The direct experience of an entrepreneur in Panama is the best report to evaluate why it is a good idea. The reasons are many, at least as many as the advantages that the Republic of Panama offers to entrepreneurs from all over the world. Learning about entrepreneurship implies investigating all those social relationships that generate entrepreneurial initiatives in people. Aaron Rodriguez, an expert in the business world, explains why choosing Panama is an ideal strategy, and what is really necessary in order not to fail.
First of all, Panama allows the anonymity of the shareholders. Secondly, the Panamanian government offers everything necessary to open an offshore company, that is, a company that does business outside the territory in which it is registered. At the same time, it enjoys the benefits that reduce or eliminate the tax burden. It moves within a jurisdiction favorable to entrepreneurship both in controls and all the bureaucratic and accounting delays to which many are accustomed in other countries.
Rodriguez has decided to dive deep on to what is important and try to explain why Panama is considered one of the most attractive tax havens for entrepreneurs from all over the world and has really proven to be the ideal place to establish a new business. For almost a century Panama has been considered the best friend of businessmen and one of the largest financial centers in the world.
“If we add to this the relatively low living and labor costs, when we disembark at Tocumen airport, we can be sure that we have made the right decision,” Rodriguez points out. “Many have asked me if it is convenient to start a new business in Panama. First, Panamanian companies are completely tax-exempt. Second, they don't have to file tax returns and financial statements. Third, they have no limits on directors, who can reside everywhere in total anonymity. Should that be enough?”
If there is a tax, it is called the Flat Tax and is a compliance due once a year, starting in the second year of the company's life, and is equal to just over $450. Nothing to worry about, in short. Taking this into account, actually, the answer is enough for many to continue their business tour in the most famous tax haven in the world.
An offshore company offers several advantages, both from the point of view of bureaucratic and legislative obligations, as well as from the tax point of view. Opening an offshore company in Panama costs very little, just over $1,000.
With an offshore company, it is possible to hide assets, accounts, investments and real estate in case it is necessary, for example for a financial seizure or an expensive divorce. It also protects your assets both domestically and internationally, thus avoiding foreclosures and seizures.
“Panama is a country that offers opportunities for all entrepreneurs,” Rodriguez explains. “Fueled by foreign direct investment and its import and export market, Panama is the best choice for companies looking to expand their presence in Latin America, and international companies looking for an offshore location to house their assets and protect their business in uncertain times.”
Panama has grown at an unprecedented pace over the past years. From 2013 to 2018, GDP per capita increased from $11,841 to $15,090, and its GDP nationwide increased by a third, from $45.6 billion to $61.8 billion. The country, on average, is growing at more than 5% annually and several new infrastructure projects, such as the additional Panama Canal bridge and the Colon Urban Regeneration scheme, are boosting the economy and encourage foreign direct investment (FDI).
At a time when business leaders have to fight through a bureaucratic treadmill to launch their startups, it is good to know that there is at least one country where it is easy to incorporate a company and start a new international experience. Panama is unique in that it makes it possible to register a business in about two weeks and there is no need to physically be in the country during or after the incorporation process. In fact, several high-profile entrepreneurs have never visited the country, but have managed to build successful businesses worldwide and record hundreds of millions of dollars in profits.
With so many Latin American startups placing the territory on the world stage, this is a great time to start a new venture in Panama. Thanks to its growing tourism sector, endless real estate projects, increasing agricultural exports and an impressive banking and financial sector, there are several key industries to consider when expanding to Panama.
About Aaron Rodriguez
Aaron Rodriguez is an expert eCommerce consultant in Latin America. He helps businesses throughout the region optimize all of their eCommerce operations to increase sales and retain customers, and also has extensive experience in the development of strategic and external alliances to promote departmental and organizational objectives. He has traveled extensively throughout Latin America to assist a number of companies and, when he's not traveling, he dedicates all of his available time to his wife and children.
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