For foreign investors, Panama will provide a Permanent Residence Permit, but beyond that, Panama is a fantastic tax haven, with very low taxes for those doing business in Panama, and zero taxes for companies located in Panama which do business elsewhere in the world. Property taxes are extremely low at only 2.1% for property with a value in excess of US$75000.
Purchasing Roca Milagro will provide you with permanent residence and an offshore company for your business needs. It also secures a very strong foothold in the growing residential property market which is an extremely popular and growing retirement destination due to the relatively low cost of living (can be under US$2000 per month for 2 people).
All of your clients who purchase property automatically get residence status as property owners, as long as they buy a property for at least US$300,000 or more, or they can get a retirement visa as long as they can show a minimum monthly pension or annuity income of at least US$1000 per month per couple.
Panama is regarded as a top place for many global retirees, specifically those from the United States. It has a stable government and a stable economy which is on par with the US Dollar, and the cost of living is half that of the United States, making it extremely appealing for US residents and immigrants from all over the world.
According to Global Property Guide, property sales and construction are going up year on year, while tourism rose by 7.5% to about 2.5 million people in 2017 (Panama Tourism Authority), with European visitors up 8.1%.
Foreigners are able to own property in Panama with the same property rights as Panamanians, and more than 80% of real estate transactions involving foreign buyers are in cash.
House sales rose 7.7% in 2016 and 23.6% in 2017 with a total value of USD 983.1 million.
The World Economic Forum’s Global Competitiveness Report (2017-2018) rates Panama as the second most competitive country in Latin America and the Caribbean. According to the World Bank’s 2017 survey, it now takes only 6 days to open a business in Panama.
Currency & Economy
Technically the official currency is the Balboa; however, in 1941 Panama stopped printing the Balboa in favor of using the American dollar. Panama does still mint coins in the denominations which are the same size and shape of the equivalent American coins. Since the Balboa has had a fixed exchange rate of 1:1 with the US dollar, these Balboa coins are used interchangeably with the US coins.
The World Bank says “Over the past decade, Panama has been one of the fastest growing economies worldwide. Average annual growth was 7.2 percent between 2001 and 2013, more than double the regional average.”
Panama Offshore Benefits and Advantages
1. Advantageous Fiscal Platform for Offshore Business: Non-resident offshore Panamanian Corporations (Panama IBC’s) and Private Interest Foundations do not pay tax on offshore income.
- No income tax of foreign earned income.
- No capital gains tax (except on sales of real estate located in Panama).
- No interest income tax.
- No offshore sales tax.
- No tax on issuance of corporate shares.
- No tax to shareholders.
- No stock sale or transfer tax (except where sale of shares is for transfer of Panama real estate).
- No capital stock tax.
- No offshore property tax (except on real estate located in Panama).
- No estate tax.
- No gift tax.
- No stamp tax.
- No succession tax.
- No inventory tax.
- No municipal tax.
- No state tax.
- No federal tax.
2. Panama offers the most favorable and most flexible incorporation laws available in the world. Private Interest Foundations are also available, and are one of the most widely used estate planning structures in the world today.
- Panama is the registered domicile for over 500,000 corporations & foundations, making it the second most popular jurisdiction to incorporate in the world, next to Hong Kong.
- Panama does not impose any reporting requirements for non-resident offshore Panamanian corporations.
- Panama does not allow “piercing the corporate veil”.
- Panama corporations share certificates can be issued in Nominative or Bearer form (anonymous form of ownership), with or without par value.
- Panama corporations do not require Paid-In Capital, nor is there a time limit in which authorized capital must be fully paid.
- Panama corporation’s directors, officers and shareholders may be of any nationality and resident of any country.
- Neither the directors nor the officers of Panama corporations need to be shareholders.
- Meetings of directors, officers, and shareholders may be held in any country and accounting books may be kept in any country.
- It is not necessary for the interested parties to be present in Panama for the purpose of establishing a corporation.
- Panama offshore corporations conducting business outside of Panama do not require a commercial license for offshore business activities.
3. Panama’s circulating currency is the US Dollar and Panama has no currency exchange controls or currency restrictions so funds can flow in and out of the country freely.
- Panama uses the U.S. dollar as its legal tender (currency), instilling tremendous fiscal and monetary discipline while keeping inflation very low – under two percent for the last 40 years.
- A dollar economy insulates Panama from global economic shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.
- No currency exchange controls. Panama has no restrictions on monetary remittances abroad, including dividends, interests, branch profits and royalties.
- No restrictions on funds flowing in or out of the country in any currency.
4. Panama continues to maintain what we consider to be the most solid banking and corporate book secrecy laws in the world, which are engraved in its’ constitution. It is clear that Panama remains the most secure offshore financial center, where privacy and confidentiality is not only respected, but vigorously protected by constitutional law. Panama has several double taxation treaties, which are beneficial for foreign investment in Panama, however, bank secrecy laws in Panama remain in effect.
- Panama offers the best bank secrecy laws in the world.
- Panama offers the best corporate book secrecy laws in the world.
- There is no such thing as “piercing the corporate veil” in Panama.
- Revealing banking information to third parties is a crime, punishable by prison.
- Panama Corporations offer “Bearer Shares”, allowing shareholders to maintain 100% anonymity and privacy.
- Panama Private Interest Foundations allow for Private Protectorate Documents and Private Letters of Wishes, enabling controllers (Protectors) and beneficiaries of Private Interest Foundations to remain 100% anonymous and private.
5. Panama has what is considered by government analysts to be the most stable government in all of Central or South America.
- Democratic government since 1990. The Government of Panama is headed by the executive branch, which is composed of a president and two vice presidents, democratically elected for a five-year term by direct vote.
- Mireya Moscoso was the Panama’s first female president and led the country at a moment of great historical importance as the Panama Canal began a new era under Panamanian administration. As of this writing (June 2010), the president is businessman Ricardo Martinelli (whose term will end in 2014), and he is a right wing, pro-business advocate, with commitments to make Panama into “the best place to do business in the world”.
- The Panamanian military was abolished by constitutional amendment in 1994, and the government still has a unique security arrangement with the U.S. due to the Neutrality Treaty of the Panama Canal. As a result, the risks of going back to the earlier military regime are virtually non-existent (Source: Euromoney Report/Lehman Brothers, Feb. 26, 1999).
- Stable government with excellent government infrastructure.
- Pro-business government attitude and policy.
- Civil law system.
- Moody’s has issued Panama a sovereign debt ceiling of Ba1 and Standard & Poors has assigned a default-risk rating of BB+.
- Panama is a peaceful country with no military. Unlike many neighboring countries, personal security concerns are limited. Panama has the lowest crime rate in all of Central and South America.
6. Panama’s economy is one of the most stable, prosperous, and most advanced in all of Central and South America.
Panama is home to the second largest international distribution and trade center (free trade zone) in the world next to Hong Kong. Panama’s Colon Free Zone has over 1500 international import/export businesses operating within it, receives more than 250,000 visitors yearly, and generates exports and re-exports valued at more than US$11 billion annually.