Panama – The perfect place for your hightech/software company (5)

Why Panama – Immigration and IRS

These are the 2 issues non-US citizens should be most concerned about when considering The Valley as their business location. Seriously.

First, getting a green card or visa or citizenship really means some effort and is time-consuming. This why even cruise ships are considered, out in the North Pacific Ocean, to accommodate workforce and work around the immigration problem.

Once you’ve got your immigration status, you’ll become a US tax resident, even with a non-resident visa under circumstances. The rules are complicated and execution appears to be harsh.

Based on that, US citizens and even visa holders are not welcome in banks around the globe anymore, meaning special non-preferred treatment and extra costs.

With a permanent visa or as US citizen, you’ll never stop reporting to Uncle Sam your world-wide income, every year to come.  Think about it.

 

How does it work in Panama? Tranquilo!

 

007passportphotos

Source: 007passportcopies.com

There are some ways to get a residency in Panama:

  • proof of solvency by investing $300,000 into bank deposit or real estate,
  • Invest even less into reforestation,
  • being a citizen of one of 44 countries, considered in a friendly relationship with Panama, and willing to establish/run a small business.

As long as you are doing business with customers outside of Panama, you don’t have to report anything tax-wise to anybody.

When you employ workforce in Panama or do business within the country, then get established in one of 2 special economic zones. Find out where your business fits in.

Both zones offer favorable immigration and tax arrangements.

For software and other hightech stuff there is the City of Knowledge.

 

laopinionwebhostcompa

Source: laopinion.webhost.com.pa

For logistics, aviation etc. there is Panama Pacifico.

 

prlogorg

Source: prlog.org

Now it’s up to you to take a closer look at these essential issues. Don’t forget: it will influence your personal and business conditions in a significant way. So better be careful.

The FAT CAt is killing your business opportunities – but there is a solution

Even if the headline looks funny, it is not. For decades now, entrepreneurs from all over have gone West, to build their business in the Silicon Valley, in NYC, Boston, Austin or elsewhere. Many still do so.

However, the way how the United States is nowadays treating their citizens or people with a greencard or other form of visa is very disturbing.

All over the world, these persons, once welcomed and respected, are now knocking on closed doors of banks and employers. What a change.

It’s all about FATCA, the Foreign Account Tax Compliance Act – Uncle Sam’s way to make every bank employee in the world an unpaid IRS agent.

When I opened a bank account days ago, here in Panama, there is a mandatory questionnaire to fill out, assuring your bank that you are not a trouble maker with a blue U.S. passport, a green card, a U.S. visa or even having spent more than 182 days in god’s own country. A formula is applied to the number of days spent during the last 3 years, in order to figure out if you are a risk, they may reject or charge more fees.

I am quite sure, right now, there are entrepreneurs out there, thinking about their plans to move business to the U.S., but do not want to end up under such a rigid regime for decades to come.

Here’s my recommendation: Come to Panama.

This blog has some posts describing the business environment and how life is here. Save your business a lot of money and enjoy a tropical lifestyle instead. Settle in a special economic zone and earn foreign income tax-free. Good for your business, right?

An increasing number of global leaders are establishing their regional or global HQ in Panama. What’s good for them is most likely good for your business too.

Try something new. Come to Panama.

Panama – The business environment

Before even thinking about extending the Valley to Panama, there have to be criteria defined and considered. Panama today is already a first class logistics and financial hub:

The famous Panama Canal, extended by another set of locks, doubling capacity in early 2016. (www.pancanal.com)

The Port of Balboa on the Pacific entrance of the canal and Port of Colon on the Atlantic side, and the Pacific Canal Railway, connecting both.

The Colon Free Zone, second largest in the world. (www.colonfreeezone.com)

City of Knowledge, Special Economic Zone, a technology hub, connected to four major communication cables. (www.ciudaddelsaber.org)

Panama Pacifico, Special Economic Zone and quarters for up to population of 60,000. Center of manufacturing and logistics. (www.panamapacifico.com) All these zones offer favourable tax rules for their companies.

Tocumen International Airport, a hub connecting the Americas and the Caribbean, and direct flights to Amsterdam, Frankfurt, Madrid and Paris.

Panama has more than 50 airports and airstrips, a paradise for private pilots.

Financial industry: Panama’s currency is named Balboa, but there are no Balboa bills, only coins. Balboa means US Dollar. The country has more than 50 banks and none of them crashed during the US financial crisies. Panama is a safe heaven for many foreigners when their countries and currencies go South. Venezuela is a recent example.

Investment opportunities. Taking a look at the capitol, the beaches and islands, there is no question about investment opportunities. Real estate prices are still a bargain compared with the U.S. or Europe. How about oceanfront appartments at $2,000 per m²?

Establishing a corporation. Panama is famous for having the majority of vessels under their flag. And there are numerous foundations and holding companies. Easy to set up and maintain. Same for operational businesses.

Taxes. Foreign income is generally excempted from tax. So imagine the average Google employee, not a U.S. citizen, living in Panama, paid by the mother company – legally no income tax. And VAT is 7% only.

Conclusion: Panama has an outstanding and inviting business environment.