Corporations and individuals in many nations, citizens of European nations and the U.S. in particular, are becoming increasingly alarmed at the intrusiveness of their governments.  Contrary to the popular press’ ignorant mewlings, tax avoidance (which they always confuse with tax evasion, which I think they do purposefully), is usually NOT the major motivating factor in the decision to seek safe harbor for one’s assets in a “tax haven.”

Because the desire for privacy and the desire to keep what they have rightfully earned IS the major motivating factor, we should really begin calling them “Privacy havens.”  People have worked hard, and played by the rules, their entire lives only to see the fruit of their labor threatened.  The best alternative people can see is to move their assets offshore to countries that still respect privacy and private property rights.

The Republic of Panama has long stood out as an offshore privacy haven and financial center.  The ability of non-residents to own bank accounts, Panama Corporations (IBCs), Private Interest Foundations and to use other privacy methods creates a business-friendly and investor-friendly environment.  Panama has never taxed non-resident income and Panamanian courts have a solid record with regard to respecting private property rights.

Panama is currently seeking to strengthen trade relations with the U.S. and there is speculation that Panama will be asked to become more transparent in its banking practices.  Global initiatives in the enforcement of banking transparency will likely mean that Panamanian banks will begin to co-operate in tax evasion investigations. Tax evasion through the ownership of non-declared bank accounts is rapidly becoming a thing of the past; anyone who tries this is likely to be caught, fined, and perhaps jailed.  I recommend that persons with undeclared bank accounts take immediate action to legitimize their situation.

Even if Panama does yield to some of these pressures, the culture of privacy that still allows anonymous corporations, controlled only by bearer shares, is not likely to vanish; the culture that welcomes foreign capital will not disappear.  Panama will still have a lot of attractive qualities in international tax planning and asset protection strategies.  In 1995, the Panama Private Interest Foundation was created in law, based on the European asset protection tradition of the Liechtenstein ‘Anstalt’ or Family Foundation.

With a little planning, you can utilize one of the greatest privacy strategies in existence – ignorance!  What someone does not know, they can not reveal.  The privacy elements in the law allow a Foundation to be structured such that no record about the client or beneficiary is held in Panama.  Even in the unlikely event that legal force such as a court order is rendered, the nominee director has no information of value. Keeping the Foundation, the assets, and the records in several different jurisdictions adds layers of privacy.  The topics of layering and jurisdiction shopping are complete discussions in themselves.

In summary:  We feel that even though the banking climate is changing, our clients will still be able to use Panamanian offshore investing and banking services as a means of legally protecting what is rightfully theirs well into the future.