For those businessmen and investors who are interested in incorporating an offshore corporation there are many destinations to choose from. Of course, not every offshore jurisdiction is subject to the same tax and investment laws governing income derived offshore so it is of tantamount importance that you seek out the professional advice of a licensed attorney prior to making an offshore corporation formation or investment decisions.
One caveat to watch out for in particular when incorporating an offshore corporation is whether the offshore corporation is subject to any restrictions that limit it’s ability to transact business. Unlike many offshore destinations Panama allows IBC’s incorporated in Panama to conduct business with both local companies and offshore companies alike. It is this distinction that makes a Panama corporation stand out from many other popular IBC’s available in competing jurisdictions. In addition, Panama corporations can be formed in named or bearer share format which is another advantage not available in each jurisdiction. A bearer share company formed in Panama by a law firm using nominee directors is virtually anonymous. When transacting business using a Panama corporation, unlike old Swiss numbered accounts, the transactions appear completely normal and credible reducing the risk of it being flagged and investigated.
It is also important to consider the banking situation in the offshore country prior to actually incorporating your company there. It doesn’t make a lot of sense to form a company and then find out the banking situation does not suit you or your companies’ needs. A nice feature of banking in Panama is it is possible to set up a bank account for a bearer share corporation. The bank account transactions will go out in the corporation’s name with only the bank itself knowing who is the account signatory. Panama has rock solid banking privacy laws and will not give up this signatory information without a court order from a Panama court and these are only issued in the case of serious crime.
Another often overlooked point that makes Panama more attractive than it’s Caribbean neighbors is the relative stability of the weather. Earthquakes and hurricanes do not occur with any frequency in Panama despite it’s mountainous terrain. If you have an offshore trading account with a Caribbean bank and you are trying to make a time sensitive trade during a hurricane at best you are going to get unpredictable results. For most investor’s this level of instability is simply untenable. Stable weather and rock solid banking secrecy laws in Panama make it a more predictable and protective place to do business. While many other destinations may have similiar secrecy laws to Panama the enforcement of these laws consistently has been an issue for many of these other tax havens.
It is also worth noting that the strict bank secrecy laws of Panama are enforced equally for both citizens and foreigners alike. No one is above the law and violators are punished with fines and potentially jail time. Panama’s government and banks realize that presenting a united front and consistently enforced set of rules helps the country to attract more investment and keeps the money they have already accrued safely in their bank vaults.
The security driven culture in Panama is what truly sets it apart from other offshore jurisdictions. The laws in many of these other jurisdictions were created with the intention of attracting offshore business. That means that at anytime they may change their laws, either due to external pressure from other nations or simply because they no longer need the revenue. Panama had its appealing laws in place far before it was ever a popular offshore jurisdiction.
When considering forming a corporation offshore Panama stands head and shoulders above other jurisdictions because of it’s privacy and powerful banking secrecy. Registering an anonymous company in Panama is not difficult to do, getting a bank account for the company can be a little more labor intensive but is well worth it considering the enforced banking secrecy protection afforded by law.