Panama and Migration
The Republic of Panama is located at the narrowest point of the Central American Isthmus, which connects the continents of North and South America.
It is just 2.5 hours by air from Miami, FL, USA and located in the same time zone as the U.S. East Coast. Panama is a former Spanish colony in Central America with a mixed population of Creoles, mestizos, European immigrants, Africans, and indigenous Indians.
In 2000, Panama had approximately 2.816 million inhabitants, 700,000 of whom lived in Panama City, with another 300,000 in the immediate suburbs. The urban elite are primarily Creole, mostly of Spanish descent. There are also populations of Spanish, Italian, Greek, and Jewish origins (Benefits of Panama as an Offshore Jurisdiction, 14).The official language is Spanish, but English is used widely in business, especially banking and tourism, and by some people of African descent.
8 out of 10 Panamanians living within the banking sector of Panama City are bi-lingual in English and Spanish. Panama became an autonomous nation because of its function as the custodian of the transisthmus shipping route-the “path between the seas.” It gained independence in 1903 as part of an American-sponsored revolt against Colombia that led to the signing of a treaty granting the United States the right to build the Panama Canal. The economy relies on transit, transhipping, and banking to earn foreign currency. Panama exports coffee, bananas, beef, and tropical hardwoods.
As a major international transhipping centre, all types of the world’s industrial goods pass through Panama, which keeps or imports electronics, automobiles, and a wide variety of luxury goods. Panama also imports petroleum, as it has no oil fields. Panama has been able to acquire stability with proven banking secrecy and privacy protection laws (Catherine 16).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. In addition to that, 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”, these are situated in Hong Kong, Guatemala, Panama, Belize and Nevis. 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. After doing some research, it appears that Panama is home to many of the world’s top companies like the Belize Banking and Belize Corporations, Switzerland, Bahamas, St.
Vincent, Bermuda, Isle of Man and Cayman Islands. Panama’s dollar-based economy offers low inflation and zero foreign exchange jeopardy. Its legal and regulatory regimes are commerce responsive. Its government is steady, democratic, and modification minded and aggressively seeks overseas savings in all sectors, particularly services, tourism and retirement properties. Its banking sector at present comprises of more than 80 foreign banks, offering full banking services through Visa credit cards, Visa debit cards, Internet banking, ATM cards and cheque books (Catherine 5).
The first two banks opened its doors in 1904, one was called the International Bank Corporation is today’s Citibank, part of Citigroup, the main economic corporation in the world and the second one was the Banco Nacional de Panama. The banks of Panama are severely supervised and certified by the Superintendency of Banks (Superintendencia de Bancos de Panama), Panama’s authoritarian influence. At present, Panama is reported to comprise the mainstream upgraded banking scheme in the world.Panama offers a higher quality of living at a lower cost and with less crime than typical Central American destinations, although Panama City is swiftly getting to world pricing. Panama has a wealth of assortment to present whether it is beaches, lakes, mountains or the rural area and prices for valid land purchases with a range of choices for virtually any budget.
According to Panama’s statute, nationals and foreigners are treated equally under the law. Both Panamanian and foreign companies must fulfil the same fundamental requirements to systematize and manage most types of business performance in Panama. There are limitations on foreigners participating in retail trade and practicing certain professions. In practice, however, there are legal ways to conquer these restrictions. Panama has one of the most contemporary and supple business law frameworks in Latin America. Panama is a fascinating and potentially cost-effective authority for licensing agreements and dual ventures as well as custom commercial operations for international companies (Benefits of Panama as an Offshore Jurisdiction 1-2).
Having scheduled all the excellent reasons to invest in Panama, one must be cautious especially when dealing with investment issues. Foreign investors, especially from the US and Canada, regularly drop their lookout in a misleadingly familiar legal environment of Panama, which is based on the Delaware Corporations Law and similar to the Wyoming Limited Liability Company Law, but allows bearer shares and untitled real estate sales. However, Panama has a court and judicial system built around a civil code, rather than the Anglo-American system of dependence upon case law and judicial pattern. Fundamental bureaucratic rights in civil cases are generally comparable to those obtainable in U.S.
civil courts; nevertheless, the system can be incompetent and prone to exploitation. Though the system is recuperating, many in the business community, both Panamanian and foreign, lack self-confidence in the Panamanian legal system as an objective, sovereign arbitrator in lawful or trade disputes, principally when the case involves influential local figures with political influence (Catherine 12-13).It is revealed that in a few cases the manifestation of fraud has been so broadly acknowledged as to comprise conservative wisdom. Negotiation is constantly a better choice at the Centre for Mediation and Arbitration reputable by the Panamanian Chamber of Commerce or at various European or American arbitration centres and magistrates. Since Spanish is the bureaucrat language in Panama, transactional permits are requested in English as translations of the Spanish papers and agreements in Spanish are not signed particularly if the one concerned does not Converse and translate the language. Lawful documents are not appealing reading, but it is a necessity for a thriving investment. The Public Register of Panama provides much lucidity to the company registrations, recordings of mortgages and for transfer of title to properties, nonetheless, it also prone to exploitation by dishonest parties. Just as importantly, Panama has many experienced attorneys and established laws firms; however, the conflicts of interest rules and ethical standards followed by the Panama Bar are not as stringent as those in the US. Hence again, caution must be exercised (Benefits of Panama as an Offshore Jurisdiction, 4-5).
Benefits of Panama as an Offshore Jurisdiction are endless, having selected an offshore jurisdiction as an integral part of establishing an offshore structure or financial account. The jurisdiction chosen by Panama attractive characteristics some of which include, a fully fledged tax haven, Favourable Incorporation Laws whereby the corporate laws of the country should enable you to hold “Bearer Shares”, have directors from any country, inexpensive, and be able to incorporate Private Interest Foundations, Stable Currency With No Currency Restriction Regulations , Strict Privacy Laws , stable government, stable economy, Excellent Banking System, Excellent Communications System, Language Compatibility and Time Zone Compatibility & Close Location whereby the time zone of the country should be such that you can contact your offshore provider or financial institution during your normal domestic business hours & fly to the country quickly if necessary to handle business (Panama Bank Secrecy Laws 2).In addition to the above characteristics, Panama offers the numerous benefits and business advantage. Since Panama is a 100% Tax Haven, Non-resident Panamanian International Business Corporations (IBC’s) and Private Interest Foundations do not pay tax on any of their income, nor do they have any reporting requirements to the Panamanian government. Similarly, Panama offers the most favourable and most flexible incorporation laws available in the world.
Private Interest Foundations are also available, and are one of the most widely used estate planning structures in the world today. The circulating currency is the US Dollar, and Panama has no currency exchange controls or currency restrictions so funds can flow in and out of the country freely. Panama City is home to the second largest international banking centre in the world next to Switzerland. Panama has the most modern and successful international banking centre in Latin America, with more than 150 banks from 35 different countries. Furthermore, Panama’s communications systems and infrastructure are the equivalent of any first world country such as the USA, Canada, or the United Kingdom.
Telephone, fax, internet, and cellular communications are all offered in Panama by the world’s largest communications companies (Benefits of Panama as an Offshore Jurisdiction, 2).Panama continues to maintain what we consider to be the most solid banking and corporate book secrecy laws in the world, which are engraved in its’ constitution. With Britain’s proposed regulation for removal of bank and corporate book secrecy in the UK offshore territories, plus considerable dilution of privacy laws in jurisdictions such as Bahamas, Antigua, and many others, it is clear that Panama remains the most secure offshore financial centre – where privacy and confidentiality is not only respected, but vigorously protected by constitutional law and is also said to be the most stable government in all of Central or South America. Panama is the ideal jurisdiction for international investors and businessmen to operate their offshore corporations, banking, investing, finances, and all other areas of international trade as well as a great place to live and work and invest in real estate. These are the major reasons as to why migration in Panama is a rampant issue. People seek to live in a prosperous, well-developed country where the cost of living is affordable and at the same time one can develop financially, socially and ultimately have an improved standard of life.
