Asset Protection Services in Panama

A privacy tax haven jurisdiction is one in which bank secrecy laws and corporate privacy laws are in place and the jurisdiction does not tax offshore derived income or capital gains and there is no inheritance tax.

Asset Protection Planning and Strategy

Asset Protection strategies generally begin with an offshore bank account in a privacy oriented tax haven jurisdiction. To tighten the privacy up one needs to use an anonymous offshore corporation, an offshore trust, and/or an offshore foundation like the Panama Private Interest Foundation.  Otherwise, bank wires will have one's personal name as the sender or receiver, which effectively destroys bank secrecy.

Asset Protection & Bank Secrecy

Setting up the asset protection strategy in a jurisdiction with strong banking secrecy has got to be a cornerstone of the asset protection structure.

Favorable bank secrecy laws generally call for civil penalties and the opportunity for criminal convictions if any bank employee, officer or director divulges any banking information or files, statements etc pertaining to any bank account or the bank account holder.

Strong bank secrecy laws like Panama Bank secrecy Laws also allow the victim whose privacy was violated to file a lawsuit against not only the bank with their deep pockets but also the person(s) responsible for the privacy violation.

With strong measures like this in place, information leaks almost never happen in Panama. Only when ordered by a Panama court will a Panama bank release your information.

This only happens in criminal matters as determined by a Panama court. For example, tax evasion is NOT a crime in Panama and as such your records would not be opened up should someone come snooping.

In the USA, EU most private detectives have little or no trouble getting bank account information for clients. Their methods are highly illegal but we never hear of any of them getting prosecuted.

Be careful of this if you are considering an onshore asset protection plan.  Learn more about banking secrecy laws in Panama.

Piercing Asset Protection Structures

How does the asset protection corporate veil get pierced regarding an offshore bank account? Well a court order to get the information regarding a bank account, a trust, a corporation or a foundation is going to be required.

Such court orders are generally reserved for serious criminal matters like narcotics, terrorism etc. Civil matters from countries outside of the jurisdiction where the bank is would rarely if ever result in the production of a court order for information.

Civil financial enemies would have trouble ascertaining that you had a bank account in another country. If they got into your bank account in your home country and saw a wire transfer to a bank account in a tax haven privacy jurisdiction this would hardly qualify as grounds to get into the bank or corporate records.

The corporation should be an anonymous bearer share corporation and the financial adversary would have no way of connecting you to the ownership of the offshore corporation.

Offshore corporations and foundations have assets and debts separate from those of the person(s) controlling them. This is an offshore jurisdiction not North America.

If your financial enemies had a foreign judgment from another country against you this would not alter the facts. They do not have a judgment against the offshore corporation whose debts and assets are separate from yours.

Another problem the creditor has is that once they file an action in the offshore tax haven the person they are pursuing will know of it and they can just depart with their funds so it is sort of a waste of time and money.

The offshore privacy tax haven knows that once they start letting foreign creditors collect against assets in the banks of their country, their banks will start to lose clients big time.

Asset Protection and Government Pursuit of your Money

If a governmental agency of another country were to try to attach your money protected in an offshore bank account? Well this again is a different matter.

These cases start with a request for information, which is made pursuant to a Mutual Legal Assistance Treaty (MLAT) or through a Tax treaty (TIEA). Embassy officials in your offshore banking jurisdiction will receive a request.

It is a formal procedure requiring the requesting country to state specific reasons for the information, which usually means providing evidence of a criminal prosecution in the requesting country.

Pure tax information requests are based on the specific tax treaty if any in place between the two countries. (Panama for example, has no tax treaties).

Approval of such a request in civil matters (divorce, lawsuits, etc) never takes place because the proceedings go through official government channels in both countries.

Governments simply don't get involved in such matters unless they become a matter of national security. For jurisdictions with tax treaties (not Panama as it has no tax treaties), requests for information are not popular with the offshore tax haven jurisdictions but they will comply some day if the treaty terms are met.

They can challenge the request and ask for more information. The time frame for these treaty requests can be from six months to several years for this type of request to be granted. Sometimes the statue of limitations runs out and the request becomes moot.

The courts in the tax haven jurisdiction would eventually issue an order to produce the bank, corporate records and they would then serve the requested information on the requesting country embassy pursuant to the terms of the treaty.

These tax haven generated court orders are typically for information only. A request to sequester or freeze the funds in the bank is much less common and a much more difficult procedure.

The government in a tax haven jurisdiction will generally not respond to a request from a local government. They would refer them to their national government and told to have them make the request, which is usually not going to be possible.

If a law enforcement official on a national or local level contacts a bank in an offshore tax haven and requests information they will be abruptly cut off with no answer even indicating that you had or did not have an account at that bank.

To do otherwise would be illegal for the bank to do in a bank secret tax haven. If a national or local law enforcement official presented himself or herself at the offshore bank and displayed credentials they would be told to leave the bank and reminded they have no authority in that country.

Asset Protection & Taxes

A good asset protection structure will take into account taxes in the offshore jurisdiction or we should say the lack of taxation on income in the offshore jurisdiction.

We want to use a jurisdiction that has no taxation of income at all or one that does not tax offshore-derived income. This of course eliminates any filing requirements with the country, which the offshore bank is located in.

A good example of such a tax haven jurisdiction is Panama where companies or individuals which do not carry out activities within the Panamanian territory and which do not obtain income from a Panamanian source, are only subject to the payment of a fixed annual tax of US$300.00.

This $300 per annum tax holds true even if you have an office in Panama, a telephone number in Panama, a website in Panama, a personal or corporate bank account in Panama.

Foundations

This is an approach to wrap an additional layer of privacy over the ownership of the corporation. Typically the foundation or trust (a trust is a similar instrument but they have differences) is in one country and the corporation in another country while the bank account is in yet a third country.

This makes it extremely difficult, time consuming and expensive for someone to try to determine ownership and they would probably never sort things out even after spending a small fortune and wasting months or even years of time trying.

We do not recommend going to all this trouble just do everything in Panama since the legal environment is so favorable for asset protection, privacy and security in Panama.

There is really no actual owner of a Panama Foundation that by itself makes things complicated and confusing for your financial enemies. Now when you add in a bearer share corporation, which is practically impossible to determine the ownership of, you have a very secure situation unique to Panama.

The use of a Foundation combined with a S.A. Panama Corporation (bearer share) can be a powerful asset protection strategy; the words bullet proof comes to mind.