Panama - das Paradies für Steueroptimierer - ideal für Unternehmer

Panama - The paradise for tax optimizers

Geographical position of Panama

Panama is a country in Central America, bordered by the Caribbean Sea to the north and the Pacific Ocean to the south. Panama borders Colombia to the east and Costa Rica to the west. It is known as the land bridge connecting North and South America.

The Panama Canal, an artificial waterway, connects the Atlantic Ocean with the Pacific Ocean and is a prominent geographical as well as engineering feature of the country. Panama’s strategic location made it an important hub for trade and transportation, especially with the opening of the Panama Canal in 1914, a critical link for international shipping.

You can read more about the climate, health care system and school system HERE.

Economic facts and forecasts in Panama

In 2022, the estimated GDP of Panama was approximately US$71.97 billion. This is expected to increase to approximately $77.26 billion in 2023. This data presents Panama’s economic development from 1981 to 2021, with projections into 2028.

From 2023 to 2028, Panama’s GDP is expected to grow steadily by $26.8 billion, or 34.69 percent. It is estimated that the GDP will be around $104.02 billion in 2028.

Gross domestic product, or GDP, is the total value of all goods and services produced within the country’s borders in a year and intended for final consumption. This value is a decisive measure of a state’s economic potency. Nominal GDP incorporates the development of prices and its variation is often interpreted as economic expansion.

Peculiarities of the tax system for foreign entrepreneurs

Territorial tax principle

Panama follows a territorial tax system, which means that only income earned within Panama is taxed. Income from sources outside Panama is tax-exempt. And already this title of the article Panama – The paradise for tax optimizers explains itself.

Company foundation

Offshore companies: Foreign entrepreneurs have the option of establishing offshore companies that do not have to pay taxes on income earned outside Panama.

Free Zones: There are special free trade zones, such as the Colon Free Zone, where companies can enjoy tax benefits.

Taxation of dividends

As a rule, dividends are taxed with a withholding tax of 10%. However, this rate may be lower for companies in free trade zones.

Double taxation agreement

Panama has double taxation treaties with some countries to avoid double taxation of income and to fight tax evasion.

Reporting and compliance

Companies are required to file financial reports and tax returns on a regular basis. Compliance with local tax regulations is critical to avoid penalties.

Foreign entrepreneurs find a favorable tax environment in Panama, especially when doing business outside the country. However, compliance with legal requirements and careful planning are essential.

Offshore companies

An offshore company in Panama, often referred to as a “Sociedad Anónima” (Anonymous Company), is a type of company that is registered in Panama but conducts its business mainly or exclusively outside the country. These companies benefit from a number of tax and regulatory advantages that Panama offers. Here are some characteristic features and aspects of an offshore company in Panama:

Foundation and registration

  1. Foundation documents
  • Memorandum and Articles of Association: Basic documents that define the statutes and structure of the company.
  • Registration: The company must be registered with the “Registro Público” (Public Registry) in Panama.
  1. Shareholders
  • Anonymity: The identities of shareholders can remain private as Panama does not require public disclosure of shareholder information.
  • Shares: The company may issue nominal shares that do not publicly identify the owner.

Operation and management

  1. Board of Directors
  • Composition: The board of directors must consist of at least three directors, who need not necessarily be shareholders.
  • Secretary and Treasurer: these positions may be filled by the Directors or others.
  1. Management
  • Managing Director: It is not required that the managing director or other officers be residents of Panama.
  • Meetings: Board meetings can be held anywhere in the world.

Tax advantages

  1. Territorial tax system
  • Taxation: Income earned outside Panama is exempt from income tax.
  • No double taxation: Panama maintains double taxation treaties with many countries, which reduces the risk of double taxation.
  1. Other tax advantages
  • No dividend tax: No tax is levied on dividends paid from income outside Panama.
  • No capital gains tax: no taxation of capital gains realized outside Panama.

Legal security

  1. Stability
  • Legal security: Panama offers a stable legal and political environment that favors the business climate.
  • Data protection: High standards in the area of data protection and confidentiality.
  1. Compliance und Due Diligence
  • Compliance: Companies must meet certain compliance requirements and due diligence processes to prevent abuse.

Panama Papers and still Panama - The Paradise for Tax Optimizers

The Panama Papers refer to a massive data leak that was made public in April 2016, with confidential documents leaked by Panamanian law firm Mossack Fonseca. This leak revealed extensive information about offshore companies and the people associated with them, including many prominent figures. Here are some key facts about this event:

  1. Origin and scope of the leak
  • Scope of the leak: Over 11.5 million documents, comprising about 2.6 terabytes of data, were exposed by the data leak.
  • Time period: The documents covered information over a period of nearly 40 years, from 1977 to 2016.
  • Disclosure: The documents were leaked by an anonymous whistleblower to the German newspaper “Süddeutsche Zeitung,” which then worked with the International Consortium of Investigative Journalists (ICIJ) to analyze the data.
Panama Papers einfach erklärt
Auswirkungen und Reaktionen auf Panama Papers
  1. Focus on content
  • Offshore companies The documents contained details of more than 214,000 offshore companies registered by the law firm Mossack Fonseca.
  • Celebrities: Many prominent figures, including politicians, celebrities and athletes, were named in the documents, often in connection with offshore accounts and companies.
  • Suspicious Transactions: The Papers revealed a variety of transactions that could be interpreted as potential money laundering or tax evasion.
  1. Effects and reactions
  • Global reaction The revelation led to a worldwide outcry, prompting governments to crack down on tax evasion and money laundering.
  • Resignations and investigations: As a result of the publications, some prominent figures resigned and numerous countries launched investigations.
  • Reforms The data leak led to increased calls for reforms related to offshore financial centers and the need for more transparent regulation of financial transactions.
  1. Criticism and controversy
  • Data protection There was also criticism of the breach of data protection and confidentiality caused by the leak.
  • Legality of offshore companies: While many of the activities described in the documents were legal, they raised questions about the ethicality of offshore financial operations and tax havens.
  1. Epilog
  • Legislative changes: As a result of the scandal, many countries have tightened their laws to combat tax evasion and money laundering.
  • Increased transparency: The publications led to an increased movement for more transparency in the global financial world.

The Panama Papers represented one of the largest revelations regarding offshore finance and tax havens, and had a far-reaching impact on the global discussion about transparency and fairness in the financial system.

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