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Panamanian offshore is the best way to protect assets and guarantee the confidentiality of the owner’s name

Perhaps you have already thought about how to secure your assets? How to properly build a security strategy, taking into account the risks in your country, taking into account the global changes in the requirements for international financial reporting.

If you have not yet taken care of the safety of your hard-earned money, then at any time you risk falling into the powerhouse and being left with nothing. High-tax governments have long been experiencing difficulties in filling the budgets of their countries. They are trying, by all means, to justify to the public the strengthening of tax collection measures. The acceleration of such a tax tightening process was a series of high-profile financial leaks, of which the most powerful were Panama Papers.

The ability to strengthen ways to protect assets

The effectiveness of asset protection depends on the proper construction of an offshore corporate structure. “Tightening the screws” over offshore countries began to be carried out long before the appearance of “Panama Papers” and other facts of information leaks. High-tax countries such as the USA, Great Britain, Australia, Spain, Russia, and many others began to create laws “On Controlled Foreign Companies” (CIC) aimed at receiving taxes from their citizens, received from foreign companies registered in offshore.

These laws are focused on creating open registries of beneficiaries and disclosing information about the assets of citizens of their countries located abroad. These laws state that you cannot open offshore companies and create a legal entity without informing the government authorities in your country. In Europe, such a struggle for financial “transparency” and deoffshorization is led by the OECD organization, which also commits to introducing automatic exchange of tax information into international financial practice.

Do not be afraid of such repressive methods, you need to resist them correctly and in time. Given the current realities of the globalization of world economies and changes in the requirements of international standards, it is necessary to take a more thorough approach to the issues of building asset protection and ensuring their security abroad. 

The role of Panama Papers in the global financial market

The Panama scandal broke out after the publication of corporate data of foreign companies registered in offshore around the world. The so-called declassified materials showed the involvement of well-known political figures and government members from different countries in the ownership of offshore assets. Also, the conduct of dubious financial transactions by officials, being in the public service, caused a loud resonance of the world community.

Many then paid with their posts and said goodbye to the authorities in their countries. As public servants, officials used their position to accumulate funds in offshore accounts. Every country in which democratic laws are in effect prohibits clerks from the government from conducting any business, that is, public service and its capabilities cannot be a means of obtaining personal gain. Such cases speak of corruption and the fact of money laundering, and the legalization of funds in foreign accounts.

Soon the emphasis in subsequent journalistic articles was placed on the detriment of the existence of offshore companies and the use of the offshore business as such. Despite the fact that offshore activity is absolutely legal, rarely did anyone mention legality. The concept of “asset protection” was presented to the public as “the basis of evil,” and began to be put on a par with the concept of “tax evasion”.

The substitution of concepts by many leading media had the goal of setting public opinion against the rich, who do not want to pay taxes and hide their money in offshore areas. The phrases “diversification of assets” and “minimization of tax pressure” are attributed to the wrong criminal stereotype, similar to the negative characters in the scenarios of old Hollywood films. Thus, by promoting false propaganda about asset protection, journalists distort the true notion of safe ways to preserve personal funds and property, justifying high tax rates even in offshore countries.

Panama, being the center of attention of the whole world, in fact does not deserve such an attitude to itself, especially when it is called almost a “hotbed of crime”. Over the years, the country has shown high economic growth, confidently progressing and progressively reforming its laws, adapting them to international standards.

The same declassified documents of the “Panama Papers” rarely mention companies registered in Panama. Compared to other jurisdictions appearing in the media, the total volume of offshore assets in Panama is not even among the top ten leaders of the offshore business. The documents themselves do not constitute any specific facts or arguments of illegal actions, but only indicate the numbers and directions of financial transactions. According to independent experts, the lion’s share of all published documents points to ordinary business operations in the offshore business. But at the same time, the tactics of journalists and the so-called “experts”, is expressed in the “tireless” mention of Panama, which has a potential relationship to complicity with tax deviationists.

The most interesting thing is that in Panama there is not even such an offense as “tax evasion”, which would apply to foreigners. According to Panamanian laws, taxation in the country is based on the principles of “territoriality”. That is, all offshore companies cannot do business inside the country, and the income received by companies outside the state is not taxed in the country. If the company has income in Panama, then it pays all national tax charges. Thus, Panama, applying offshore laws on its territory, every year attracts more and more wealth to its jurisdiction from abroad.

Important legal points Panamanian offshore

The first offshore jurisdictions appeared on the international market more than 70 years ago. The subsequent emergence of new low-tax or tax-free countries is due to the increasing demand for asset protection. Each offshore jurisdiction is interested in attracting foreign capital and implements attractive for investors laws that will protect their assets.

Offshore states are mainly island countries with a small area and population. Such countries do not have powerful natural resources to build a national economy. Basically, government revenues come from the tourism industry and the provision of international financial and registration services against the background of favorable tax laws. Each offshore has its own differences and peculiarities regarding the types of business, taking into account the specifics of its business direction, selects the appropriate jurisdiction.

Panamanian Corporation (Sociedad Anonima)

Corporate offshore structures such as IBC, LLC or LTD make the life of business owners more comfortable. Corporate Law No. 32 has been in force in Panama since 1927. The company in the country is called Sociedad Anonima, which means “Anonymous Company”. The requirement is such that it can be created even by one shareholder, that is, any individual, regardless of nationality or country of citizenship. From the material point of view and from the point of view of the promptness of registering a company, one can say that the cost of registering a corporate structure in Panama is significantly lower than in other jurisdictions. This applies to both the costs of registering a company and the annual costs of its maintenance.

The anonymity of the name of the beneficiary company

Going back a little, I must say that Panama, having experienced the information attack of the Panama Papers, and fulfilling the OECD’s imperative requirements for reforming the law regarding transparency, introduced minor adjustments to the Corporate Law. At the same time, as before, the State Register of Companies in Panama remains open and the requirements for the company during registration are the same. The law does not oblige to register the names of shareholders, only three directors of the company are registered, as well as the secretary and treasurer.

Given that these persons are appointed by the shareholder and the country is allowed to use the services of “nominee directors”, the name of the beneficiary of the company remains anonymous. Not every offshore today can offer such privacy laws as in Panama, and this is one of the important points, working in favor of the owner of the company.

Bank Offshore Account

Panama is a powerful world-class financial center. Banks of Panama are famous not only for their high level of bank secrecy but also for their good capitalization of bank assets. If you keep your funds in the offshore bank of Panama, you get access to the international level and fast, unhindered access to your capital. In the capital, Panama City, there are more than 80 international banks, most of which are world-famous banks.

Panama to open accounts is very strict, it can be said more demanding than in US banks or in EU countries. This can be seen in the list of requirements when submitting documents to the bank. As in most banks in the world, a personal presence in the country is required when opening an account. However, there are some banks that can open an account remotely and our company cooperates with such banks.

In order not to get a refusal to open a bank offshore account in Panama, as in general and in other banks in the world, you need to properly prepare the documents before submitting. Our company Offshore Pro Group will help you with this! If necessary, we can pre-agree and set the date for consultation online.

At the same time, the national currency of Panama is a stable US dollar. Panama does not limit the volume of investments entering the country and does not set limits on the withdrawal of funds abroad. Although a bank account will be directly linked to your name and can be easily tracked, opening a bank account in Panama will protect capital from all legal risks in your country of citizenship.

Banking and corporate secrets

The pressure on offshore countries from the G20 countries and the OECD is strongly focused on the need to introduce automatic exchange of tax information between countries. One of the main directions of such pressure is the achievement of “transparency” by eliminating offshore companies the granting of anonymity to corporate beneficiaries. The position of Panama in this matter is quite rigid and consistent. The laws of Panama do not allow violating the right to privacy or to prove without disclosure of corporate or bank information.

The final decision in declassifying data about the owner of the company or bank account gives the Court of Panama. The law protects the rights of companies and their owners for unauthorized disclosure of corporate or bank secrets. In the event of a lawsuit regarding the disclosure of bank secrecy, the offender faces a punishment of a fine of 50,000 USD or imprisonment for up to six months, including payments for a claim for damages.

At the same time, the law obliges registration Panamanian agents (lawyers), international tax lawyers, and banking institutions to report information about their clients, if there is a court order. This means that an individual has been charged with money laundering, financing terrorism, drug trafficking, or other serious violations of Panamanian laws.

The procedure of judicial proceedings in offshore, and especially in Panama, is quite long. So the duration of the consideration of the case in the court may take more than five years. When it comes to filing claims to the defendant from creditors, the courts most often stand on the side of the defendant. This allows the defendant to prepare well for the trial by hiring qualified Panamanian lawyers. In particular, throughout the entire period of consideration of the case in court, the defendant is guaranteed protection of his assets and confidentiality of information.

As for international relations in this matter, a foreign power wishing to receive information of interest from the government of Panama must be a party to a bilateral government agreement. Regarding the obligations of Panama to automatically exchange information, if there is a need to provide data, the requesting party should also be among the signatory countries of the relevant Convention with the OECD.

For example, Panama has recently refused Greece to provide information relating to the citizens of Greece, which are mentioned in the materials of the “Panamanian papers”. The request is based on the charges of the Greek Prosecutor’s Office regarding specific individuals and companies that are suspected of tax evasion. Information affects the details of the state of bank accounts, in order to determine the actual owners.

The Attorney General of Panama refused to respond to this request. Representatives of the Panamanian prosecutor’s office said that in order to satisfy the request, Panama must receive convincing evidence from the Greek side against the accused. This evidence should indicate the involvement of persons in acts of corruption. Since the request indicated the fact of tax evasion as the reason, the transfer of data was denied on the basis of the absence of this type of offense in Panama. Also, the Panamanian court does not obey the decisions of the courts of other countries. Thus, Panama protects corporations and their owners from far-fetched and unreasonable foreign requests, guided by the national laws of the state.

Changes in the requirements for financial statements of companies

After the “Panama Papers” scandal in Panama last year, the European Union decided to strengthen measures to combat tax evasion, turning its attention to three leading professions in the offshore business. At the beginning of 2017, the European Parliament ordered the specially created PANA Committee to develop plans to prevent the facts of illegal tax schemes. Such popular professions as accountants, bankers and lawyers began to be considered as a potential threat.

From January 1, 2017, Law No. 52 enters into force in Panama, obliging Panamanian corporations to keep accounts and store annual financial reports for five years at the office of their Registration Agent. Previously, offshore Panamanian companies were not supposed to keep, keep and submit reports. In connection with the requirements of the OECD on the “transparency” of financial relations, Panama amends the Law on Corporations.

It should be noted that according to the OECD requirements regarding the rules for the provision of tax information in an automatic mode, the mandatory annual submission of financial reports from legal entities. This applies to all government agencies and enterprises, as well as institutions operating in the country on the basis of a license issued by the state.

If an offshore company is engaged in international business and does not receive a state license to operate in Panama, then the company is not obliged to submit annual financial reports.

At the end of April 2017, the Panama National Assembly approved Law No. 412, which amends the previously valid Law No. 1 “On Trusts”. Panama again, in compliance with FATF requirements, in the fight against terrorism and money laundering, tightens controls and requirements for companies providing asset management and surety services. The reforms of the government of Panama are associated with the adaptation of its legislation to international standards. Thus, the state decided to protect one of its important financial industries, on the other hand, Panama confirmed its international status as a “transparent” and powerful financial center of Latin America.

How to protect assets with offshore schemes?

For someone offshore world, this is a game of hiding and seek from the tax service, but a day comes when this game becomes a reality, with not a very good ending. But there are situations when businessmen become unwitting hostages of offshore schemes, about which they have no idea.

Last summer, at the border crossing at Phoenix Airport, the United States was caught by the secret owner of Legacy Global Markets SA and the owner of two US and Canadian passports — Gregg R. Mulholland. He was detained for suspicion of fraudulent conspiracy and receiving a commission from securities, money laundering through manipulation, on various actions of publicly traded US companies and laundering about 300 million dollars through five offshore companies.

Before the crime was revealed in September 2014, the company successfully operated as an offshore broker and investment manager in Panama and Belize. Mulholland’s fraudulent network included lawyers and broker-dealers who used pseudonyms and sham companies.

The activities and services of our business portal are built solely on providing legal advice, services, and financial products for the development and protection of our clients’ businesses. We exist for many years and work with partners and customers from all over the world, which allows us not only to build a reliable and respectable reputation as a professional service provider but also to offer our customer’s exclusively legal and profitable investment products and ways to protect capital in the offshore world.

However, the market is full of enthusiasts who want to offer you something more than legal structures to protect assets. So, how to find profitable investments without breaking the law? There are simple ways to protect and increase capital, as well as multi-layered schemes that give you the opportunity to intelligently and legally invest.

Build a reliable network

It is a reliable network of partners, regardless of your business activity, that will allow you to find a legal and profitable source of investment. It is important to find someone you can trust. Initially, you will need to try to build your network, but it, like a real asset protection plan, will work for you throughout your life, and it may be inherited by your children and grandchildren.

If you are planning to go offshore, you need a reliable consultant, lawyer, banker, wealth manager, and everyone who understands this issue and can provide proper advice and advice.

How to build the necessary network – there are several options. One of them, you can go to a country or city where you are interested in services and use common contact building techniques, for example, starting with finding a reliable lawyer and building relationships with him.

Another option is to contact a professional service provider. Visit one of the conferences in which our company participates or organizes, and immediately get a solid network of partners. We will not “show a finger” where exactly to invest and what to buy, but we will reveal to you the most profitable options, as well as acquaint you with reliable professionals in this field in different countries of the world that are not associated with offshore fraud. The main advantage of such cooperation, that through one provider, you get maximum access to products and professionals in multiple directions.

The key to successful investment also lies in the self-assessment of opportunities. Do not do everything that others do. Today, many international investment opportunities ranging from luxury real estate in the Caribbean islands to investment companies can help, not only on the issue of investment but also work with your partners internationally by replacing an offshore bank. And all this is a legal opportunity for you and your business.

How to avoid becoming a victim of offshore schemes

 You should not go on the “copy/paste” path, otherwise, you will get bogged down with the same problems who choose mass products. Not everything is expensive that glitters. This is the way to characterize investment products, which are thrown at everything. If you are promised 100% of your investment, do not flatter yourself, such projects do not exist, at least legal or low-risk ones.

Today, someone can earn about 10-12% per year on agriculture, another up to 15% on securities, but most earn much less since there are macroeconomic factors that directly affect most industries. Very often, people give the desired for reality, if only to attract potential investors, it is important to understand this so as not to fall for it.

Create a plan and focus on it

How to avoid becoming a victim of offshore schemes

Focus not only on finding information but also on fulfilling a real plan. Bad investments and illegal schemes often spread through free access, but without real action and the fulfillment of your personal plan to protect and increase capital, you can not achieve any real result or experience in identifying fraud.

If you go offshore in order to “invest in order to get as much money as possible”, then with this approach it is unlikely that you will achieve your goal. As with everything, it is important to have clear goals. For example, if you want to invest in real estate, you need to understand for what purpose and what it will give you. For example, you want to get a second citizenship, or all you need is a clean one to come from the turnover of funds. The answer to these questions will provide a choice of different solutions.

If you understand your goal, this is the first step towards not becoming a victim of offshore fraud. Otherwise, you become easy prey for scammers.