Part 1: https://flic.kr/p/2mEKW75
2.1. Tax Incentives
Tax efficiency is a must-have hallmark in every offshore jurisdiction, and Panama is no exception. The country adopts a territorial approach to taxation, only domestic-sourced income will be taxed (at 25% fixed rate post-tax-deduction) regardless of if the entity has Panama residency or not. Note that a business entity’s domiciliation status is only relevant when evaluating its eligibility for withholding tax (WHT).
Businesses that operate within any free zone like the Panama Pacific(Pacifico) Special Economic Area (PSEA) or the Colon Free Zone (CFZ) can enjoy various forms of tax benefits. Each zone has its own approach to promoting trades which, as a result, employs a different set of tax benefits from each other to achieve it.
2.2. Confidentiality & Asset Protection
There exists a concept called the “corporate veil” which is the protective mechanism that Sociedad can provide for its shareholders. Specifically, the personal assets of shareholders are shielded from any litigation and government seizures since the corporation counts as a separate legal entity with the same capacity to take on duties and rights.
Another non-income generating counterpart to the entity type is a PIF (Private Interest Foundation), an equally popular choice for those looking for enhanced asset protection and estate planning with the added benefit of legal circumvention of their home country’s CFC (Controlled Foreign Corporations) law.
Although it doesn’t directly conduct any business activities, it holds the shares of another currently operating business. It also can partake in any financial activities that would serve to bolster the value of its assets, meaning that it can own bank accounts, securities brokerage accounts, and more.
2.3. High Fiscal Strength
Since Panama has a decentralized banking system, i.e, there’s no central bank, no exchange controls are present which means there’s no cap on monetary remittances abroad, including dividends, interests, branch profits and royalties.
The balboa is the state’s official currency used for transactions, pegged at 1:1 to the U.S dollar, further solidifying its fiscal stability from any global financial crises and keeping inflation as low as possible.
Commenti