Bank Account – One of the first places to start with asset protection is with an offshore bank account in a favorable jurisdiction. A favorable jurisdiction is one in which bank secrecy laws are in place without a lot of loopholes found in many formerly good jurisdictions that have gone bad. Bank secrecy laws in Panama call for prison sentences and/or fines for any bank employee, officer or owner who divulges any information about a bank account or account holder(s). This generally tends to curtail any leaks of information. The only way the bank can legally divulge any information about you or any bank account associated with you is by court order from a court in Panama. Panama has no tax treaties with any country, does not allow any fishing expeditions from foreign governments, all tax offenses in Panama are civil offenses not criminal and Panama does not pursue fiscal offenses.
In the USA most private detectives have little or no trouble getting bank account information for clients. Their methods are highly illegal but we never hear of any of them getting prosecuted. There are some offshore jurisdictions which tout bank secrecy but there are no laws on the books concerning this matter. This is the case with a fairly popular Caribbean jurisdiction, Belize.
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Panama Anonymous Bearer Share Corporation – This is your second layer of protection. In Panama there is no recording of the owners of the bearer share corporation anywhere. There is no registry to look such things up in with or without any court order. The ownership of the corporation is based on the physical ownership of the stock certificates. These corporations are 100% anonymous. This means when wires travel through the various wire systems no one can determine who the natural persons are behind the corporation. If you title real estate to the corporation it makes the real estate anonymous. The corporation can also own boats, cars, collectibles, and stock trading accounts in addition to bank accounts.
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Panama Private Interest Foundation – The third piece of your asset protection structure is an anonymous Panama Foundation. One of the nice things about Foundations is they have no owner. They are anonymous and the foundation can have confidential instructions to carry out the detailed wishes of the founder. It is like a will and trust in one only better. If you have your Panama Foundation own your bearer share corporation it positions you to say you do not own the corporation because the Foundation does and you could say you do not own the Foundation as well. Remember the other side would probably never figure out who owns the corporation, in other words they may never have any idea that the foundation exists. If the foundation has a name unrelated to you why would they assume it is yours? In Panama the assets of a Panama Foundation are not subject to sequestering, which means the bank account can not be frozen pending some court case.
Governmental Pursuit of Funds
What happens if the government of some country attempts to attach your money in Panama? The world is full of dictatorships and non-democratic regimes. Well this again is a different matter. These cases start with a request for information. The request is made through the embassy officials in the bank’s country. It is a formal procedure requiring the requesting country to cite specific reasons for the information which usually means providing evidence of a criminal case filed in their criminal court system pertaining to a handful of serious crimes in cases concerning Panama (real serious money laundering, narcotics trafficking, child pornography and terrorism). The country would have to show Panama why they need this information, why it is essential to the case and explain why the information can not be obtained any other way. These requests are not favored by Panama and they will comply if the T’s are crossed and the I’s dotted. It usually takes from 6 months to two years for such requests to be granted, if they are granted at all. Granting such requests for a non-criminal case does not fit the terms of the MLAT. The offense concerning the criminal case in the courts of the requesting country must also be a crime in Panama. All tax offenses in Panama are civil, not criminal.
The courts in Panama would eventually issue an order if they felt the requirements were satisfied which the Panama police would fulfill by getting the bank records and they would deliver the information to the requesting country’s embassy. An order typically is for information only. A request to actually tie up the funds in the bank is much rarer and harder to obtain. Panama would not respond to a government that is not a national government such as a city, state or province, or territory. Let me give you a hypothetical example. The bank officer gets a phone call from an attorney representing the state of Texas. The state attorney says he is inquiring about a Mr. John Brown bank account and identifies the John Brown he is interested in. The bank officer then says Sir I am sorry but if I even acknowledged that we did or did not have an account for such a person I would be a criminal under the laws of my country and then politely gets off the phone fast. Or the bank employee can say something like “You don’t want to make me a criminal, do you”. The flustered state attorney would then say well I have a court order for this information, to which the bank employee would respond that the order has no authority in my country or at this bank. See how it works. If the attorney sends the bank a subpoena it winds up in the shredder with no contact to the agency sending the subpoena. If pushed the bank would say they had no idea who sent the subpoena, whether or not is was counterfeit or real, and their laws do not require them to respond since the subpoena was without authority in Panama and it would thus be illegal for the bank to respond. They would not even respond to say they are not going to respond. So if a national government requests information regarding a serious criminal matter (that is also a crime in Panama) using the proper channels in government on both sides and it is one of the four categories of crimes, then it has a chance of eventually being complied with assuming they push hard enough. In Panama all tax violations are not crimes just civil offenses. If it is a civil matter from another country, it will almost assuredly never result in any information being produced. If private attorneys or local (non-national) courts request information or action the chances of anything coming of it are just about zero.
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Panama as a Tax Haven Considerations:
Another aspect of a favorable jurisdiction like Panama is that there is no income tax applicable to you, your corporation, or foundation if you chose to use one. In Panama there is no income tax corporate or personal for offshore derived income, no inheritance tax, no probate tax, no capital gains tax, etc. This of course eliminates any filing requirements with Panama and by default eliminates any chance of a return being audited. Panama companies which do not carry out activities within the Panamanian territory and which do not obtain income from a Panamanian source, are only subject to the payment of a fixed annual tax of $300.00 dollars. It doesn’t get any better than this and even if you have an office in Panama, Phone in Panama, Bank Account in Panama etc. this does not change anything as long as your income is derived from outside of Panama. Examples: You have a website and conduct e-commerce and sell goods/services from a Panama Server but to people who are all not in Panama then you are good in that all your income is offshore derived, you are just collecting it in Panama but it is coming in from non-Panamanian sources. You have a restaurant in Panama – whoops no good now you are conducting business in Panama and your income is from Panama people. Where your company is domiciled is not the key, the key is where your income comes from.
One of the greatest advantages of having an offshore bank account in a favorable jurisdiction like Panama is that no one needs to know it exists. The bank does not check with any credit bureaus or like agencies since that would violate the bank secrecy laws of their country. So the chance of anyone knowing you have the account is pretty low especially if you check your statement online. We always advocate never having bank statements mailed to your home country. Panama bank secrecy is very tight, actually the best in the world right now. If a Panama Bank were to release any information pertaining to you and or your bank account without your authorization it would be a criminal and civil penalty they would be facing plus you could sue the bank for any damages as a result of such an occurrence.
Personal Bank Accounts
Today you will need to show some form of identification to any bank in the world to have your name as a signatory or beneficial owner on any bank account. This is a universal treaty that is complied with all over the world. The ID required typically takes the form of a photocopy of a passport and is notarized. Sometimes it can be faxed in, sometimes mailed or courier sent, all depending on the bank involved. The days of unidentifiable numbered bank accounts are long gone. If you hear of a bank that will open an account without identification rest assured it is not a real bank. The same for Visa or MasterCard, they always require the same type of identification as the bank account. Anonymous Visa or MasterCards is something that no longer exists. Same with corporate credit cards. Now they always have to have a persons name on them in addition to the corporate name. This is mostly so a store clerk can ask for ID to prevent use of stolen credit cards. ATM cards are often issued anonymously with no name on the card. Some do use this type of account as a sort of anonymous bank account having funds wired into these ATM accounts but this is not a solid solution and does not take the place of a real bank account since funds can only be taken out via ATM machines and your ATM account is normally just a sub-account of the master account holder who really has control over your money. It is always safer and easier to open up a bank account using a corporation. Remember the money in the corporate bank account belongs to the corporation in Panama and it will be difficult for a financial enemy to attempt to transfer a personal debt over to a corporation. Just proving you in fact do own an Anonymous Panama Bearer Share Company can be a major hurdle that stops a lot of litigation before it starts. Having a Panama foundation own the corporation makes this even harder for potential financial enemies since you could then say you do not own the corporation and since a Panama Foundation has no owner you would not be lying. They will face a tough burden of proof, a statue of limitations, substantial legal expense, years in court and many other obstacles trying to collect personal debts from a Panama Corporation or Foundation, especially when both are used. Remember assets like bank accounts belonging to Panama Foundations are not sequesterable in Panama which means the other side can not post a bond and get the judge to freeze the bank account pending the outcome of the trial. So this means the other side comes to Panama, hires an attorney here (expensive) starts the action and then guess what, you may be inclined to move the Foundation assets elsewhere during the trial so if the other side gets a court judgment in Panama and you no longer have assets in Panama what good does the judgment do them? Now this is assuming your financial enemies even know about the Foundation. It is not common to see such lawsuits.