Thread: Benifits of a Panama Corporation?

I'm selling some websites here in the US, I plan on paying my taxes, but in the end I will have about 150K left.

I make most of my money working over the internet, either website design, seo, etc.

I would also like to look at the possibility of moving to Panama someday.

So here are my questions:

1: For now, living in the US, working online, is there any benifit to setting up a Panama Corp and putting my money in it vs a US corp?

2: If I do open a Panama corp, pay myself a salary under 80K, to my understanding then I would pay US taxes on the 80K but the corp could make more than that but it would not be taxed since the money is made outside of Paname, is this true?

3: Can I pay taxes on my 80K salary, and have the corp own property in Panama that is not taxed by the US, understanding that any property in Panama would be subject to Panama taxes?

4: So final question, if I do buy a business in Panama, I understand I will be subject to Panama taxes, and anything above 80K in the US. But if the Panama corp owns everything and pays for everything, while I take a salary under 80K, will the Panama corp owe any taxes in the US?

Thanks,

Richard

1. Yes, you don't have to do any bookkeeping, pay any taxes, file any returns and other pointless activities that do no relate to your clients.

2. The IRS calls it abusive tax shelters. Of course you will need to pay tax for all of it. You can go to jail otherwise.

3. There are no tax treaties between Panama and the USA. Any taxes paid in Panama will also need to be paid in the US.

4. A business in Panama is taxed based on where the income comes from.

The best is to call the IRS and ask them. They will tell you exactly how they will treat your tax evasion schemes......

Ed,

Thank you for your information. Please understand, I'm not trying to evade any taxes, however I also don't want to pay any more than I have too. What I'm looking to do is possibly move to Panama someday, in that sense, I would like to setup a corporation that can make money while paying as little as possible taxes, so that I can then move down there at some point. However if it’s not feasible, then I will stay in the US and pay my taxes. I've have never not paid my taxes, don't plan on not paying them, but I'm looking at any options that would lessen any taxes that I must pay. I apologize if that offends you, but I believe in keeping as much of my money as possible, since I work hard for it.

Thanks,

Richard

If you resign your US citizenship and relocate to Panama you will pay a fixed rate of $300 in tax per year for your offshore business.

Otherwise, I would recommend that you treat your Panama corp as a US S-CORP with complete flow-through of the income after expenses. Then the IRS has no ins on you, and you avoid the administrative work.

I recommend starting the process to get an alternative passport right away - Paraguay should be the best option to my knowledge.

When you leave the US, regardless of country you have a 95k excemption. You should read publication 54 by the IRS.

So, the question then becomes, if you make 200,000 dollars a year - is having a US passport worth 30,000 dollars per year in taxes? If you know for sure you will stay safely under 95k.... you should hang on to it for sure.

Panama is a place where no income taxes are paid IF your clients are not from Panama. For answers to your questions read My Panama Lawyer: corporation