Tag Archives: tax

Panama: The perfect place for your high-tech/software company (2)

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Why Panama – Your business’ bottom line

This is the most important issue for any great owner of a small business.

Let us look at your personal income situation now and assume you’re making $100,000 per year. (http://www.tax-rates.org/California/income-tax)

                                 California                        Panama

Income                    $100,000                         $100,000

Tax                            $32,000                            $0 *  

Subtotal                  $68,000                            $100,000

Condo rent            $36,000                            $18,000                                                                                                                    (www.zillow.com)          2/2 with 130 m²

Cost of living        $30,000                            $15,000  **

Total                       $2,000                              $67,000

Suggestion: This amount of $67,000 re-invested in Panama, buys ⅙ ownership/8 weeks occupancy in a 2/2 oceanview condo 130m², fully equipped and with concierge service.  (www.oceanview42.com)

* Having your company registered in Panama, charging foreign businesses only, there is no obligation to report anything. No tax declaration whatsoever. Call it freedom.  

** The cost of living numbers appear low. However, in our example, the Californian cannot spend more and we assume that cost of living in Panama is roughly half of California.

To grow a small business, having money left over after tax is essential. Working without other people’s money in early stage means independence, keeping control. Selling shares not before the company has some value, means to make more money, just later.

Conclusion: Having a global business based in Panama is best for your business’ bottom line.

 

supermoney

Disclaimer: We are not a financial or tax advisor. Information given is based on public Website information everybody can find. It may change or have already changed. No guarantees. Do your own math and research. (Picture: supermoney.com)

 

 

 

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

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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.

TexMex and CalPan

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TechCrunch yesterday had an interesting article about how “Mexico’s Ressources Fuel The Texas Startup Economy”. Quite impressive.

There is a solid trend to consider Texas’ (and others’) neighbour country before China or India. Mexico appears to become the better place for manufacturing jobs. Labour may still be higher but transport costs and flexibility are superior, compared with Asia. Mexico and Central America will most likely become the new workbench for U.S. companies.

How does Panama fit into the picture?

 

PTY Downtown

 

Well, Panama has no surplus in workforce, nor does it have any track record in manufacturing. Panama is much more of a service than a manufacturing economy. Think of the vessel registrations, the solid financial sector, the offshore business industry. And how multinationals are moving their global or LatAm headquarters and callcenters to this country.

What Mexico is and will become for outsourced manufacturing, this should Panama be for California’s IT and VC firms. Fueling growth and profitability.

Preferrable business, tax and immigration rules, constantly growing economy, US currency, first world infrastructure, very affordable living costs, excellent investment opportunities,  and a tropical lifestyle.

 

Island

 

Think about it.

Panama – The business environment

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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.