Introduction to Panama as an International Offshore Services Center, by INTERTRUST

Panama’s legislation and related regulations are structured in all cases to promote legitimate operations, with the added advantage of uncomplicated and expedient procedures and a tax policy based on the principle of territoriality.

There is a well-developed modern tax structure in Panama, applicable to earnings from operations within the national territory only. Other laws and related regulations are designed for the most part to attract local and foreign investments and to provide international services.

Therefore, Panama is a well-conceived and developed «offshore center» catering to the international community, from a strategic geographical location, for conducting legitimate business, expediently and free from local taxes on offshore operations.

The concept of an international offshore center implies an economic and juridical order, geared to promote manufacturing, commercial, financial and service activities in an expedient and simple manner. This order not only considers special tax legislation, but other legislation as well, including incentives and facilities to attract local and foreign investment in certain specific activities of interest.

One of these activities is providing the appropriate vehicles for conducting offshore operations and all interrelated services required. All this makes Panama one of the leading International Offshore Centers of the world.

Advantages of Panama as an Offshore Center

Here are some features that make Panama an International Offshore Center for the promotion of legitimate business:

  • Strategic geographic location with a democratic government.
  • Favorable legislation towards foreign investments.
  • Excellent communications, as well as air, sea and land transportation facilities.
  • There are excellent locally and internationally trained lawyers as well as major international auditing, consulting and brokerage firms.
  • Stable tax structure. It has never taxed income from sources outside Panama, not even to local residents or citizens. Interests from local bank accounts are also not taxed.
  • Its laws governing corporations, private foundations, trusts, and other entities are liberal. These are organized quickly and cost less to form and maintain than in most other jurisdictions.
  • Consistent observance of confidentiality regulations.
  • The U.S. dollar is the only paper money in circulation and there is no exchange control whatsoever.
  • It is an important international banking center.
  • It operates the biggest Free Zone in the Western Hemisphere.
  • Expedient and economical procedures for ship registration under Panamanian flag.
  • Trust activities are regulated under special legislation, stipulating the requirement of prior licensing for trustees.
  • A stock exchange structured to include international trading activities.
  • Easy and immediate access to internet.
  • Facilities for electronic commerce.