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Panama: Offshore Legal and Tax Regimes

Forms of Offshore Operation

Offshore entities may take the following forms:

Licenses are required only for financial institutions (see Offshore Business Sectors). Corporations do not have to disclose beneficial ownership, and Trusts and Foundations need not disclose the names of their beneficiaries. Limited Partnerships do however need to disclose the names of their members.

In 2007 Panama inaugurated a headquarters company regime (sedes de empresas multinacionales, or SEM) which offers tax breaks to encourage multinational companies to set up various types of service companies. SEM companies are exempt from VAT on services rendered to non-Panamanian taxpayers, and are exempt from income tax on profits from such services. Expatriate employees of SEM companies also receive tax privileges.

In order to achieve SEM status, group assets must be worth at least US$200 million. A minimum initial capital of US$2 million is required if the group's main office is to be in Panama.

 

 

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