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How Do I Bring Money Back From Panama?
http://www.panamalaw.org/offshore-articles/how-do-i-bring-money-back-from-panama
Some of the methods that we are aware of are as follows:
1. Money may be wired directly from offshore into a domestic account. Then accounted for as either income, dividends, return of capital, borrowed funds, annuity or whatever the reason is.
2. Offshore banks and brokerages issue ATM debit cards and secured credit cards to account holders. These cards may be used to make purchases from merchants or to withdraw cash from an ATM.
3. The Panama Corporation or Foundation may purchase real estate, cars, businesses, etc. By this means, assets are held under a corporate or trust name, thus helping to protect the client's privacy.
4. The client may borrow funds from the corporation or foundation. The corporation or foundation is a separate legal entity from an individual and may make loans to individuals or other entities.
5. Property may be given to the Corporation or Foundation in return for an annuity which could be paid into a Panama bank or elsewhere.
Panama Bank Secrecy Laws
http://www.panamalaw.org/panama_bank_secrecy.html
Today Panama has become the Switzerland of Latin America. There are 150 banks in Panama many of which have their name on a 40 story modern skyscraper. Panama is often touted as having the best banking secrecy laws in the world. This author believes this to be true and we will address the bank secrecy laws of Panama in depth.
The first important point to look at is the existence of any tax treaties that Panama may be in with any other countries. This is an easy topic since Panama has no tax treaties with any other countries. Tax treaties can be privacy invasive for a banking client. Under some treaties the bank must collect a certain percentage of taxes from interest income paid to the clients and this money is turned over to the client’s home country. Other treaties call for an exchange of information so if a requesting country wanted to gather certain facts about a bank account or if a certain constituent of theirs had a bank account the bank would be obligated to provide the information. The European Union Withholding Tax Treaty is a very relevant treaty.
The next type of treaty one must look at is called the Mutual Legal Assistance Treaty, or MLAT. This treaty allows countries to request information from other countries in the treaty. The general way this type of treaty operates is through diplomatic channels. Panama is in such treaties. The requesting country must have a criminal case on file in the national courts of their country. They would then cite this case already in their criminal courts when the request for information is made. The requesting country would a need to show that the requested information about the Panama bank account is absolutely required to successfully prosecute the case and that the requesting country has no other way to obtain such evidence. Then the request is considered by Panama. Panama may ask for more information. Panama could deny the request on whatever grounds they wish to use. Panama could also decide to conduct their own investigation because they feel that some Panama laws may have been broken and delay the MLAT request until after they have concluded their investigation which may be some years. The statue of limitations could expire before Panama completed their investigation. This is not to say that Panama is in the habit of thwarting requests for information but Panama does have a right to investigate crimes that took place in their jurisdiction. As a result of these investigations they could confiscate assets and prosecute individuals under their own laws.
For the MLAT to take effect the violation in question must be a crime in both the requesting country and the country the information is requested from. Various MLAT treaties have all sorts of details and exceptions and should be read individually if you are seriously interested in a particular treaty. Panama not only has no tax treaties with any other nation but all income tax related offenses in Panama are civil offenses only, not criminal offenses. So tax matters are not a crime in Panama. Thus Panama does not participate in requests for information in tax offenses. Panama does cooperate in certain areas freely. If one acts fraudulently while in the capacity of a fiduciary in a financial relationship Panama will cooperate. Panama also cooperates in cases of narcotics trafficking, money laundering, terrorism and child pornography.
The Panama Bank Secrecy laws are contained in a number of different legal statues. We will go through some of the relevant ones:
The Panama National Banking Commission was formed by Cabinet Decree 238 of July 2, 1970.
Article 74 of Decree 238 deals with protecting the privacy of Panama bank clients. It states that the Commission is prevented from conducting or requesting investigations concerning the banking affairs of any bank clients. Any data obtained by the Commission in the course of its normal regulatory functions may not be revealed to any person or authority, except if subpoenaed in accordance with the legal provisions in force (Panama Court Order required). If a violation of this occurred Article 101 of this Cabinet Decree contains provisions for the dealing of such a violation.
Article 101 of Cabinet Decree 238 states that:
"Any person who furnishes information in violation of this Cabinet Decree, or who violates any of the prohibitions established in it, for which no specific punishment is provided for, shall be subject to a monetary fine as determined by the Banking Commission, without prejudice to applicable criminal and civil liabilities." This is fairly strong language.
Article 65 of Cabinet Decree 238 deals with how the National Banking Commission may gain access to documents relating to the bank's operation, not individual records of banking clients. The Banking Commission needs to regulate the banks financially and thus inspect their books but this is mandated to be done on a collective basis, thus the books for the bank as a whole are inspected not the records for an individual account holder at the bank. The Banking Commission may not examine or inspect any type of individual deposit accounts, nor the securities held in custody by the bank for clients, nor the safe deposit boxes belonging to clients and their contents, nor the documents associated with receiving credit from the bank, unless there is a Panama Court Order in place that specifically authorizes such inspection or examination according to Article 89 of the Panama Commercial Code.
Panama statues specify that bank secrecy may be lifted by a Panamanian court through Article 89 of the Commercial Code. This is not a commonly invoked procedure but is possible concerning serious criminal activities.
Articles 168 and 170 of the Panamanian Criminal Code contain two sections which enables criminal prosecution for violation the privacy of Panama banking clients:
Article 168. Any person that is in legitimate possession of correspondence, records or documents which are not intended for public knowledge and notwithstanding discloses said correspondence, records or document without proper authorization, even in the event that they were addressed to him, shall be subject to prosecution, whenever such disclosure might inflict damage.
Article 170. Any person that in the course of his occupation, employment, profession or activity obtains knowledge of confidential information that in the event of being made public could inflict damages, and such person discloses that information without the consent of the concerned party; or in the case that disclosure of such information were not necessary to safeguard a higher interest, shall be punishable by imprisonment of 10 months to 2 years or a comparable fine, and the inability to practice his occupation, employment, profession or activity for not more than 2 years. One can readily discern that this would cover Panama Stock Brokers, and Panama Banks including all the employees and officers. This could also be construed to cover Directors of Panama Anonymous Bearer Share Corporations and Council Members of Anonymous Panama Private Interest Foundations.
Panama has done away with numbered bank accounts as have the rest of the offshore tax haven jurisdictions. This is due to pressure from FATF, the Financial Action Task Force. FATF is a private entity that unofficially dictates anti-money laundering statues to the banks worldwide. Numbered accounts are no longer allowed.
Panama through the use of anonymous Bearer Share Corporations accomplishes practically the same privacy as the old numbered bank account. The banks around the world including those in Panama must know who their customers are. This usually means getting identity documents such as passports, driver’s licenses, national identity cards, and letters of reference from banks and businesses. The Panama Bearer Share Corporation is anonymous in that there is no reporting or recording of any stock ownership records in any registry or database thus it is impossible to determine who the natural persons are behind the corporate veil. This means when international wire transfers are sent only the name of the anonymous corporation appears in the wire, the true owner of the account is not revealed for the world to see same as it was when numbered bank accounts were allowed. With regards to writing checks the same applies assuming the signatory signs the check in a hard to read manner. To provide for more privacy Panama only allows an attorney to form a corporation or foundation. This cloaks the formation of the corporation with Panama attorney client privilege further protecting the owners of the corporation or foundation with an additional layer of privacy. In most tax haven jurisdictions the formation of a corporation handled by a corporate agent which does not provide privileged communication to protect the identity of the person owning the corporation.
One can readily see why Panama has become the new Switzerland of Latin America.
1 Panamersa Corporation (PNMS) 55499
2 GS Carbon Corp. (GSCR) 48262
3 Franchise Capital Corp. (FCCN) 40520
Lots of eyes - Not many shares.
Demand exceeds supply.
WEEEEEEEEEEEEEEEEEEEEEEEEE.
$676,258 traded over the weekend.
I can barely speak....
The only thing I can seem to say is....
WEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!
GAME OVER MAN!!!!!
Tomorrow should be one of a kind.
Shorts will BURN!!!
5,731 PDRs traded throughout weekend at an average of
$118.00 each, representing more than 57 million shares of PNMS stock at $0.018 per share
--- Should be .0118 per share, right?
Great PR - PNMS still needs a good proof-reader, but when things are going this well, WHO CARES!!!!!!!
News for 'PNMS' - (PANAMERSA Opens PDR Exchange, Beneficiaries Bring Huge Showing within the First Weekend)
DALLAS & PANAMA CITY, PANAMA, Jun 25, 2007 (Canada NewsWire via COMTEX) -- PDR
Exchange (Panama), Inc. is now open to beneficiaries for trading, announced
PANAMERSA Corporation (Pink Sheets: PNMS) CEO Mike Terrell. Trading opened at 5
p.m. CST, Friday with 5,731 PDRs traded throughout weekend at an average of
$118.00 each, representing more than 57 million shares of PNMS stock at $0.018
per share. The Exchange is open 24/7.
"Today marks the beginning of a new level of trading and wealth management
through the PDR Exchange (Panama), Inc. trading site," added Terrell "Through
the foundation, the exchange is able to provide a safe haven for investors,
while allowing beneficiaries the ability to trade free of market manipulation."
While American Depository Receipts (ADR) are commonplace and allow Americans to
participate in offshore entities, Pan American Depository Receipts (PDR) provide
opportunities for people unilaterally to participate in the growth and economic
integration of Latin America into the western hemisphere and the world.
Membership in Fundacion Pan America is required prior to participation; however,
once an account is established through the Fundacion it can be used as an asset
depository. As with any depository Fundacion, bank or IRA, a member will be
issued a receipts (PDRs for assets held within Fundacion Pan America. Membership
is for individuals, legal entities, or governments in good standing).
"This is the day we have been waiting for. The global investment community will
now see the power of PDRs and the economic boom of Latin America," said
Fundacion Pan America Protector Pedro Borges Fiol.
Fundacion Pan America holds multiple entities, with many already being traded on
PDR Exchange (Panama), Inc. Operating companies include:
Bella Vista Developments - REIT
Corporacion de Desarrollo Pan America CODEPA, S.A. Bono Pan America Bond
Corporacion MonyCard, S.A.
Cruceros del Caribe, S.A.
Grupo Pan Americano de Seguros, S.A.
Lineas Aereas Panamericanas LAP, S.A.
PANAFIN Internacional, S.A.
PANAMERSA Corporation (PNMS)
PANAMERSA IV Ecuador, S.A.
Pan America (MMVII) Sociedad Anonima PANAMERSA Pan America IV Venezuela, S.A.
Pan America IV Colombia, S.A.
Pay Pro LATAM Sociedad Anonima
Port- Sae Productions Sociedad Anonima
Through the PDR Exchange, beneficiaries of Fundacion Pan America are also able
to make investments in the ecological future through MicroForest investments.
These investments include preserved land in Guatemala, Ecuador, Colombia,
Venezuela and that COROBICI Wildlife Preserve in Costa Rica. More information
can be found on PDR Exchange (Panama), Inc.'s home page, www.pdrexchange.com.
PANAMERSA Corporation (PINKSHEETS: PNMS) is a holding company for a group of
business enterprises, which promotes the commercial integration of Latin America
into the economic development of the Western Hemisphere. PANAMERSA Corporation
is engaged in global e-commerce and e-biz solutions offering interactive
e-commerce and e-biz programs in addition to a range of goods and services
online including: prepaid Debit cards; e-commerce merchant accounts; life
insurance policies, gold transactions; telephony services, text messaging, VoIP,
Micro Forests properties, real estate investment participations, fixed and
variable income real estate properties in Costa Rica and Panama, offshore
financial services, asset management and protection; travel services, leisure,
business, health, relocation services, and digital marketing services.
Forward-looking statements are not historical facts as "forward-looking
statements" defined in the Private Securities Litigation Reform of 1995.
Forward-looking statements are not guarantees of future performance. Our
forward-looking statements are the result of profound analysis on trends in our
globalizing economies that we anticipate in our industry. It is our good faith
vision and estimate of the effect on the globalization, integration and
electronic business trends will have on our company. Our statements are also
subject to risks and uncertainties beyond our reasonable control that could
cause the results of operations to differ materially from those reflected in our
forward-looking statements.
SOURCE: Panamersa
CONTACT: PANAMERSA Corporation Mike Terrell, 214-774-4870
Panama Private Interest Foundations - Repost
http://www.panamalaw.org/panama_foundations.php
The Panama Foundation is more than just a tool to fund a philanthropy organization or center.
“Foundations are the favored asset protection tools
of the Super Rich such as the Rockefellers and Rothschilds”
A Panama Private Interest Foundation is sort of a combination of a will, a trust and a corporation best of all, in a sense. Panama Foundations are more versatile and can accomplish more than Trusts plus they are anonymous. It only takes 2-3 business days to form a Panama Foundation. Panama Corporations can be formed in the same 2-3 days even if the Corporation is to be owned by the Foundation. No one owns a Panama private Interest Foundation, so you are not the owner of the Foundation, no one is according to the statutory laws of Panama. A Panama Foundation can own the shares of a Panama Anonymous Bearer Share Corporation, thus removing you from being any sort of owner of the Corporation. Now since the Corporation is owned by the Foundation and you own neither it creates a most beneficial scenario for some people. Add to this you are not the founder of record of the Foundation (we supply a founder), you appear in no public registry or database in regards to the Foundation and the Foundation can even be so created that you are not even a beneficiary, you can just be the protector which is a private position never appearing in any database or public registry. You are not a beneficiary of the Foundation which some governments could view in a similar way to the beneficiary of a trust, not an owner of the Foundation and not really a true person of control, just a protector who protects things to make sure the wishes of the foundation are fulfilled. Foundation protectors do not initiate transactions just oversee them to make sure they are consistent with the wishes of the Foundation thus they are not persons with true control over the Foundation, they just have veto power. Read below to learn more and questions are always welcome. This is serious material that needs to be studied before one can truly appreciate all the thought that went into the legislation creating the Panama Private Interest Foundation with all its subtle and not so subtle advantages that make this the most outstanding asset protection tool in the world today.
Summary of Panama Foundation Benefits:
Protects assets (real estate, bank accounts, stocks, bonds, art and collectibles, corporations, boats planes, cars) from financial enemies and potential financial enemies. A Panama Foundation can own one or more Panama Corporations. This means you can operate an anonymous Panama Corporation which is not owned by you, it is owned by the Foundation. Foundations have no owners. A Panama Private Interest Foundation is a court tested method to keep assets immune from the personal debts of the person starting the Foundation. It prevents forced heir ship. The Panama statues relating to Foundations are based on the Lichtenstein model – “Stiftung”.
According to Panama law, the assets of a Panama Private Interest Foundation are not considered to be subject to sequestration or embargos. This means that the assets can not be frozen as a protective measure before a full trial is gone through. The meaning of sequester is as follows from the legal dictionary: a legal writ authorizing a sheriff or commissioner to take into custody the property of a defendant who is in contempt until the orders of a court are complied with, or a deposit whereby a neutral depositary agrees to hold property in litigation and to restore it to the party to whom it is adjudicated to belong to. The exception to this rule would be if the Foundation itself (not the founder, not the protector, not the council members, not the beneficiaries) did something illegal like for example it illegally broke a lease on a real estate transaction and refused to pay the rent owed, then the Foundation assets could be frozen to the extent of the amount owed under the contract if a judge so ordered and a bond was posted. If the Foundation itself does not directly commit the illegal action then the assets of the Foundation are not subject to freezing or seizure. This gives one great peace of mind when funding their foundation and we suggest to our clients that the Foundation never do anything that could lead to any litigation, think of it as a holding entity. Welcome to Panama.
The foundation can have instructions to dispose of assets in a certain way in the event of you encountering serious legal or other difficulties like being sued, being forced into bankruptcy, being kidnapped and held for ransom, being blackmailed or the victim of extortion, or if in any way you are incapacitated or your ability to function freely is inhibited in whole or in part, etc. There can be secret instructions for a specific person to deal with assets in such an event as the founder sees fit. These secret instructions can appoint a temporary protector in the event you are under such duress with specific instructions as to how he should proceed with the foundation and its assets. This would remove the ability for you to move the foundation assets around, period. This is now something you can not do until you can demonstrate to the person inserted as the temporary protector that the conditions acting as the trigger for the empowerment of the new protector are no longer in place or no longer operative and you are no longer under duress and then as per your instructions you will be the Protector again with all the power returned to you.
Panama Foundations have no owner thus there is no registry in existence that records Foundation ownership in Panama. The Foundation can be a shareholder or owner of a corporation. Thus your Foundation could be the owner of an anonymous Panama bearer share corporation which you use to conduct business. Then you could say you are not the owner of the corporation. Since a Panama Foundation really has no owner you would be telling the truth and in the unlikely event the Foundation came up you could also say you do not own that as well.
Foundations can be used to provide for the financial well being of family members according to your explicit instructions. Once could say my foundation income will go to my surviving spouse but in the event the spouse remarries then the foundation proceeds will go to my eldest child. This would be enforceable in Panama. The Foundation can protect closely held businesses, providing for continuity into second and third generations by preventing property-splitting; to protect and provide for minors or disabled persons or those incapable of managing their own assets; to manage payments of income or distribution of assets to family members or to provide for their education, housing, or maintenance.
The Foundation can manage profit sharing or pension plans for employees, to hold shares, participate in or have an interest in private or public companies; it is a vehicle for the collection of royalties. It can engage in commercial transactions where the proceeds of such are dedicated exclusively to the non-commercial purpose or objectives of the Foundation. Very useful point.
You could have a formal written agreement appointing you as the investment manager or business manager for the Foundation. This agreement would be signed by the Nominee Council members and would be notarized and apostilled if needed. The agreement could spell out your compensation including benefits like use of foundation auto, travel expenses, general expense account, use of foundation apartment or house, use of foundation boat, medical benefits to be paid directly by the foundation to the health care provider or doctor including elective surgery like plastic surgery, paid legal expenses direct from foundation to law firm, etc.
According to Panama law, the assets of a Panama Private Interest Foundation are considered to be "non-embargable", and "non-sequesterable", which means that the assets can not be frozen under any circumstances.
The Panama Foundation needs no business license.
The annual tax for the Foundation is fixed at $300, which is included in total subsequent year fees of $695 starting in year two.
The Foundation can serve as a last will and testament.
The Foundation can effectively guard against disputes amongst heirs.
The Foundation can carry on scientific, philanthropic, religious, humanitarian or educational purposes.
The Foundation can have bank accounts.
The Foundation income is tax free under Panama law.
Royalties, copyrights, trademarks can be assigned to the Foundation.
You can assign assets to a Panama Foundation in return for an annuity.
The Foundation can be an investment vehicle for real estate, stocks and bonds. It can hold bank accounts, boats, planes, artwork, collectibles or other assets with highly specific instructions as to how such assets should be dealt with under varying circumstances, all custom designed to meet your specific needs.
Restrictions - In general, Private Interest Foundations may not engage in commercial activities like a corporation but they may carry out commercial activities like owning corporations that are actively engaged in commercial business activities, as long as the profits of those activities are used for the purposes for which the Foundation exists. The Foundation can of course engage in passive investments like stock market investments, mutual funds, bank deposits bearing interest, Forex, bonds etc as long as the proceeds are used for the purposes for which the Foundation exists – for the benefit of the beneficiaries and you can of course be a beneficiary of the Foundation. You could also have an investment manager agreement with the foundation signed by the nominee council members, notarized and apostilled stating your compensation and benefits for managing the investments of the foundation. This agreement would be private and would document your role as an employee with the foundation.
Cast of Characters in a Panama Private Interest Foundation - The Foundation has a Founder, a Council, a Protector, and Beneficiaries.
Founder: The Founder is the person or entity that establishes the Foundation in the Public Registry of Panama. Our law firm provides a Founder for you since the Founder appears in the Public Registry. We provide a Founder who does not know you for your privacy, protection and anonymity. The Founder has no control of any sort over the Foundation and its affairs, and is only recognized as the individual who presented for filing the Foundation articles in the public registry when the foundation was originally registered.
Council: The Foundation's Council can be thought of as being similar to the board of directors of a corporation. The council members are each recorded in the public registry with their names and identification as council members of the Foundation. Our firm appoints a Nominee Foundation Council to fill the council positions like we provide nominee directors for a corporation. The nominee council members do not know who you are to provide privacy and anonymity for you. Along with each nominee council member comes an undated letter of resignation enabling you to replace the council at any time. Nominee council members have no control over the Foundation assets, can not go to the bank and take money out since they are not bank account signatories. If the nominee council members tried to add, change or delete the bank account signatories the Panama bank would directly contact the existing signatories on the account for permission in which case the signatory would call the police and the nominees would go to jail. The nominees know this, Panama banks understand nominees and this is not a scam that will work. Being a nominee does not come with bank signatory privileges or any other form of asset control. A Panama Corporation can take the place of the nominee council members.
Protector: The Protector is the person or entity who has the real control over the foundation and all of the foundation assets. The Protector is appointed by the Foundation Council at the time the Foundation is created. After the Protector is put into position, the Protector is free to remove and replace the nominee council members whenever they chose to do so without any further permissions or steps needed to be taken. The Protectors appointment can be kept private through a notarized Private Protectorate Document, signed by the nominee foundation council members. This document is not registered or recorded anywhere thus the position of protector is quite private or just about anonymous, not to be found in any government database or registry. As protector you can maintain complete control over your foundation and its assets while maintaining serious privacy. A protector is not mandatory, and one can always use a nominee protector as well. It is possible to insert in the foundation charter or in its regulations that in order for the nominee council members to actually be able to exercise their powers they are required to obtain written authorization from the foundation protector. This means if they tried to do something on behalf of the foundation like enter into a contract they would be required to present the document that names them as foundation council members and this document also limits their ability to act requiring written permission from the protector. In the case of a bank, the bank contacts the existing signatories in the event there is a request to add, remove or change signatories. Same would apply regarding a request to close the bank account.
Beneficiaries: The Panama Private Interest Foundation does not have owners, it has foundation beneficiaries. The Foundations Beneficiaries are appointed by the Protector through either a simple private written set of instructions which will keep your beneficiaries private out of any registry or database. One could instead use a more formal set of Foundation By-Laws. Either way, the privacy and confidentiality of beneficiaries can be assured. This is important to protect against kidnapping, blackmail, extortion, identity theft, frivolous litigation (if ones assets are concealed they are not so much of a target). The Panama Foundation may be set up so that the protector (that would be you) is the sole beneficiary of the foundation until death, at which time the foundation continues but its purpose alters for the benefit of the other beneficiaries you so designate. You could insert instructions that are highly specific like if a certain beneficiary (say surviving spouse) remarried their benefits may shift to another beneficiary (children). Foundations can continue for 120 years. Panama Foundations restrict the ability for the beneficiaries to fight with each other over the estate and wind up not speaking to each other for the rest of their lives.
Letter of Instructions: The Letter of Instructions is a simple letter, written by the Protector, which specifies exactly how the Foundations assets should be handled or distributed upon a triggering event such as the death or incapacity of the Protector. The Letter of Instructions should also state whether the Foundation should continue existing, and have a new Protector appointed, or if the Foundation should be dissolved and how the assets should be liquidated upon the death of the Protector. There is no specific format for the Letter of Instructions, and it can be written or changed at any time after the Foundation is formed, per the Protectors wishes. The Letter of Instructions can be held privately with no filing requirement so there is non-disclosure of details with serious privacy for all concerned. Generally, most people prefer to maintain the Letter of Instructions privately, so that the Beneficiaries and Protector remain anonymous and private.
Foundation By-Laws: The Foundation does not need to have By-Laws, since a Letter of Instructions is legally sufficient for fulfilling the Protectors' requested testamentary instructions or wishes. However, one could have a more formal Foundation testamentary document, written and signed by an attorney from our law firm, and notarized by a Panamanian notary. The Foundations By-Laws essentially handle the same function as a Letter of Instructions since the By-Laws specifying how the Foundation should respond upon a specific triggering event such as the death or incapacity of the Protector. The By-Laws should also state whether the Foundation should continue existing, and have a new Protector appointed, or if the Foundation should be dissolved upon the specified triggering event(s). There is a legal precedent that the By-Laws must follow. By-Laws content can be modified at any time at the discretion of the protector. The By-Laws can be held privately for anonymity, or can be registered publicly which is not suggested normally.
Unique Foundation Features and Benefits:
Anonymity: Like the Panamanian Corporation, the Private Interest Foundation provides anonymity to its beneficiaries as well as to the Founder.
Arbitration: The Foundation Charter may provide that any controversy arising in connection with the Foundation be resolved by arbitration, thus avoiding the public records of litigation. These provisions may also include the location and the procedural rules to be followed in arbitration.
Asset Protection: The assets of the Foundation cannot be used to satisfy the debts of the Founder or of the Foundation beneficiaries, such as divorce proceedings, lawsuits, bankruptcy or other liabilities. When assets have been transferred to the Foundation and out of the reach of creditors, any claims of fraudulent transfer to remove assets from the reach of creditors must be made within three years and the court wait to hear such a claim in Panama it usually five years maybe longer.
Capital Requirements: A minimum of US $10,000.00 of assets must be transferred to the Foundation, although this need not take place immediately following establishment. There is no recording in any registry of the capital amounts other than this minimum transfer, so the sum of total assets held by the Foundation remains totally private.
Confidentiality: The Foundation Nominee Council Members, Registered Agent (us your law firm) and any other person that is privy to information relating to the activities, assets, transactions or operations of the Foundation are required to keep this strictly secret. In addition to civil liability for actual damages, breaches may result in imprisonment for up to six months and penalties of up to $50,000.00. Panama thrives on Privacy.
Documents and Records: There are no requirements to file tax returns or a financial statement which means no auditing of such things. Books and accounting records may be held in Panama or abroad, you can even electronically put them up on a server in encrypted form is some part of the world where the location is only known only to you. Discovery is tough if you have no idea where the books and records are. Furthermore, the management and operation of the Foundation is not subject to the supervision of any governmental authority. No snooping, no fishing expeditions, no harassments, no Panama taxation, nothing vital in public records, anonymity for Foundation Founder and beneficiaries, etc.
Estate Planning Vehicle: The Panama Private Interest Foundation is a sophisticated and efficient substitute to wills, trusts etc. The Panamanian Foundation is a perfect vehicle for inter vivos or mortis causa estate planning, as it can be set up to remain in perpetuity in so far as the purposes of the Foundation continue to be met. This may prevent hereditary disputes, as well as avoiding forced heir ship rules.
Foundation Council Meetings: It is not necessary to hold annual meetings.
Founders: The Founder may be one or more natural or legal persons of any nationality. Panama law is silent on the transferability of the Founder’s rights and obligations, there is nothing to prevent the transfer of these rights and obligations from a nominee founder as registered in the Foundation Charter to the real founder by a private document, think secrecy. We normally use a Nominee Founder. It is possible for the Founder to retain certain controls with respect to the Foundation, although these should be set out clearly in the Foundation’s Bylaws. There can also be a private instruction that speaks to this subject.
Preservation and Administration of Assets: The Private Interest Foundation is a perfect vehicle for the preservation and administration of assets. The Foundation Charter may limit or prohibit property splitting, property transfers, the mortgaging or using of property to secure loans or other forms of financing, and regulate the general administration of the assets or business donated to the Foundation. The Foundation should be authorized to preserve, administer, and invest the assets consigned to it and to conclude all commercial and legal transactions necessary to the realization of its purposes. The Protector can play a vital role in the administration of the Foundation.
Revocable: Although the Foundation is generally irrevocable, there are a limited number of cases, where it is possible to revoke its establishment:
Before registration of the Foundation Charter.
When the Foundation Charter expressly provides for revocation.
For any of the Civil Code causes for revoking inter vivos donations.
Tax Advantages: The assignment, transfer or donation of assets to the Foundation is not subject to any tax under Panamanian law, neither is the organization, modification or dissolution of the Foundation. Provided it meets general requirements; income generated by assets of the Foundation is not subject to taxes, contributions, rates or liens of any kind.
Other Foundation Technical Points
There is no statutory requirement for a private foundation to file any annual tax return or financial statements.
One could set up a Panama Foundation to transfer control of assets to the surviving spouse, and one could insert instructions privately that if the surviving spouse remarried the control reverts to another family member or another person. The Panama Courts would find this completely enforceable and this is not at all unusual
The foundation is revocable by the founder. If a nominee founder is used private instructions can be established to transfer this control to another.
The foundation may be created to become effective on a certain date, on the occurrence of certain event or condition, or upon the death of the founder.
Detailed information about the names, percentages and other particulars regarding the beneficiaries can be included in a separate document called “Regulations or Instructions” which is of a private nature and as such does not have to be recorded at the Public Registry Office. Anonymity.
A foreign foundation may re-domicile in Panama through a Certificate of Continuation. By the same token, Panamanian foundations may transfer their domicile or assets to another country if so provided in the foundation charter or its Regulations.
The rules of “forced heir ship” of other countries will not be applied against the foundation.
The cost of a Panama Foundation is $1795.00 complete with a Panama Bank Account. A Panama Anonymous Bearer Share Corporation plus a Panama Foundation with Bank Account is $3300.00.
Summary of Panama Foundation Benefits:
Protects assets (real estate, bank accounts, stocks, bonds, art and collectibles, corporations, boats, planes, cars) from financial enemies and potential financial enemies. A Panama Foundation can own one or more Panama Corporations. This means you can operate an anonymous Panama Corporation which is not owned by you, it is owned by the Foundation. Foundations have no owners. A Panama Private Interest Foundation is a court tested method to keep assets immune from the personal debts of the person starting the Foundation. It prevents forced heir ship. The Panama statues relating to Foundations are based on the Lichtenstein model – “Stiftung”.
Panama Vessel Registration
For all the yachts that will be named PNMS
http://www.panamalaw.org/panama_vessel_registration.html
Panama's Ship Registry is number-one worldwide in popularity due to the ease of use and very low registration taxes and fees as compared to other countries throughout the world. Marine vessel registration in Panama is widely used by international shipping companies due to the numerous advantages.
At the time of registration all vessels must pay a one-time enrollment fee, based on a variable scale, plus a government fee. Registration of the bill of sale is $0.20 per net registered ton or fraction thereof, plus 20% surtax. Annual tax is $0.10 per net ton, plus other charges.
Liberal labor laws concerning Panama flag vessels are also an important consideration, and income earned on international shipping activities are specifically and expressly exempted from Panama income taxes.
Yacht Registration
It is possible to register recreational yachts in Panama. This has a different pricing structure than the ship registration described above. The registration certificate is issued for a two-year period, which is renewable after this period.
Applicable Registration Tariff:
$1,500.00 - if owned by a foreigner
$1,000.00 - if owned by a Panamanian (or a Panamanian corporation which is a nominal expense to arrange)
This tariff must also be paid upon renewal of the Registration.
Documents required for Registration:
Sale & Purchase Agreement, Bill of Sale - or if the yacht is newly built, then a Builder's Certificate
Power of Attorney
Deletion Certificate from previous registry (or Builder's Certificate if brand new)
Please note: you must also comply with the Radio Operator requirements, in order to register the yacht in Panama. If the yacht is more than 20 years old, then it will also be required to undergo a survey and safety
inspection.
Anonymous Yacht Ownership – What is done is the yacht is purchased in the name of the Panama bearer share corporation. The ownership of such a corporation is anonymous in that no ownership records are in any database or registry. Thus if the yacht is owned by the corporation which is anonymous, the yacht ownership is anonymous. The nominee directors and your law firm (us) can handle the transaction for you completing all paperwork. We can wrap additional layers around the boat by having the Panama Bearer Share Corporation owned by a Panama Private Interest Foundation which is also anonymous, yet controllable by you. There are a number of different strategies we can employ to keep the ownership of your vessel anonymous and confidential as a tool to protect you from kidnapping, extortion, criminals and to keep your affairs private in general. Panama excels in privacy. Unfortunately financing with conventional lenders does not work with anonymous ownership strategies. If you were wondering when it comes time to sell the boat you basically just sell the corporation which owns the boat leaving the boat ownership in tact. There is no requirement to report new owners of Panama corporations.
To learn more about Panama Corporations click here:
http://www.panamalaw.org/bearer_share_corperation.html
To learn more about Panama Foundations click here:
http://www.panamalaw.org/panama_foundations.html
Two Yacht-Based Panama Residency Visa Approaches
Because your yacht is owned by a Panama anonymous bearer share corporation and your investment is over $150,000, immediate residency is granted. You must have 3 full time Panamanian employees along with your company, which is easy to do with the standard minimal wage at $253 a month for crew members. This would be under the so called inversionista (business investor) program. However, if you invested $200,000 or more you could qualify under the solvencia economia propia program (person of means visa) and not even have the requirement of hiring at least three Panamanian crewman, since it can be easily argued that you are buying a home, albeit a moveable one. This latter probably would require investing in a full time moorage at a Panama port which would become your home away from home.
Full residency with a cedula is granted after one full year of holding the provisional residency card and after 5 years full citizenship is granted! (Click here for more details in our Panama residency section on these two visa classifications).
Cool - and thanks for your input - it is appreciated.
Glad to have you on board.
GLTU.
I think with a normal play, those numbers are accurate as is your assessment.
BUT....
How many other trading stocks do you know of that is having certs pulled at a rapid pace, thereby dramatically reducing the tradeable float. As a result, this won't act like a normal stock with flippers jumping in and out at the resistance points - actually it will happen, but the number of shares that will be flipped will continually get smaller.
We are seeing something here that has never happened before.
All rules are out the window.
No offense to you at all - just my thoughts.
Not bickering here, but the truth is that YOUR shares WILL eventually be converted - either when you do it, or when you sell to someone who will. As long as the PDR price equivalent is higher than the US pps, there will be "people" who will buy everything they can get their hands on and convert it for profit.
hmmmmmmmmmmm.....
There's the volume again!!
You're hired - PR director!!
This is more fun than raiding a whorehouse!!!
Things I see happening this week...
- A PR announcing the exchange
- A PR announcing how many certs have been received and processed
- If we're lucky, a PR concerning IRA/401K issues.
- A report from a trusted I-Hubber that money has successfully been wired into their US account
- A HUGE rise in the pps on the US market - .007 by the end of the week - especially if PDR sellers can get their money back to their brokerage accounts this week.
- By the end of next week, I bet at least 90% of the float will have been bought by those planning to pull certs and send them to Dallas.
lol.
He'll come back to find PNMS written all over the walls in crayon!!
GM all...
All systems are go for launch....
T minus 2 hours, 5 minutes
Transcript of Prima Panama’s meeting with Ricardo Vargas, Director of Immigrations
June 22nd, 2007
http://primapanama.blogs.com/_panama_residential_devel/2007/06/transcript-of-m.html
1. There has been a lot of controversy concerning the recent changes in the tourist visa regulations that went into effect on May 22nd. Why did the government feel it was necessary to reduce the number of days a visitor can stay in Panama on a tourist visa?
It’s a part of the government’s foreign and migratory politics, to evaluate from time to time the circumstances that allow a person to remain in our territory as a tourist. Before 1999 the maximum days allowed were 90, but in 1999 Law 47 extended it to a maximum of 180 days, after some careful consideration of several situations the government decided that 90 days is sufficient to be in the country as a tourist. Although, people interested in residing in the country have the options to any of the 30 different categories that allow a person to change from a tourist status to one more formal, like a temporary residency.
2. Sub-Director of Immigration Lic. Garcia Tovar was recently interviewed by Don Winner of the website Panama Guide. During the interview he is quoted as saying "tourists are those people who come here to visit for a short time, not to live here as a perpetual tourist. Those days are over”. What does that mean and how does this apply to foreigners that are buying second homes in Panama and plan to spend 4 or 5 months in the country?
Precisely, a person buying a home in the country can obtain a migratory status different from the tourist, as long as they meet certain conditions or prerequisites. Among the requirements is buying a property for $200,000.00 or above and that the person meet the rest of the prerequisites established by the law. They are basic protocol prerequisites, like a copy of their passport, payment to the national treasury for relocation services, certificate of good health, photo; just basic requirements. The person must own the property free and clear, with no mortgages. This would allow the person to change their tourist status to a category established in the law.
3. Mr. Garcia went on to say “…we are going to require people to register and to normalize their immigration status under one of these programs”. He was referring to one of the other visa programs available to foreigners like the pensionado visa or the person of means visa. Does the immigrations department feel that buyers of vacation or second homes (and planning to spend 3, 4 or 5 months in Panama) should be required to apply for a permanent residency visa?
If you are considering to buy a piece of property, the law favors you and offers you the opportunity to acquire a formal status, without giving up whatever nationality you have at that time, its an additional benefit, it does not take away from a previous right you have acquired previously.
4. The immigrations department is on record as saying that the 60-day extension to the 30-day tourist visa is at the discretion of the department. Who will be responsible for making the decision to grant or deny these extensions? What reasons would you use to deny an extension?
The analysis is that if you are going to a country as a tourist, generally you would not need a year or even six months; this would be an exceptional case. 90 days is considered to be enough time for a normal tourist to stay in a country. If you want more time the law offers other options, special permits that require a justification and of course other basic requirements. The visa is for 30 days, renewable up to 60 days max. By experience a person that wants to stay in a country over 90 days ends up staying a year or more as an illegal alien. The law is trying to help these people find a way to normalize their status. The majority of these people perform lucrative activities to help sustain their economic necessities, without having the proper authorization from the Ministry of Labor, the immigration authorities and from the fiscal point of view, they do not pay taxes, they are even be excluded from really being an instrument to the true development of the country. Are goal is for these people that are staying longer than the law allows, seek other options that the law offers them, and obtain a permanent status.
Example: a person that is applying for a 60 day extension must submit the following:
-written application
-fill out form with reason for extension
-present basic documents
-copy of airline ticket
-photos
-economic solvency
They have many cases where the person applying for the extension does not have the means to sustain himself while in the country; the reality is that no one can perform tourism without money.
The immigration Director stated that the process only takes hours and then he said minutes.
5. An article in La Critica yesterday reported that two foreign tourists (one from Chile and one from the US) were arrested by immigrations authorities for not having their passports and tourist cards with them. Can tourists now expect to be asked to show their passports and tourist cards and face arrest if they don’t have these documents with them?
He wanted to be clear that immigration did not arrest anyone, the national police detained some people while performing an exercise, they asked for their identification and the people did not have any documents that would identify who they were.
When this happens the police have two options:
-allow the people to go to the place where their documents are, verify documentation and allow them to continue their way.
-take them to the immigration office where the immigration office can verify that they have no impediments and are free to go.
6. Are there any plans to make the pensiondo visa more restrictive? For example, are there any thoughts on limiting this visa to people of retirement age of say, 62 or 65 years old? How about restrictions on the type of retirement plans that can be used to qualify for the visa like only accepting government retirement programs or large company retirement plans?
The Director of immigration is preparing, in conjunction with other government institutions a proposed law to modernize and organize the institution. Once this process is completed it will be submitted to the legislative office and to the public scrutiny so that everyone involved can give suggestions on how to modernize the institution. At this time the pensionado visa is not going to be changed, but it will be subject to revision when the proposed law reaches the legislature. The legislature is almost out of session, we hope to present it at the next one. This is a very sensitive topic that we plan to bring up to some serious debate. It is necessary that Panama’s new immigration policy, show a 25 year vision of Panama’s policies. These laws are modified with much difficulty from time to time. The original law from 1960 that regulates immigration has been modified in a timely manner, but is up for a revision of its immigration policies, defined under 3 concepts of balance:
-Commercial and investment opportunities
-Tourism opportunities
-Security issues
If we have an intelligent balance of these 3 concepts I think we can produce a law with benefits and can become a national strategy for development.
7. Since there’s been a lot of concern from foreigners regarding the tourist visa changes, is the government considering rescinding the changes and going back to the previous rules? If so, how long do you expect this to take?
I do not know of any intentions for changes, the law was recently approved; it’s been less than a month. Not enough time to really know what kind of impact its going to have. We’ll have to wait some time before we see what kind impact it’s had on the people visiting the country.
Would the government revise the law? The governments are always willing to revise a law, as long as it is for the best interest of the country.
8. How do you think the new restrictions on the tourist visa will affect Panama’s competitiveness against other countries, like México, Costa Rica and even the US, that allow visitors to stay longer?
I don’t think this new law is going to have a negative effect on people visiting Panama. The people coming to Panama are increasing every year and I don’t think it will be an obstacle for this continued growth. The measure taken to reduce the time in country goes hand to hand with the states security measures, and I reiterate that I don’t think it will affect the national tourism.
9. Is there any thought of doing a 2 tier Visa, for example if North Americans or Europeans come in under one time frame for 60 or 90 days?
At this time it has not been considered, I think this proposal deserves a chance for analysis and study. When the new proposed law reaches the legislature, would be an excellent opportunity for all the people involved in tourism and investment in the country present new proposals that would benefit the development of activities of our country.
Panama’s Director of Immigrations, meets with Prima Panama
http://primapanama.blogs.com/_panama_residential_devel/2007/06/panamas-directo.html
Below is the summary of the meeting Paul McBride had with Ricardo Vargas, Panama’s Director of Immigrations on Friday morning. What I find most interesting, and encouraging is this statement; “I don’t think this new law is going to have a negative effect on people visiting Panama”. “The government is always willing to revise a law, as long as it is best for the interest of the country”. Clearly our survey shows that the overwhelming number of respondents say it does have a negative affect! We can only hope that when they see these results, they will decide to reverse the recent change.
Ricardo Vargas, Panama’s Director of Immigrations, meets with Prima Panama to explain the government of Panama’s recent decision to change the tourist visa regulations.
On Friday, June 22nd, we had an opportunity to sit down with Ricardo Vargas, Panama’s Director of Immigrations, to discuss the recent changes to the tourist visa regulations. Mr. Vargas is the top official at the immigrations department.
During our conversation, we asked Mr. Vargas why the government of Panama felt it was necessary to change the tourist visa regulations and to explain the rationale behind the new law.
According to Mr. Vargas, the changes reflect the government’s need to control immigration, but was clear that anyone wishing to stay in the country for more than 90 days would be required to apply for one of the permanent residency visas options saying, “the government decided that 90 days is sufficient to be in the country as a tourist”.
Mr. Vargas also stressed that the current immigration regulations were written in the 1960’s and the government is preparing legislation that will completely overhaul the existing immigration laws. Legislation to update the conditions that apply to the various visa categories will be introduced in next year’s legislative session. Asked if he expects any changes to the Pensionado visa, Mr. Vargas said, “At this time, the pensionado visa is not going to be changed, but it will be subject to revision when the proposed law reaches the legislature”.
We asked if the government would consider rescinding the new tourist visa changes because of growing concern from the foreign community. Mr. Vargas said he was unaware of any such concern and said, “ I do not know of any intentions for changes”. However, he went on to say. “The government is always willing to revise a law, as long as it is best for the interest of the country”.
He said that the new restrictions would not make Panama less competitive with countries like Costa Rica and Mexico (with more favorable tourist visa conditions) and didn’t believe the new tourist visa regulations would be an obstacle for continued growth and won’t affect tourism saying, “I don’t think this new law is going to have a negative effect on people visiting Panama”.
Have you tried "tossing your cookies"?
How many people do you think are wiring money tomorrow to their brokerage accounts?
I know one pretty well.
I bet there are many others.
To all Longs - let's bash the crap out of this thing all day tomorrow until we're able to load up, then we can go back to telling the truth.
1 Panamersa Corporation (PNMS) 18998
2 SUMMUS WORKS (SMMW) 10894
3 Ifinix Corporation (INXR) 9364
4 Franchise Capital Corp. (FCCN) 6233
Theresa says DON'T WRITE ON THE BACK OF THE CERT!!!
Only fill out the Stock Transfer form and sign it in front of the medallion stamp holder - have it stamped and send the certs in with the forms.
This info is current as of Friday.
Looks like you guys are havin' some fun in here tonight.
Well deserved.
Can I turn my iggy button off yet?
Just ordered the rest of my certs -
PULL YOUR CERTS = KILL THE SHORTS
Checkmate.
MMs will have to walk the bid up to find sellers today.
If they intentionally move it up slowly, we could see the US price languish.
Paradise Lost-Taxes, Visas and Privacy
http://primapanama.blogs.com/_panama_residential_devel/2007/06/paradise-lost-t.html
A developer friend of mine recently said to me, "Sam, you build with one hand and tear down with the other". As I have been struggling with just how to deal with the recent miss-guided actions by the government of Panama, those words came back to me. As my readers know, I am an investor, promoter and resident of Panama. My wife and three boys are Panamanian citizens. The future of this little country is very important to me, not just because we make a living here, but because we have a life here. I love the country and its people and have seen first hand the positive affect of this kind of foreign direct investment.
Many credit me with having started the residential tourism boom here in Panama by building and promoting Valle Escondido before anyone was interested in property here. Over the last six years we have worked hard along with many others, to bring Panama to the minds of North Americans as a place to retire or have a second home. But just as things really start to get rolling, the Panamanian government steps in and appears to do its best to stop it. They will give many logical reasons for their actions, and of course they don't really want to stop it, but the truth of their actions comes down to money. They are not satisfied with the economic prosperity we developers and buyers have brought them. They want more and they foolishly believe that Panama is so wonderful and North Americans so rich (and foolish) that we will sacrifice our hard earned money and efforts and give it to them.
Why am I so negative? Because recent actions by the government through various laws and presidential decrees have convinced me that I am doing my readers a disservice if I don't tell it like I see it. There are hundreds of developers and thousands of buyers who try to make decisions based on reliable information they can find on the Internet and I am one of the sources they turn to. I am presenting the following article, written by Paul McBride, in the hopes that the developers and buyers make their voices heard loud and clear to their contacts in Panama that the actions of their government will cost them dearly. Foreign developers and foreign buyers have other options. They do not have to invest or reside in Panama.
I have seen a number of ill-conceived laws and decrees put out by this government over the years and several of them quickly rescinded when there was enough backlash and pressure applied. We have set up meetings with several Ministers next week in order to let our voices be heard. If, after reading Paradise Lost, you want your voice heard, go this website http://www.panamarealestateinvestors.com/primare/ and take 2 minutes, answer a few questions and leave your comments. We will present them to the Ministers at these meetings. If enough of you make your opinions heard, I believe the government will react in a positive fashion.
Paradise Lost
Taxes, visas and privacy
Paul McBride
CEO Prima Panama
Come to Panama! That’s the mantra we’ve heard voiced again and again over the past four or five years from a country wanting to cash in on the wave of baby boomers and others looking for their own personal paradise.
Come to Panama! Where the cost of living is affordable, taxes are low and where you’ll be welcomed with open arms from a friendly and helpful government.
Come to Panama! Where your privacy is assured and where you’re protected against the prying eyes of Big Brother.
Come to Panama! Paradise awaits you.
But all is not as it seems here in Paradise. And it makes me sad.
WHAT TAXES (Or, I thought I was exempt from property taxes in Panama)?
Unless the property you bought will be completed by August 31st, 2007, the 20-year property tax exemption that was instrumental in putting Panama on the real estate map is no longer in effect. However, reading the brochures, magazines and marketing material on the web, you would think that this important tax relief measure is still in place. To be clear, a tax exemption still applies, but it is much less than the 20 years that many people still believe exists. For example, a $250,000 home that is completed after August 31st still qualifies for a 5-year property tax exemption. But what happens after then? Well, the applicable yearly property tax rate on a $250,000 home under current Panamanian property tax laws is $4,512.50. What about that new luxury apartment in Punta Pacifica that was a steal at $450,000. What’s the property tax on that after five years? How does an annual tax bill of $8,712.50 sound to you? That dream of tax-free living in Panama may, in fact, be just that… a dream.
And if that wasn’t enough to get your attention, there’s another property tax issue lurking in the dark that could affect property buyers - the revaluation of land. Land has never been exempt from property tax in Panama. However, there’s an exception for land valued under $30,000. Until now, the value of the land was usually recorded at the public registry at less than the $30,000 threshold so no property taxes were due. The improvements on the land are also taxable but, until this year, if the land was valued at less than $30,000, there’s was no property tax levied on the land or the improvements if your property qualified for the twenty-year tax exemption.
But recent changes in the law could affect your tax-exempt status. The tax authorities have recently issued a new policy that allows property owners to revalue their land on the tax rolls until the end of 2007. If an owner does this, the property tax will be reduced to 1% of the new value (down from the current 2.1%).
But there’s an even greater incentive for property developers to revalue their land. Panama has a capital gains tax rate of 30%. Let’s say a developer currently has individual lots on his land valued below the $30,000 threshold to maintain the property tax exemption. Now, he can revalue that land at a much higher level. Why would he do this? Simple. By recording the land at a higher value he increases the basis (or his cost) of the land for tax purposes.
Here’s an example. Let’s say the developer is selling a $250,000 home on a lot in his project. He can now revalue the land at say, $100,000 and the home at $150,000. Now, let’s say it actually costs him $75,000 to build the home. His basis (or cost) for tax purposes is $175,000 (the value of the land plus the cost of building the home). His 30% capital gains tax is calculated on the difference between his cost ($175,000) and the sale price ($250,000). In this example, the profit is $75,000 and the capital gains tax is $22,500. If he didn’t revalue the land to keep it below the $30,000 threshold, the tax would be much higher. His basis (or cost) is $105,000 ($30,000 for the land and $75,000 to build the home) and his profit (for tax purposes) increases to $145,000. His capital gains tax is $43,500 or an increase of $21,000.
Why should you care? Because the higher valuation on the land means you have to pay property tax from the very first year you own the property, even if you qualify for the 20-year tax exemption. Since the land is now valued at $100,000 and the first $30,000 is exempt, your 1% property tax bill comes to $700 a year. This revaluation just cost you $14,000 over the next 20 years!
I know this may sound confusing since the tax code is pretty complicated. But here’s the bottom line - if you plan to buy a home or property in Panama before the end of 2007, you should check with the developer or seller and find out the valuation of the land on the tax rolls. If your land (or lot) is valued over $30,000, you’re going to receive what could be a hefty a tax bill.
VISAS- YOUR MONEY CAN STAY, BUT YOU GOTTA GO
While the residential real estate market in the U.S. continues to slow, the one ray of light has been the growth of the vacation and second home market. Here in Panama, the vacation and second home market is booming too, particularly in the beach areas and mountain communities. What better way to invest your money (or perhaps that IRA nest egg) than in buying a beachside condo or mountain retreat? Panama is the perfect place to buy a second home. What would you really rather do - spend those cold, northern winters with your toes in the sand and golfing in the cool mountain valleys or de-icing the car windows and putting on snow chains?
In the good old days, if you were from the U.S., Canada or Europe, a simple $5 tourist card and passport would give you a 90-day pass to paradise. And, if you really liked it here, you could have easily extended your tourist visa for another 90 days. That was more than enough time for all those snowbirds to escape the cold, dark winter months. Investing in that new condo would have meant no hassle enjoyment of your part time ticket to paradise!
Well that was the good old days when it was easy. On 25 May 2007, new tourist visa regulations came into effect that now limits your stay to 30 days. Sure, you can apply for a 60 day extension by going to the immigrations office. How hard can that be? Just go down to the office, stand in line, deal with an underpaid, under appreciated government clerk (think New York City Department of Motor Vehicles and by the way. how’s your Spanish?), give them your passport for two days and hope the immigrations office extends your visa another 60 days. Another option if you want to stay longer, is to just pack up the Bermuda shorts and flip flops and head out of the country for at least 72 hours so you can return to enjoy that $250,000 condo you just bought (and thought you would be spending the winter in).
To add confusion and uncertainty to the problem, the Panamanian immigrations department has been going out of its way to say that they plan to review each and every 60-day extension request. What does that mean? Well, here’s what the United States Embassy is saying about the situation:
“As of May 25, 2007, tourists are allowed to stay in Panama for 30 days. If they want to stay longer, an extension for up to 60 days (for a total of 90 days in country) from the Panamanian Migration Office is required. Please note that the approval of the extension falls under the Panamanian Immigration Office’s discretion”.
Clearly, the US Embassy is emphasizing that the extension of the visa is discretionary and not automatic. Something you might want to think about before plunking down a deposit on that pricy winter escape.
WELL, AT LEAST I HAVE MY PRIVACY
So, what exactly is going on here? Why in the world would the government make it harder, not easier, for people to buy homes in Panama? Perhaps we can get some insight by looking at what some of the officials at the immigrations department are actually saying.
According to a recent interview by Sub-Director of Immigration Lic. Garcia Tobar, "tourists are those people who come here to visit for a short time, not to live here as a perpetual tourist. Those days are over”. OK, so vacation home owners are not considered tourists. He went on to say “…we are going to require people to register and to normalize their immigration status under one of these (immigrations) programs”. Apparently, it’s “normal” for a vacation home owner in Panama to apply for residency in the country where they buy property and want to spend just 3 or 4 months per year.
Well, what exactly are these “programs” that Lic. Garcia refers to? Panama has a variety of visa programs for foreigners wishing residency status. The two most popular, and applicable to vacation and second home buyers, are the “pensionado” visa and the “person of means” visa.
To qualify for the “pensionado” visa you must be able to demonstrate a minimum monthly income of $500 from a qualified private or government retirement plan. Add $100 for each dependent with you.
What, you’re not near retirement age so you don’t have a pension? Well, there’s always the “person of means” visa. If you have an extra $200,000 sitting around that you’re willing to put in a time deposit in the National Bank of Panama for five years, this might work for you. Or, you can purchase a home or condo for $200,000 and qualify for the visa. Perfect you might say, since this is almost exactly the amount you were thinking about paying for your new condo. Oh, but there’s a catch. To qualify for this visa, the home purchase must be in your personal name. What happened to that promise of privacy that Panama has been promoting for so many years? It goes right out the door when you register the title (and the price) of your new condo in your own name in the public registry to qualify for this visa. Not only will this be disclosed to the Panamanian tax authorities, but also anyone (from anywhere) can tie your name to your personal property. So much for protecting your assets.
Could there possibly be any connections between the new restrictions on the tourist visa and the disclosures required in the “person of means” visa? Could it be that the Panamanian government is trying to identify the foreigners buying all this property in Panama instead of the nameless corporations being bought and sold in taxless transactions?
DEVELOPERS, YOU’RE NOT OFF THE HOOK EITHER
Panama, a land of untapped opportunity. With hard work, determination, vision, some money and a little luck, an enterprising person could really make something happen in Panama. Small developers, tired of all the regulations, hassle, taxes and fees associated with building in the United States, were drawn to Panama as a place to create a vision and build a project that reflected their dreams and stand as a legacy to their achievements. With luck, they might even make a little money. Sure, things don’t run the same way in Panama as they do in the US, but that’s OK. At least there aren’t the hassles, the planning boards to deal with, the countless permits and the endless delays.
And then came Law 6. If you’re a developer and you’re not familiar with this law, you need to be. If you’re a buyer or investor, you should know that the effects of Law 6 will increase the price you pay for property. On the surface, Law 6 was drafted as a reaction to the uncontrolled development in Panama City. Most people, if they’ve heard of the law, assume it just prohibits the sale or promotion of a project without preliminary approval from the Ministry of Housing. While it’s true that Law 6 accomplishes this, it does much, much more.
The law provides for the creation of national and municipal planning boards. Boards that are empowered to review and approve the master plans for developments in their districts. On the surface this sounds logical. However, once you get outside of Panama City, there are very few people with the expertise to adequately review the planning documents, yet they have the power to approve or disapprove a project. These planning boards are the fiscal responsibility of the local municipalities, but they don’t receive any money from the national government. So where are they going to get the money to fund these new planning boards? The answer is simple, from the developers. And if the developers have to pay more, these cost increases will be passed on directly to the homebuyers.
As bad as all this is, the most disturbing aspects of the law are the very broad powers the local municipalities have to levy fees and service charges, do appraisals, expropriate property and demand developers to turn over their roads, common areas and public spaces to the local government. Although these powers may not be enforced, they are authorized under the law and certainly will be used to leverage payments and kickbacks from the applicant. There are no oversight provisions or protections for the developers contained in this law and the opportunity for corruption is undisputable.
After reading Law 6, it will be hard for any foreign developer to consider investing in Panama. The risks are simply too big.
IN CONCLUSION
Why I am writing all this? My business is real estate and my company, Prima Panama, has spent a lot of time, money and effort promoting Panama around the world. It’s in our interest to help make the real estate industry in Panama a success. When we began, Panama offered so much promise. Taxes were low, regulations were minimal, investment was encouraged, privacy was protected and people were welcomed to the country. Today, every one of these benefits is under attack. The whole real estate phenomenon we are witnessing in Panama is happening precisely because of the promise of these benefits. And it can end just as quickly as these benefits disappear. Buyers have choices and when the compelling reasons to invest here are gone, buyers will look elsewhere.
In the Internet age, information travels at the speed of light and events happening in one part of the world are instantly transmitted across the globe. I’m not the only one to notice these events unfolding and it won’t be long before the whole world knows that the Panama that’s being promoted as a welcoming, low tax country that protects the privacy of the individual, no longer exists. The reaction won’t be loud. Rather it will be silent as the buyers, tourists and investors simply stop coming.
But the dangers we face in the real estate industry can be corrected. The government can revise its immigration policy, roll back the poorly written Law 6, facilitate the building permit process, reinstate the tax incentives and create a positive environment for developers, buyers and its citizens. It must also attack corruption and establish a fair, equitable and consistent rule of law.
Sadly, a friend of mine living here recently told me, “I don’t feel welcomed any more”. This is not an isolated feeling and will resonate more and more as people feel the benefits that brought them to Panama no longer exist. When this happens, paradise will truly be lost.
Be sure to go this website http://www.panamarealestateinvestors.com/primare/ and let your voice be heard!
On special - HOT STEAMING CROW!!
Served by Chef MT!!
Congrats to MT, Pedro, Theresa, Lori-Lynne, and all the other Panamersa employees and IR people who had to take a lot of crap throughout this process.
Tomorrow is a new day for everyone who believed in this stock.
Congratulations Gentlemen.
WEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE!!!!
Yup - trying to catch up and comprehend.
WOW.
WOW!!!!