Replies to post #18479 on Havana Roasters Coffee Companies Inc (THRC)

[Investors3]

Interesting article by new CEO of NAFS...there seems to be a lot of tax benefits for investors and foreign companies by doing business with Panama, IMO!

Due Diligence in the Incorporation Business of Off-shore Legal Entities from Panama

Abdiel Castrellón W.Click here to view Abdiel Castrellón W.'s profile
Abdiel Castrellón W.
Corporate Criminal Lawyer and Financial Advisor
Published Apr 4, 2016
+Follow
The Business of Incorporating Companies is Legal
Panama is a country whose main income comes from the services sector. A wide range of corporate and financial services are offered from Panama, which has historically facilitated the carrying out of commercial activities in different latitudes, for this, among other reasons, the country remained stable in the face of global financial debacles.

Panamanian corporations are widely known and used throughout the world. These offer many tax benefits, especially when they are used as corporations or offshore companies or IBC's, as they are called in other jurisdictions, taking into account, in addition, that the Republic of Panama only taxes the income produced locally, this constitutes an incentive for merchants to establish their operations and business platform in the country, whatever they may be. In this way, Panamanian companies serve merchants, investors and foreign companies to achieve significant savings in paying taxes, since Panama uses a tax system based on the principle of territoriality.

Law 32 of 1927, on corporations of the Republic of Panama, applies without discrimination to corporations that conduct business within the Republic of Panama and to corporations whose activity is considered offshore. This makes it easy to manage and manage.

Panamanian legal entities are also commonly used as the instrument of patrimonial protection for the reason that they can serve as a holding company or can own or own all kinds of assets, even helping to facilitate the succession of patrimonial assets.

How the Business of Incorporation and Sale of Companies works
The reasons for requiring a legal entity to conduct business are diverse and in any case, by hiring an experienced Lawyer, he or she will be able to recommend a vehicle that facilitates the development of operations and obtaining the licenses that may apply.

Most of the companies that are sold locally in Panama, have commercial purposes, separation of assets or inheritance issues and are not affected. You can take out your trading notice if you need to trade locally and go ahead. But those whose incorporation is requested by foreign clients who do not physically have a presence in Panama exponentially expand the range of uses applicable to a legal entity, this will depend on the fiscal, commercial or patrimonial obligations that the final beneficiary of each company may have in the respective countries of origin or operation.

The first thing is to clarify that the client is the one who requests incorporation of the legal entity to the Law Firm (which will normally end up acting as Resident Agent). This requester is the source of instructions and who normally makes the payment of the invoices. Some of them have obligations to carry out due diligence on their clients due to the regulations that apply in their countries on account of Financial Licenses they have or Codes of Conduct of Associations and Guilds of which they are a part.

That is, if the client is a natural or legal person who cannot prove having due diligence obligations, to carry out their commercial operations, the Lawyer, in compliance with the applicable regulations in Panama, must request information that allows identifying "reasonably ” to the beneficial owner. On the other hand, if the client provides information that shows that he has due diligence obligations (eg Banks, Trust Companies, Lawyers in some jurisdictions), the regulations allow the collection of information on the final beneficiary to rest on them.

Since the end of the 90's, lawyers in Panama have been required to carry out due diligence, but as of Law February 2, 2011, the minimum information that must be collected is formalized. As of 2015 with Law 23, in Panama it is required that the risk represented by the client and the proposed business for the companies be quantified, this will be more or less easy depending on the information collected. In any case, each Lawyer or Firm is responsible for the risk rating methodology used, as well as for requesting more or less due diligence information based on the risk they manage to identify.

To facilitate the services that a client may require, the main Law Firms in Panama have organized subsidiary companies, in jurisdictions such as the British Virgin Islands, Belize, Seychelles, Bahamas, Cayman, Samoa, Hong Kong, Delaware, Wyoming, etc., etc… . Etc… Each subsidiary must obtain a license in the corresponding jurisdiction in order to incorporate corporate vehicles. In each Jurisdiction there are due diligence regulations to comply with. Normally the licenses are issued by Government Institutions in each country and they are constituted in the Supervisor of the issued License.

Despite the fact that each firm and its subsidiaries constitute an Economic Group, there are corporate and fiscal benefits so that it is not necessary to carry out financial consolidation. Normally no Regulator or Supervisor criticizes the figure.

In the same way, these important firms have offices that operate as points of sale in different parts of the world. The points of sale may be subsidiaries or franchises authorized to represent the Economic Group. Points of sale may or may not have a regulatory body. In any case, the Headquarters and the points of sale sell all the services and products of all the jurisdictions in which the Group has a license.

An incorporation of a legal entity takes several days, depending on the agility of the firm and the corresponding public registry. Therefore, Law Firms and their affiliates (“Groups”) incorporate legal entities and have them on file and ready when requested by a client. Sometimes some do not have a way out because the names are not liked, and these are getting old, the Group then decides whether to risk keeping them active for additional periods and sell them later transferring the charges and costs of all the years since their creation (" shelf companies or shell companies”) or dissolves them.

There may be moral legal debate regarding what may motivate a client to acquire a "Shelf Company", the truth is that today, it is not illegal and regulators are aware of the practice.

In any case, each company owner is responsible for the activities carried out with their legal vehicle. It's like buying a car, if you have resources, you can choose whether to buy a cheap car or a luxury car, or a classic in perfect condition; But if traffic violations are committed while driving, neither the victims nor the customer should hold the car dealer responsible.

The Weaknesses and Risks of the Business of Incorporation and Sale of Companies
The regulations of all jurisdictions require that there be one or more directors responsible for the operations of the legal entity. Since it is more agile to have the company ready to sell, these are constituted using natural or legal persons who act as directors. These are called “Nominee Directors”.

In many cases, clients request to contract the services of nominee directors for an indefinite period additionally, just as they would ask for help with opening a bank account or the virtual office service or correspondence address. These are in my opinion the real risk of the business.

In any jurisdiction, it is "supposed" that the director(s) of each legal entity are the ultimate decision makers, and although many Lawyers "feel" that through an indemnity letter signed by the client it is enough to not being responsible for the legal consequences of the actions of each legal entity, the first logical action that a Judicial Court will take in the face of a crime is to call the directors.

Using the example of vehicle purchase, it is as if the car dealer offered a permanent driver to the customer for the enjoyment of the final beneficiary ( who is the one who turns instructions using the customer ). What happens if the final beneficiary gets off to steal at a gas station and when he returns to the car he enters the car normally and without any surprises asks the driver to take him home?

If the names of nominee directors are common to many companies, they are exposed to reputational risk contagion. Neither the press nor the public easily understands that this humble worker of the Law Firm acts as Nominee Director in 10,000 legal entities for a salary of USD 600.00 per month. Along the way, one or another dies and only until the client requests a new corporate procedure is that the Law Firm will be able to realize that the Board of Directors of the Company must be updated. Let's not lose sight of the fact that the management of the company is the client's responsibility.

In conclusion, yes... it is true, the Groups that act as resident agent must take reasonable due diligence measures to identify the final beneficiary of each legal entity and eliminate the sources of risk that they do not wish to assume. It is also true that while the Law allows due diligence to rest on regulated clients, there is no crime or administrative fault in this proceeding.

The service of nominee directors must be regulated. As it is defined, it lends itself to making minutes of the Board of Directors with retroactive dates regardless of the legal consequences of the decisions made, a serious failure of sound Corporate Governance practices.

All jurisdictions that wish to maintain the figure of the “regulated intermediary client” must introduce the mandatory figure of control tests or “spotchecks”. Regulators must have a sufficient budget to carry out audits ( on-site and off-site) to regulated entities, hiring quality personnel, capable of understanding the business and making recommendations both to those regulated and to the best application of the Law.

It must be understood that not necessarily because a certain commercial or fiscal activity constitutes a fault, in some corner of the world, the Resident Agent has to be the one who has proposed the business... The Resident Agent may have been a victim as well.

When an important client calls and says: " Hello... I want 10 companies please, what names do you have available?" At that time, only he and his respective client (or chain of clients) know what they are looking for and they do not necessarily act transparently before the Resident Agent, which is why they must cover themselves.

https://www.linkedin.com/pulse/debida-diligencia-en-el-negocio-de-incorporaci%C3%B3n-desde-castrellon?trk=public_profile_article_view

[Investors3]

I wonder if NAFS CEO from Panama, was involved in any of this below? I see that the yield sign is now off of this company...

PRESIDENT NAYIB BUKELE ANNOUNCES 44 COUNTRIES TO MEET IN EL SALVADOR TO DISCUSS BITCOIN
NIK 21 HOURS AGO

El Salvador President Nayib Bukele announced that 32 central banks and 12 financial authorities are meeting in the country to discuss Bitcoin.

Late Sunday night, El Salvador President Nayib Bukele announced on Twitter that 32 central banks and 12 financial authorities from 44 countries are to meet on Monday, May 16, to discuss financial inclusion, digital economy, banking the unbanked, El Salvador’s Bitcoin rollout and its benefits in the country.

In follow up tweets, the president announced that the Central Bank of São Tomé and Príncipe, Central Bank of Paraguay, National Bank of Angola, Bank of Ghana, Bank of Namibia, Bank of Uganda, Central Bank of the Republic of Guinea, Central Bank of Madagascar, Bank of the Republic of Haiti, and the Bank of the Republic of Burundi, Central Bank of Eswatini and its Ministry of Finance, Central Bank of Jordan, Central Bank of The Gambia, National Committee of Banks and Seguros of Honduras, Directorate General of Treasury, Ministry of Finance and Budget, Madagascar, and the Maldives Monetary Authority are among those that will be attending.

Bukele added that the National Bank of Rwanda, Nepal Rastra Bank, Sacco Societies Regulatory Authority (SASRA), Kenya, State Bank of Pakistan, General Superintendency of Financial Entities of Costa Rica, Superintendence of the Popular and Solidarity Economy of Ecuador, and the Central Bank of El Salvador will also be in attendance.

On Friday, May 13, the Twitter account for Bitcoin Beach announced that “Central bankers from Angola, Armenia, Bangladesh, Burundi, Congo, Costa Rica, Egypt, Gambia, Ghana, India, Namibia, Senegal, Sundan, Uganda, Zambia and 25 other developing countries are getting on planes today to fly to El Salvador.”

Not long after President Bukele’s official announcement, Bitcoin Beach tweeted out a map of the world that seemingly has countries who have either adopted Bitcoin already and or are attending Monday's meeting filled in with color, saying “Probably nothing.”

It took 12 years for the first country to adopt Bitcoin, around 8 months for the second, and if Panama’s president signs their recent Bitcoin bill into law, then they will be the third only about a month after the second. Now, countries from all over the world are meeting in El Salvador to discuss financial inclusion and how adopting Bitcoin can benefit their countries.

Gradually, then suddenly.

https://bitcoinmagazine.com/markets/el-salvador-president-nayib-bukele-announces-countries-to-discuss-bitcoin