Panama has many tax laws and in place that make the country an excellent jurisdiction for offshore banking and offshore companies. Most of the tax laws that are in place guarantee that the an individual will keep more of their actual gain then they would in another country, since they do not have to pay as many taxes.

Panamas income tax law is one of the most beneficial laws that the country has in place. According to their income tax law, income tax is only withdrawn from money an individual actually earns within Panamanian boundaries.

This is a law that has been in effect and remained unchanged since the Republic of Panamas foundation. Basically, if your corporation only operates from within Panama, and you do not have any merchandise that physically comes through the country, you will not have to pay income tax on your earnings.

For earnings that are incurred within Panamanian borders, income tax is based on a sliding scale that ranges from 7-27%, dependent on the amount of your earnings. If you are a temporary resident of Panama, the personal income tax will only effect money that you earned from a Panamanian source.

There are also laws in effect that help with real estate taxes in Panama. Depending on the real estates net worth, you may be eligible for tax exemptions on the property. Those who have bought or built new homes are eligible for other exemptions on new property, which can last for the duration of up to twenty years.

If you earn rental property in Panama, you will only be taxed on the return of the property, if the returns amount to more than $250,000. Additionally, if you own rental property that is in what the country considers a tourist zone, you can be eligible for an additional tax exemption that can last for up to fifteen years.

Real estate transfer taxes are also quite low in Panama, at a mere 2% of the updated value or the sale price of the property. There is however a capital gains tax that comes into effect with property which will be based on what level you are being assessed for in your income taxes, unless you have owned the property over at least two years.

One of the benefits of Panamanian tax laws, is that there are no taxes allowed on inheritances. Panama has completely abolished the inheritance tax on individuals that are receiving an inheritance from a deceased person. There are however still gift taxes in effect, however the rates of these taxes vary.

A gift tax comes into effect when property is exchanged “inter-vivos” meaning that the benefactor of the property is still alive. The rates of this tax are dependent upon the relationship between the benefactor and beneficiary and how closely they are related.

Panamas tourism investment laws have been a big drawing factor for both large and small business alike. Many of these laws offer long term tax exemptions for companies that open offshore corporate facilities in the Panama jurisdiction.

More Panama Tax Info & Tips:

LowTax.net - Panama Taxes For Corporations
Avoiding Offshore Tax Evasion

Many people that are exploring the world of offshore banks may be interested in doing business with a Panama bank. There are some misconceptions about banking in Panama, so it is important for potential investors to know that banks in Panama have worked hard to clean up their image as a non cooperative tax haven.

The anti-money laundering laws in Panama have been tightened in recent years. The banking system that the new laws and regulations created is one of the most private and competitive of all offshore banks, but the international offshore banking community continues to monitor the banking industry in Panama, so investors know that all rules and laws are followed.

One of the biggest benefits to doing business with a Panama bank is the assurance that your money and your privacy are protected.

At one time, Panama was the home of over 150 offshore banking companies. Since the reforms that were instituted in the mid 1990s, that number dropped to just 80 banks. The banks that survived the reforms have a high level of legal compliance.

They work with the international banking community to report banking activity that may be part of a criminal enterprise, but they still maintain strict confidentiality of all legal account holders. Placing your money in a Panama bank is a legal and safe alternative to domestic banks.

Placing your money in a Panama bank will give you definite tax advantages. While you have to pay taxes in your home country on money before it is deposited in your bank account, it is allowed to grow tax free. All interest in placed back in your Panama bank account is not subject to being taxed. You do not have to live or conduct business in Panama to benefit from the tax advantages and privacy protection that a Panama bank can offer.

No matter what type of offshore bank account you need, there is a Panama bank that can accommodate you. You can open business and personal accounts in addition to setting up special merchant accounts. Even if your money is in a Panama bank, you will still have access to you account using a secure Internet connection.

You can use the Internet to transfer money between accounts and to perform other banking transactions. For even easier account access, many Panama banks offer ATM an debit cards in addition to international checking accounts.

Opening a bank account in Panama requires a minimum deposit that varies according to the bank rules. Some banks also have minimum balance requirements in addition to the minimum deposit rules. If the balance drops below the minimum, some banks will charge hefty fees.

There are many options to choose from if you decide to open an account with a Panama bank. Your choices include incorporating as an IBC or offshore company or opening a personal account. Most banks require that you prove your identity. This proof can be a notarized copy of you passport. You may also need letters of reference from your current financial institution.

Deciding what to do with your money can be a difficult task. You want to make sure you money is safe. You also want to reduce your tax burden, limit financial liability and product your privacy when conducting your financial business. If all of these match your financial priorities, you may be well serve by placing your money in the Panama banking system.

One of the biggest benefits for account holders in the Panama banking system is a reduced tax burden. While you still must pay United States taxes before you transfer money to your bank account, once the money is in the Panama banking system, any interest your money earns is not subject to local taxes. This can offer you significant savings.

If you are in need of estate planning services, many banks in Panama will help you in that area. You may also be eligible for a higher interest rate on your money. Asset protection from future liability is also a major benefit of Panama banking.

Panama banking can also offer you the ultimate in financial privacy. Complete anonymity is possible by taking advantage of Panama banking accounts like IBC accounts and Panama corporations. All of your transactions will be secure and Panama banking officials will never disclose your identity. You can conduct all of your banking business with full confidence that your privacy will be protected.

You don’t have to live in Panama to take advantage of Panama banking. Many Panama banks offer telephone, Internet, fax and email access to your Panama bank account. It is easy to deposit money into your account and to transfer money between accounts. ATM and debit cards are available for most accounts, making it easy to access your accounts from anywhere in the world. Unlike United States banks, most Panama banks don’t have a daily transaction limit,so you have complete access to your money, not matter how much you need to withdraw.

Opening an account in the Panama banking system is easier than you might think. You never have to travel to Panama, although you may wish to. All you need to supply is a notarized copy of your passport. You may also need to supply letters of reference from any current banks where you have accounts. Business partners may also need supply reference letters for you. Once all of your documentation is received, your account will be opened.

The Panama banking system uses the U.S. dollar as the official unit of currency, but other major currencies are accepted, including the Euro and the Canadian dollar. Cash can be deposited into your bank account by transferring funds from one account to another or by wiring money. You can also send a certified bank check to add funds to your Panama bank account.

There are many benefits to having an account with a Panama bank. You are the only one who can decide if the benefits of a reduced tax burden, confidentiality and easy access to your accounts are right for you.

The following is a list of banks that operate in the Republic of Panama. Where possible website contact details have been included for convenience.

Get a Panama bank account or offshore bank account.

Panama Banks - Official Status:

• Banco National de Panama - web
• Caja de Ahorros - web

Panama Banks - General License:

• BAC International Bank, Inc. - web
• Bancafé (Panamá), S.A. - web
• Banco Aliado, S.A. - web
• Banco Azteca (Panamá), S.A. - web
• Banco Bilbao Vizcaya Argentaria (Panamá), S.A. (BBVA) - web
• Banco Cuscatlán de Panamá, S.A. - web
• Banco Delta, S.A. (BMF)
• Banco de Bogotá, S.A. - web
• Banco de Guayaquil (Panamá), S.A.
• Banco del Centro, S.A.
• Banco Pichincha Panamá, S.A.
• Banco General, S.A. - web
• Banco Internacional de Costa Rica, S.A. (BICSA) - web
• Banco Latinoamericano de Exportaciones, S.A. (BLADEX) - web
• Banco Panameño de la Vivienda, S.A. (BANVIVIENDA) - web
• Banco Trasatlántico, S.A. - web
• Banco Universal, S.A. - web
• Banco Uno, S.A. - web
• Banesco Banco Universal, C.A. - web
• Banesco, S.A.
• Bank Leumi Le-Israel, B.M.
• Bank of China Limited
• BNP Paribas Sucursal Panamá - web
• BNP Paribas Private Bank, Sucursal Panamá
• Capital Bank, Inc.
• Citibank, N.A. - web
• Credicorp Bank, S.A. - web
• Global Bank Corporation - web
• HSBC Bank (Panamá), S.A. - web
• Korea Exchange Bank, Ltd. - web
• Mega International Commercial Bank Co. Ltd. - web
• Metrobank, S.A. - web
• MiBanco, S.A. B.M.F - web
• MMG Bank Corporation - web
• Multibank, Inc. - web
• Primer Banco del Istmo, S.A. (BANISTMO) - web
• Produbank (Panamá), S.A. - web
• St. Georges Bank & Company, Inc. - web
• Stanford Bank (Panamá), S.A. - web
• The Bank of Nova Scotia (SCOTIABANK) - web
• Towerbank International, Inc. - web

Panama Banks - International License:

• Atlantic Security Bank - web
• Austrobank Overseas (Panamá), S.A.
• BAC Bank, Inc. - web
• Bancafé (Panamá), S.A.- web
• Banco Agrícola (Panamá), S.A. - web
• Banco Corfivalle (Panamá), S.A.
• Banco de Bogotá, S.A. - web
• Banco de Crédito del Perú - web
• Banco de Crédito Helm Financial Services (Panamá), S.A. - web
• Banco de Finanzas (Internacional), S.A.
• Banco de la Nación Argentina
• Banco de Occidente (Panamá), S.A. - web
• Banco del Centro, S.A.
• Banco del Pacífico (Panamá), S.A. - web
• Banco Internacional Altas Cumbres, S.A.
• Banco Internacional de Costa Rica, S.A. - (BICSA)
• Banco Lafise Panamá S.A.
• Banco Santander (Panamá), S.A. - web
• Bancolombia (Panamá), S.A. - web
• Banex International Bank Corp. - web
• BCT Bank International, S.A. - web
• BHD International Bank (Panamá), S.A.
• Blubank, Ltd. - web
• Banco Colpatria-Red Multibanca Colpatria, S.A., Sucursal Panamá - web
• ES Bank (Panamá), S.A. - web
• FPB International Bank Inc.
• First Central International Bank - web
• GNB Sudameris Bank, S.A. - web
• GTC Bank, Inc. - web
• International Union Bank, S.A. - web
• Natixis
• Popular Bank Ltd., Inc. web
• Scotiabank Perú, S.A. Sucursal Panamá
• TAG Bank, S.A.

Data courtesy of: http://www.superbancos.gob.pa/aspec_igee/bgenerales.asp

Foundations have existed in jurisdictions like Lichtenstein for many years, but they have only been available in Panama since 1995. There are many benefits to setting up a Panama foundation, but first you should know exactly what a panama foundation is.

The Panama foundation offers a combination of the very best benefits from a trust along with the best benefits from a Panama corporation. A Panama foundation can greatly reduce tax liabilities, especially in a country with a Civil Law structure as opposed to a Common Law structure. A can be formed by one, or in some cases more, people or by an entity like a corporation.

The process of forming a Panama foundation is similar to the process of forming a Panama corporation. A Panama foundation has Council Members that are similar in function to a corporation’s directors.

A Panama foundation also has a private protector that is similar in function to that position in a trust. The protector position is not a legal requirement, but it can be beneficial to the Panama foundation.

To charter a Panama foundation you must select a unique name for your foundation. It may be in English or any other language you choose, but you must include the word foundation in the foundation title.

You should also have at least $10,000 as the initial patrimony that will be used to fund your new Panama foundation. You don’t have to have the money as part of the initial set up of your Panama foundation. You can deposit the money after the foundation is set up.

You should also keep in ind that the names and addresses of the council members of your Panama foundation are part of the public record, just like the directors in a Panama corporation.

You should also make sure that your foundation has a legal purpose for its creation. You can set up the foundation to benefit your children or pay for their college expenses or for your own retirement maintenance. These are not the only reasons to form a Panama foundation, but are merely examples.

You should also have beneficiaries listed as part of your initial Panama foundation paperwork. You should also document how you want your assets distributed in the case of your death or the dissolution of your Panama foundation.

You may choose any country as your foundation’s domicile, but you should make sure that your foundation domicile is located in a country that follows a civil law code, like Panama. You should also limit the lifespan of your Panama foundation if you so choose.

Only you can decide if you want to found your own Panama foundation. A Panama foundation can’t engage in any business transactions like a Panama corporation, but it can own shares of a corporation that is engaged in business practices. You may also engage in any type of activity that will increase the foundation assets but not for profit.

The founder of a Panama foundation does not technically own the foundation, a person cannot own a Panama foundation.

Recommended Vendors:

OffshoreLegal.org - Panama Private Interest Foundations

Tax laws when outside of your “homeland” can be very intimidating, well let’s be honest; they can be intimidating even in your ”homeland”. While it seems the tax laws are on a virtual Ferris wheel due to the influx of tourism and investment in recent years in Panama it should not be intimidating. Panama is very encouraging and welcoming when it comes to foreign investment and the taxes are fairly easy to understand when broken down.

Exemption

There are two laws in Panama , which allow for property tax exemption, Article 764 and Law 8. We will start with the lesser known of the two.

Article 764

This law states two exemptions:

• Land with a registered value of less than $30,000,00(thirty thousand)
• Land used exclusively in agriculture and duly registered with the appropriate authority, in this case MIDA, (Ministry of Agriculture and Development) for under $150,000.00

Law 8- Tourism Law

If you have decided to buy into a new construction project already approved for a “tourist Project”, and/or a project that was built under the approval of Law 8 and built with in the last 20 years, you can be exempt from property taxes for a maximum of 20 years depending on the registered value of the unit purchased.

Panama is a staggeringly beautiful country and being thus, it is quite possible to fall in love with a property that has neither a value of under $30,000.00 or is a gorgeous “older” home in the Canal Zone not qualifying for exemptions. In this case;

As long as the property has been duly registered after 2005 and a licensed Panamanian appraiser has sworn the value the taxes are as follows:

• $30,001.00 - $50,000.00 @ 0.7%
• $50,001.00 - $75,000.00 @ 0.9%
• Over $75,001.00 @ 1%

*Remember the first $30,000.00 is exempt from property tax so if the registered value is $200,000.00 you will pay $1700.00 in taxes per year.

There is one catch in all these laws, however, if you are not caught up in paying your taxes and not current on the registered value you could be levied up to 2.1% of the determined value. This could apply to properties, which have been in families for a long time, and the value has never been updated in the Public Registry, in which case it would be recommended to pay the cost to update to save the levied yearly taxes in the long run.

Taxes can be paid in three installments, April 30 th , August 31 st , and December 31 st .

When selling a property there is a 2% transfer tax that must be paid immediately at the time and registration of sale. (The Public Registry or Catastro usually calculates this)

If you choose to pay the 10% sales tax when selling property at the time of purchase you will no longer be accountable for any additional capital gains tax you may receive with regards to the added value of the property at the time of sale.

So as you can see the Panamanian Tax Law with regards to property is pretty straightforward. It is always recommended to contact a licensed Panamanian attorney adept in tax law prior to purchasing land to be sure of which category your purchase will fall in.

DiscoverPanama.org has replaced the default search engine included with the Wordpress software with a custom search engine from Google. This search engine will search all pages and posts on this website that have been indexed by Google.

The search form appears in the right column on each page of the website. Since our site is brand new and not much of our content has been indexed by Google there will be very few searches that yield results at this time. As we continue to grow and add documents the website the search should become more fruitful.

We have added a document outlining all international carriers with service to and from Panama City via Tocumen Airport. Shortly we will be adding the domestic carriers to this list.

You can view this list by clicking the link below:

• Panama International and Domestic Airline Service

A short bio about the website author has been added along with the site’s mission statement.

Please view it by clicking the following link:

• About DiscoverPanama.org

A weather widget displaying the basic climate conditions for Panama City and surrounding area has been added to the sidebar.

We are still playing around with the display options and placement, but the widget has been stable so at this stage it appears that we will be keeping it.