Panama Offshore Legal - Offshore Asset Protection Services

There are a number of factors one must look for when setting up a secure asset protection structure. The tax-free status of the jurisdiction being used is always a major consideration. The anonymity of the corporations and foundations is also important.

But the most important consideration in today's world of reciprocal agreements and dissolving economic borders is an understanding of exactly what protections each jurisdiction offers – or more to the point, to what degree those protections hold. Only by understanding the benefits and limitations of each jurisdiction, and how to make them work together, is a truly viable strategy for asset protection possible.

Many traditional tax havens have recently bowed to international pressure to reveal what was once securely confidential information about bank accounts and account holders. Switzerland, once the most well-known jurisdiction in the world for its strict banking secrecy, finally ceded to international pressure to reveal information about thousands of its offshore accounts linked with suspected tax evasion. Lichtenstein, Monaco and the Cayman Islands are further examples of offshore giants that have fallen afoul of the economic sanctions threatened by resisting requests for information. While new agreements are being continually brokered to reach acceptable compromises between trading partners, the fact remains that there is no longer such a thing as a single truly "safe haven".

Diversification is Key to a Strong Asset Protection Strategy

Diversification is a principle that holds true in nearly every other financial management scenario, and it holds especially true here. Because of the interconnectedness of the global economy, no one country is able to provide all the elements of a secure offshore banking strategy. Virtually all jurisdictions are now taking part in one or more treaties with other countries to share information.

Don't make the mistake of using single jurisdictions that used to be good but in recent years have been forced to compromise their secrecy and privacy. Click here to read more about asset protection

Only through a complex strategy that involves multiple jurisdictions can one find all the elements of asset protection and tax minimization that make offshore banking such a valuable financial tool. 

Panama can play an important part in such a strategy, thanks to favorable taxation laws and useful instruments such as the foundation and bearer share corporation.  Depending on our client’s particular portfolio and desired outcomes, other jurisdictions such as Guatemala, Nevis, Belize, Hong Kong and others can form part of a sound multi-jurisdiction strategy.

Offshore Company Incorporation, Offshore Corporations

Today there are a multitude of offshore jurisdictions touting themselves as the best tax haven in which to domicile a corporation (also known as an IBC, or international bank company). Some of the criteria one needs to look for when selecting offshore jurisdictions are the following:

There should be no taxation on offshore-derived income (Panama is an excellent example of this). There should be strong bank secrecy (meaning information can only be released for the most compelling reasons, reasons that our strategies are designed to preempt). Another very useful tool is the bearer share corporation with the shares made out in blank and the possibility of keeping the shares anywhere in the world.

The selected jurisdictions must be stable and secure, and must be free of or have minimal tax treaties. A lot of jurisdictions that were once good have in recent years gone bad – Click here to read more about offshore corporations

Offshore Foundations, Private Interest Foundations

In today’s world the wealthy people use offshore corporations and the extremely wealthy use offshore private interest foundations.  Foundations are the most secure asset protection tools in the free world today.  No one owns a foundation but the foundation can own things like real estate, cars, boats, stocks, corporation etc.

A foundation is like a blend of a will, a trust, and a corporation. When selecting an offshore jurisdiction for your foundation one must take into account the following: freedom from taxes including inheritance taxation, anonymity of the foundation, ease of passing assets to beneficiaries, ease of operation and reasonable cost.

Lichtenstein used to be the world leader for foundations but then along cam e the EU with all the information sharing agreements and tax agreements. However other jurisdictions such as Panama also offer foundations that can be combined with other instruments – often from multiple jurisdictions – to create a viable asset protection and tax minimization structure. Click here to read more about offshore foundations

Offshore Banking, Offshore Bank Accounts

Since the offshore bank account is a key component of any asset protection structure we must be diligent to make sure your assets are secured in a solid bank in one or more stable jurisdictions. There should be tight bank secrecy laws that incorporate serious penalties like prison, fines and the ability for you to sue the bank for any violations.

Banks have deep pockets and do not want to be sued so they will be diligent to comply with bank secrecy under those terms and conditions. Our part is to set up the account in such a way as to provide no cause for the banks to be forced to yield information under any tax information exchange treaties (TIEAs) or any other agreements between economic partners. Once your account complies with the required regulations, the bank's ability to protect your confidentiality is iron-clad.

Guatemala is one of our recommended banking jurisdictions as it offers strong banking secrecy, stable banks with billions in assets and no information exchange agreements of any kind, with any country. It is one of the few jurisdictions in the world that can currently make that claim.

It's important to recognize that without the proper set-up, no account is guaranteed 100% privacy in any jurisdiction for the long term. By planning carefully at the outset and adopting a multiple jurisdiction strategy, the privacy of your offshore account will remain intact regardless of pressure from outside countries, the OECD or internal political changes.

Other considerations when choosing an offshore banking location are just common sense.

The jurisdiction should not be a Caribbean Island since they are subject to hurricanes and this could mean a loss of communication between you and your bank at a critical time when you need to access your funds.

The banks should have people that communicate with you in a language you can understand.

There should be a good online banking platform available for your use, which allows for the launching of international wire transfers. You should be able to get some sort of a Visa or ATM card that allows you to access ATM machines worldwide.

Click here to read more about offshore banking

Not all Offshore Banks are Created Equal 

The availability of quality banks covered by bank secrecy laws with online banking is of paramount importance. In particular, an offshore bank must provide the ability to send and receive wires through the online banking interface. Shockingly, many banks fail this test. Banka (name changed for legal reasons), a large bank here in Panama is a perfect example. Banka is a great bank from almost every other viewpoint. They offer online banking, but many customers may be disappointed to learn they are unable to send international bank wires via online banking. In fact, Banka requires that the client sign a form and Fedex it into the bank each time they want to send a bank wire. Although Banka is a great bank overall it is undesirable as an offshore bank. The banks we offer our clients have excellent online banking with full wire capabilities.

Beware Offshore Corporation Mills - Deal with a Law Firm only 

Attorney client privilege is something that should never be taken lightly. Always deal with a law firm.  The offshore banking world is full of fly-by-night operators, who offer bad products and register their client's corporations incorrectly.  Recently a customer of one of these "offshore mills" came to us to get a bank account.  When we looked up their corporation in the public registry, we were shocked to find the client's name was right there in full public view.  This is a very serious issue.  Don't trust a "corporation mill" to create your offshore corporation.  They might sound slick, but their quality of work is poor and they don't have a law license to lose.  Don't be fooled when they tell you they have lawyers on staff.  This is NOT the same thing as a law firm!  You are not protected by attorney client privilege, no matter what they tell you.  If they don't say "Law Firm" on their website there is a reason.  They are not not a law firm and are hoping you don't know the difference.

Many readers inquire each week about which jurisdictions we recommend.  Of course this depends on your specific situation. Having said that here is my analysis of some of the more prominent jurisdictions to choose from::

Guatemala: Banking Secrecy and Anonymity

Guatemala is a very strong jurisdiction for a number of reasons, and can play a role in almost any asset protection plan. The absence of any mutual tax or assistance treaties of any kind make Guatemala answerable to no one beyond its borders, allowing sovereign banking privacy laws to remain intact - and Guatemala's banking privacy laws are tight. There are also no currency controls, and no offshore taxation (that is, a business that is incorporated in Guatemala and conducts its business exclusively outside Guatemala is not required to pay taxes).

Guatemala also offers bearer share corporations in the form of "Sociedad Anonima" (S.A.), literally "Anonymous Society". This is an invaluable instrument in asset protection, wealth management, tax minimization and estate planning strategies. Combined with other instruments and other jurisdictions, Guatemala offers excellent offshore business benefits, particularly when it comes to privacy protection.

Guatemala Offshore Jurisdiction | Guatemala Anonymous Corporation | Guatemala Banking

Belize: Promising, Though Small and Relatively New in the Offshore Banking World

With only 5 banks managing 164 million US, Belize is a small offshore jurisdiction- in contrast Panama has 150 banks. It is also a relatively new jurisdiction, as the first "offshore" bank in Belize was only licensed in 1998.

That said, Belize has several points in its favor: strong banking secrecy, no currency controls, multiple currencies to choose from and the all-important convenience of having English as its official language. Belize does not tax offshore income, and there is no capital gains tax onshore. Also, the Belize trust is a very useful instrument if used correctly, particularly when it comes to asset protection. As such, Belize can play an important part of an overall wealth management strategy.

Belize Banking | Belize Trust

Nevis

Nevis is an interesting jurisdiction for a number of reasons. First, though it charges corporate income taxes, there are no personal income taxes levied, nor any capital gains, wealth, gift or inheritance taxes taxes to worry about. Offshore income is also not taxable in Nevis. But by far the most interesting part Nevis can play in asset protection is through the Nevis LLC, or Limited Liability Company. It's something of a hybrid between a corporation and a limited partnership, and it combines the benefits of both structures: privacy and asset protection.

However Nevis does have Tax Information Exchange Treaties in place, which makes it less suitable for citizens from those countries. We can suggest alternatives for any scenario.

Nevis Anonymous LLC

Panama: Stability with Proven Banking Secrecy and Privacy Protection Laws

Stability of Panama

Panama is the most stable jurisdiction offering banking secrecy.  Countries like the United States and China have a vested interest in Panama's stability because of the Panama Canal.  The stability of the operation of the Panama Canal is critical to world trade and the economic health of the many countries including the US.  The United States looks the other way with respect to Panama's thriving anonymous banking business, in an effort to keep the peace.

Anonymous Companies in Panama 

Panama has bearer share corporations, which are specifically designed to be anonymous.  In fact, in Spanish they are called, "Sociedad Anonima" which means "Anonymous Company".  Panama banks have no problem opening bank accounts for these types of companies because they are an accepted norm in Panama.  In fact, the most common corporation suffix is not "Inc." or "Corp." like in the rest of the world, but rather "S.A." which is the short form for "Sociedad Anonima".  Panama is a gold mine for those seeking corporate and banking secrecy.

Panama is the choice of many fortune 500 companies

After doing some research, it appears that Panama is home to many of the world's top companies.  Here is a list of our raw research on fortune 500 companies incorporated in Panama for your interest.  This list may surprise many of you. 

Panama Company Name Search | Panama Foundation Search | Panama Bank Account

Switzerland: Cooperate with Investigations, No More Numbered Accounts

Switzerland has a reputation that earned it worldwide recognition during the second world war.  Boasting numbered accounts, it quickly became the world leader in offshore banking. 

Unfortunately, due to pressure from the international community (mainly governments like the United States who were losing too many tax dollars) the Swiss gave in. 

They stopped giving out numbered accounts.  Today this jurisdiction regularly co-operates with foreign governments for issues like tax evasion. 

Bahamas: Weak Banking Secrecy Laws with Massive Capital Flight

Banking secrecy in the Bahamas is weak.  In fact, banking institutions are freely permitted to divulge the fact that a particular person or company does in fact have an account with that bank. 

Since the Bahamas introduced their new banking legislation allowing the free flow of information 45% of the deposits have left the Bahamas banks.

Cayman Islands: Rock Solid Banking Laws But Not Always Enforced

The Cayman Islands law seem quite impressive. In fact bank officials that break the secrecy law face imprisonment just as in Panama! 

Unfortunately I have a story to tell you about.  John M. Masterson was the owner of Guardian Bank. 

He provided the IRS with over 1 year worth of bank records !  Thousands of US taxpayers found themselves in a very bad situation. 

Now if the law stipulates jail time for a bank official divulging just one person's banking information, wouldn't you think John would be going to prison for a very long time? 

So did John go to prison?  No he did not!  In fact, as far as we can tell, nothing happened to him.   So the Cayman Islands look good on paper, but in practice I would stay away.