The investor's visa, which the government of Panama offers, is also based on the fact that a foreigner must prove his economic viability to the authorities. This program provides three methods of investment, where the main requirement is to invest a minimum amount of $ 300,000 USD. After a five-year tenure as a permanent resident, the resident can begin the process of naturalization and apply for citizenship. At the same time, it should be noted that the migration service administration will not automatically grant citizenship. This can be a lengthy process, since in each individual case the administration of the applicant is treated separately and grants citizenship based on the interests of the state.

Advantages of Panama visa programs.

Panama resident visas are among the fastest in comparison with other countries.

In the process of approval of a permit for permanent residence, a temporary residence permit is issued in advance, which is granted within 3 weeks. The final registration procedure ends in 3-4 months.

From applicants for permanent residence, the state does not require compulsory knowledge of the Spanish language or another foreign language. Only in the case of granting the citizenship of Panama from the applicant is required to pass the exam: in the Spanish language, the history of Panama and the geography of the country.

Foreign applicants for the residence of Panama are not limited to age limits.

There are no strict requirements for foreigners when passing a medical commission in Panama. The main thing is that the applicant does not have dangerous infectious diseases (AIDS, etc.). Panamanian doctors will not be strictly treated and make a negative medical opinion if you, for example, have heart or stomach disease.

It is easy to maintain permanent resident status. It is enough to spend several days in Panama for 2 (two) years and the status of a permanent resident is preserved.

The amount of state fees and fees for applicants for permanent residence in Panama is much lower compared to other countries.