TAX RESIDENCY IN PANAMA
Nowadays, under the influence of Common Reporting Standards (CRS) and FATCA, having a genuine and legally validated tax residency is essential for businessmen, entrepreneurs and indeed all international contractors that derive their income from international sources. Panama is one of the best individual tax residencies available today for the following reasons:
- Panama does not tax worldwide income (it only taxes Panamanian sourced income). This means you can legally have an income of 5000 USD a month from Panama sources (e.g., salary, dividends, rental income, etc.) for which you will pay tax, whilst having millions of dollars in income from overseas, for which you will pay zero tax. This is why many of the world´s wealthiest individuals choose Panama as a tax residency destination.
- Panama is not considered an offshore jurisdiction, this means that international banks in Switzerland, Europe, United States and other countries, accept UBO accounts of Panamanian tax residents with no problem whatsoever.
- Panama residency and tax residency is obtained quickly and with minimal red tape. In fact, if you are from any of the 47 countries that qualify for friendly nation status, you can obtain Panamanian residency and tax residency with no investment at all.
For more information on Friendly Nations Visa click here
- As a Panamanian tax resident all your worldwide income will be reported only to Panama. Panama has strict banking and privacy laws which are considered some of the strongest in the world. Moreover, this country has a very solid legal protection for depositors, meaning that you can safely keep your money in the Panamanian banking system.
- As a Panamanian tax resident you will never have to pay income tax in any other country again. You can show your documentation from Panama to demonstrate your tax residency and be fully exempt under almost all domestic and international laws on personal income tax in any country. The only exception is the United States. However, even in that case, the first 160,000 USD of your income are not taxed by the US, and if you run a Panamanian company you can keep the profits inside the company and not pay tax until you pay yourself. This is called tax deferral and is perfectly legal. This tax deferral is implemented by many of Americ ´s largest corporations.
- As a Panamanian tax resident you can legally transfer your worldwide income to a Panamanian foundation. This way, your income will be protected from all creditors, including foreign governments, under one of the best asset protection regimes around the globe.