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Ask us your questions or request our information Offshore
Banking
About
Using
Offshore
Trusts
The
Bahamas
Dominican
Republic
Forming
a Panama
The
Panama Offshore
Is
it Better in
Investing
With
About
Y2K
The
Premium
The
Stock Exchange
Dominican
Republic ~Secret Tax Haven
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We often hear clients asking us that very question. Like you, they want to know which is really better. The answer is that it honestly depends upon what you are trying to accomplish and if you in fact prefer the attributes of one in comparison to the other. In other words, neither can be called equivalent. There are both positives and negatives to each one. One advantage that the Bahamas IBC may
have over the Panamanian Incorporation is of course that the documents
are in English. If a client may be looking to use the corporation
as a vehicle for business in other English speaking jurisdictions, then
the Bahamian IBC may be preferable for this purpose. Also, the Bahamas
IBC requires only one director where as the Panamanian Company does require
three. In addition, directors do not have to be recorded or indicated
in the public registrar, where as Panamanian directors are mentioned in
the corporate documents filed with the registrar. Is this a positive
or a negative? Well, if the director is not mentioned in the corporate
filing, then who actually can attest to the person holding rights and responsibility
for the directorship. The answer is the attorney doing the incorporation.
So, while the director's name is not a public record, the proof of who
is the authorized directory may be in soley in the files of a local barrister.
This may be both a positive and a negative, depending upon your point of
view.
Another key difference with the Bahamas IBC is that is receives a tax exemption, but only for twenty years. In addition, the Bahamas IBC is forbidden to engage in business with Bahamian citizens or to own property in the Bahamas. This means that the Bahamian IBC can own bank accounts or investments tax free for the first twenty years, but it cannot own land or engage in a traditional business enterprise in the Bahamas. Since there is no distinction in Panama between a corporation that may be established for asset protection purposes or for an actual business enterprise in Panama, there are no such divisions under the law. In other words, a Panamanian Corporation enjoys a tax-exempt status as long as its business activities and income are derived from sources outside of Panama. So while a Bahamas IBC enjoys a twenty-year tax exemption, A Panamanian Company enjoys a permanent one as long as the previous mentioned conditions are met. In addition, the Panamanian Corporation can own real estate in Panama without restriction. Both of course enjoy the benefits of receiving local bank account interest free from taxation. This discussion is not meant to allude
that one jurisdiction is better than the other - just different.
For example, we know that the law in the Bahamas is based upon Common Law
while law in Panama is based upon Civil Law. Which in reality is a better
domicile? Again, that depends. The Bahamian IBC may be a better choice
for such issues as protection of patents and other intellectual property,
while Panama may be a better choice if the concerns are for protection
from frivolous lawsuits or divorce actions (see information about the Panamanian
Foundation). So in reality, it is not just a question of one
jurisdiction that speaks English vs. another that speaks Spanish.
It really comes down to which one serves the needs of the client.
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