Thread: Moving to Panama and working at home for a foreign company, is it possible?

I was wondering if it'd be possible to work in Panama as an employee of a company located in Germany. I've been told from my boss that if I work abroad I should pay taxes in the residence country. Then what if Panama turns to be the resicence country?

I earn 8000$/month gross income which is what I'd get if I move offshore. I heard that there only panamian-sourced income is taxed, well my income is sourced in Germany.

I am alone with an investment power of over 300k$, what do you think? Is there any hope I could come there and spare taxes, buy or rent an house with Internet and be able to work from there paying no taxes at all?
I would just keep paying my private pension plan.
The purpose of the move would be to pay 0% taxes on my income, just property taxes should I buy something, but this should be even exempt for some years.

Any suggestion, observation?

Correct. You will be paying 0 % employers tax and 0 % personal income tax.

However, the employer in Germany should add the employers tax to the gross first. I am not sure what it is in Germany but I know it's around 30 % in many other countries in Europe.

So, they should pay you 8000*1.3 = $10,400 per month.

I would recommend that you do this through a Panama corporation and send them invoices to keep things a bit cleaner. Where is your passport from? Depending on passport and previous redidency you could be taxable in Panama for some time anyway.

Best wishes, Ed
PANAMA BANK GUIDE - LIST OF BANKS IN PANAMA

8k$ month is already my gross income so I wouldn't have to add 30%.

I heard people living there out of nothing like 500$/month so it'd be pretty good for me. I also heard houses are not so expensive like in Europe. I wonder if there is any English speaking lawyer I could phone and ask details on this, I am very curious and it sounds very strange that something like this could be done. Are there any other retirees or expats doing the same thing?

I mean should come live there, why doesn't Panama ask me taxes?
I know Panama hasn't the worldwide-income taxation concept like most other world countries, but it still sounds weird to me.

Thanks for valuable hint and infos.

Originally Posted by Marzullo

8k$ month is already my gross income so I wouldn't have to add 30%.

Your gross income is irrelevant. What matters is the cost to the employer in Germany when you are present in Germany.

An an employer in Europe always pays other taxes on top of your gross salary that goes to social security, medicine and such. You have to go after this portion as well. That's the money that you will now have to put aside privately to get a pension!!!

Originally Posted by Marzullo

I heard people living there out of nothing like 500$/month so it'd be pretty good for me. I also heard houses are not so expensive like in Europe. I wonder if there is any English speaking lawyer I could phone and ask details on this, I am very curious and it sounds very strange that something like this could be done. Are there any other retirees or expats doing the same thing?

Sure, you can rent a room in the slums for $50 a month and get a cableonda cable into the window. Or you can rent a 2 BDRM apartment for $2500 per month with a live-in maid that cooks and clean for you.

Originally Posted by Marzullo

I mean should come live there, why doesn't Panama ask me taxes?
I know Panama hasn't the worldwide-income taxation concept like most other world countries, but it still sounds weird to me.

Very few countries have the abusive world-wide income taxation concept requiring immediate shredding of passports when moving to another country.

Panama only taxes locally sourced income.

Why? Well, they don't have a carrier fleet armed with nuclear war heads so they can't really take a flight to Switzerland and demand ALL ACCOUNT RECORDS for their passport holder like the USA can.

Ah ok sounds good.
Yes for 2500$ all serviced should be fine heheh :P
I also heard that I should go away every 90 days and come back, is it correct? Is this really enforced? What if I declare myself to receive a pension and not a salary?

I wonder if what is described here is still in vigor, document of 2006.
Looks like I should move out of the country every 255 days or so.
Is my income considered earned in Germany if I work from there remotely through the internet?

I read:

It is considered as Panamanian-sourced income, and therefore generate within the
territory of Panama, the income arising from the exercise of professions,
occupations and all kind of performances of services by individuals within the
territory whenever the taxpayer receiving income has remained consecutively or
alternatively in Panama at least for seventy (70) percent of the days of the calendar
year which means 255.5 days in Panama."

This may turn into a really interesting discussion but there must be someone who knows this stuff.

I could obtain a passport from Germany, Italy or even Switzerland.

Thanks for info.

Page 68 in that document is what is important.

Specifically: "Income from directing transactions which are concluded or produce effects outside Panama from an office in Panama (b)."

This would mean:

1. No employees in Panama.
2. No phyical products in Panama.
3. Nothing being shipped into or from Panama.

As long as you don't deal with Panama in any way whatsover there would be no taxes for your work.

You need to leave the country every 90 days or you will be fined and possibly denied entry to the country in the future.

So leave the country and come back the day later? -_-
Where is this 90 days limit indicated?
Any hope to get a visa as a retired?

Are you currently a resident or citizen of Germany? You may have to still pay taxes to your country of legal residence, even if you are living temporarily in Panama. Depends on your laws, check the laws in your country. You would not have to pay income taxes to Panama.

Have you ever been to Panama?

The document you linked it a bit outdated. Today it´s 90 days.

Then you take a bus up to Costa Rica and stay at a resort for 72 hours and go back in.

If you can prove more than 1000 dollars in retirement benefits they will give you a pensionado visa. You can stay in the country while they process.

Observe that you need birth certs and police records from the country where you lived in the past 2 years, by ways of the Panama embassy.

Originally Posted by Marzullo

So leave the country and come back the day later? -_-
Where is this 90 days limit indicated?
Any hope to get a visa as a retired?

Never been in Panama. I currently reside in Germany but my nationality is Italian.

---------- Post added at 04:13 AM ---------- Previous post was at 03:09 AM ----------

Originally Posted by Panama Verde

Depends on your laws, check the laws in your country. You would not have to pay income taxes to Panama.

My country just needs a prof that I reside there in Panama, that's all so my company can give me all the taxes also with my income.

Problem now is, i need to residence proof which tells I reside in Panama somehow.
Is it possible to apply for a Visa or a Permit to do this trick?

Electric bill should work.

theres also an special permanent residency permit just for Italians. (Convenio Panama-Italia)

http://www.panamatramita.gob.pa/tram...p?id_tram=2620

I see, thanks.
I open another thread for this question.

Marzullo, to be extra safe, I would open up a offshore bearer share corporation, [like in Cayman or Beleize, and get your German employe to hire that corporation and pay that corporation consulting fee's or like a contract.

Other wise who knows, the German Govement might come back and say that since your employee is in Germany, and you are a resident there before, you never severed all your ties to Germany, and you should be paying German income tax, since you still have a srong connection to Germany through your income, I know in Canada this is the way it is.....

And Germany might be doing this way to, or in the not to distant furture as laws are changing so fast these days...

Then you should be really safe, since f you own an offshore coporation that is not located in Germany or Panama... although a Panama corporation would also be safe, this way with rules or law changes you would be safer.

Originally Posted by BEL-AIR

Marzullo, to be extra safe, I would open up a offshore bearer share corporation, [like in Cayman or Beleize, and get your German employe to hire that corporation and pay that corporation consulting fee's or like a contract.

Other wise who knows, the German Govement might come back and say that since your employee is in Germany, and you are a resident there before, you never severed all your ties to Germany, and you should be paying German income tax, since you still have a srong connection to Germany through your income, I know in Canada this is the way it is.....

And Germany might be doing this way to, or in the not to distant furture as laws are changing so fast these days...

Then you should be really safe, since f you own an offshore coporation that is not located in Germany or Panama... although a Panama corporation would also be safe, this way with rules or law changes you would be safer.

What is the most cost effective way to become a resident of Panama-I have removed my residency for tax purposes from my origin country and currently been travelling around latin america-i am a day trader so i am self employed and therefore Panama offers a desireable residency choice because of tax situations-how long must one stay in Panama yearly(minimum) to keep residency once aquired. Whats the cheapest way to achieve this process?

The self-solvency visa would be the easiest way by far.

Just put 300,000 dollars into 3-year CDs with a few different banks and you are good to go.

Once you have done that and received the certificates from the banks the attorney should cost $500 or less.

Best, Ed
PANAMA BANK GUIDE - LIST OF BANKS IN PANAMA

Originally Posted by caribeman

What is the most cost effective way to become a resident of Panama-I have removed my residency for tax purposes from my origin country and currently been travelling around latin america-i am a day trader so i am self employed and therefore Panama offers a desireable residency choice because of tax situations-how long must one stay in Panama yearly(minimum) to keep residency once aquired. Whats the cheapest way to achieve this process?

Thanks for info...

Do you have any recommended reliable sources with low fees for setting up an online brokerage account for stock trading in the North American markets. I am not an Amercian nor resident of.

Use a US one, give em a W8-BEN - should be a few free ones. I use Scottrade and Ameritrade in the US. Thales in Panama.

Problem is they all withhold 30 % tax on dividends so have to file tax returns regardless......

I thought the %30 withholding was a final tax so there would be no need to file a return. Is it really just easiest to have a US brokerage account?