How Much Could You Save With an Offshore Company in Panama?

Return to Wealth Safe Blog

Wealth Safe Video

Discuss Your Options

Complete the below form to discuss your options with us.

  • This field is for validation purposes and should be left unchanged.

Could Panama save you thousands in taxes?

First off, if you'd like to watch a video rather than read this long article about offshore companies in Panama, go to this link: https://warrenblack-wealthsafe.wistia.com/medias/n535skaeog

Now I’m going to do something at the start of this blog that other bloggers won’t do. 

I would like to suggest that you don’t read this article.

If you’ve come here wondering about the possibility of operating an offshore company in Panama, it may be a waste of your time to keep reading. 

If you’re a resident of Australia, then this is probably where you should drop out and read something more interesting, like this article about wealthy Australians who are legally reducing their taxes. And once that gets you riled up, you can come back to one of my other articles on that subject.  

But if you’re a non-resident of Australia (or you’re willing to take that step), Panama is a fantastic, beautiful, amazing place to set up an offshore structure.

According to the ATO, you will have to abide by certain standards in order to qualify as a non-resident. For one, (and this is the most important), you need to have your permanent domicile outside of the country. You can own and live in a property in Australia, but you have to prove that your primary residence is outside of the country. 

But the ATO doesn’t just look at that. It conducts a “resides” test, which factors in sorts of elements. What is your intention in Australia? What are your family ties? Do you conduct business in the country? Where are your assets located? Are you economically attached to the country? 

These can get tricky so it’s important to consult a tax specialist to determine your eligibility. 

But if you’re still on board, let’s look at some key advantages for the offshore company in Panama. 

Key Benefits to Establishing Offshore Companies in Panama

Panama, the tax haven to the rich and famous

Too many of my clients come to me angry. The way they display that anger is different, but the cause is always the same. 

They pay too much tax. 

I think Kerry Packer said it best when he talked about the tax burden for Australians. 

“I am not evading tax in any way, shape or form. Now, of course, I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra.”

In fact, you can get a real sense of his ire in this quote as well:

“I have told you that I pay whatever tax I am required to pay under the law, not a penny more, not a penny less, and the suggestion that I am trying to evade tax, which is what you're putting forward, I find highly offensive”

Do you feel like that’s a pretty accurate statement? I certainly do. This is why I favour taking precautionary and preemptive steps to help my clients pay less tax, legally. 

And one of the best mediums I’ve found to do just that is Panama. As a country, I’m so in love with their banking laws, their lack of treaties, their friendly and flexible nature, and their love of foreign dollars that I recommend it as a great way to pay $0 tax.

Yes, it’s completely possible to establish an offshore company in Panama or investments with the effect of legally paying nothing in taxes.   

Nothing. Keep all your money. Legally. And let me show you how. 

Panama’s Perfect For Investments

As the world shifts into a digital age, it’s more likely that you don’t need a physical structure to conduct business. Options traders and e-commerce sites are common online businesses that can be set up in a country like Panama, Seychelles, or the British Virgin Islands. 

Although business owners might not find all the best amenities, I find that Panama offers a perfect place to hold investments. 

One of the key factors for setting up an offshore company for investments is distributing the income that the investment acquires. This is often why I suggest using something like a discretionary trust to help mitigate taxes as well as create another barrier between the asset and your person. 

As I’ve talked about in other articles, the family trust is a great vehicle for saving tax on the distribution of the money. But Panama goes a step further. As a country, it doesn’t charge capital gains, income, corporate, or asset taxes on foreign investments. In fact, the entire country is very flexible towards foreigner’s dollars. Save all that foreign tax by holding an investment over there, and you could find yourself with a $0 tax bill at the end of the year. 

Panama’s Foreign Policy

It’s pretty safe to assume that Panama loves Westerners. The country has changed so much over the last couple of decades that it’s become known as the “Dubai” of the Americas, where the standard of living has mirrored what Western life is like. 

It’s been helped tremendously by President Ricardo Martinelli, who in 2012, issued a new Friendly Nations Visa, allowing 22 Western countries to apply for permanent residency on the fast track. That number has increased to include 50 countries. And even if your country is not listed (which Australia is), you can still acquire permanent residency for tax purposes through donations to the forestry industry.    

Panama has worked hard to create financial laws that appeal to foreign nations, and they’ve made every effort to make it easy to use those laws to your advantage.

Panama’s Privacy Laws

When you think banking secrecy, you probably think about Switzerland. But Panama’s banking laws are pretty much on the same level, a major factor why the rich and famous like to park their wealth in the country.  

With intense secrecy, Panama protects the names and identities of the people conducting business and holding accounts in the country. Panamanian corporations are very easy to set up and allow for a further barrier between you and your money for tax purposes. 

This isn’t to say that you are hiding anything in Panama, but that with 100% legality, you are establishing a secure firewall around your investment in a country that welcomes and protects it.

Considering Panama for Offshore Company Investments

I’ve spent a decade protecting the wealth of Australians here in this country. And sometimes, it makes financial sense to pack up your bat and ball and take your investments overseas. Panama, in my opinion, is a great tax haven that legally allows Australians to pay nothing in tax. Pay what you owe, of course, but if you set it up properly, you could owe nothing.

Again, this really only applied to Australians who are non-residents, (or would consider that step) and want to find a viable way to legally reduce their tax bill. If you are an Australian resident, there are other options that we can look at on a case-by-case basis. 

And who am I? I worked for 10 years behind the desks as an accountant for the Australian Tax Office. I saw what it was like on that side, which is what prompted me to start up my own firm to help Australians 100% legally minimize their tax burdens. 

I’m an expert in Australian tax law as well as international taxation laws. I’ve been featured in a report on the Panama Papers leak, in which I was listed as “completely legal” and “not suggested of any wrongdoing or illegal” activities. 

Sometimes, it takes a tax specialist to look for alternative ways to reduce your tax bill. Too many tax accountants tend to favour the ATO rather than their clients, leading to the same results every time. If you want to try something different and access the out-of-the-box thinking that could reduce your tax bill to $0, contact us. 

If you fill in the contact form below, we can set up a no-obligation, 15-minute assessment of your situation. Even if you are interested in the slightest to save more of your money, talk to us today to save more money on your taxes. We have your interests at heart, and we have the right strategy for your needs. 

Save more of your own money today.