Panama residency and PE rules

[orangekangaroo]

I am looking at Panama residency. Mainly because of Teritorial taxation. My main businesses will be billing through US/Canada LLC and UK LLP.

These business will be controlled out of Panama. In Panama as all income is from abroad there is no taxation, as the same rules apply for Panamanian companies. So there are no PE rules. I will stay a few months per year in Panama to stay tax resident. I will never stay long enough in another country to became tax resident.

Any thoughts?

I don't like UAE,

Cyprus (non dom) is hard as LLP and LLC pay income, need company in middle to turn Income into divi. Plus PE rules are not clear, for now people get away with it. But for how long. Many companies and therefor bank difficulties. Expensive setup.

Georgia, PE rules will be triggered.

 

[JackAlabama]

orangekangaroo said:
I am looking at Panama residency. Mainly because of Teritorial taxation. My main businesses will be billing through US/Canada LLC and UK LLP.

These business will be controlled out of Panama. In Panama as all income is from abroad there is no taxation, as the same rules apply for Panamanian companies. So there are no PE rules. I will stay a few months per year in Panama to stay tax resident. I will never stay long enough in another country to became tax resident.

Any thoughts?

I don't like UAE,

Cyprus (non dom) is hard as LLP and LLC pay income, need company in middle to turn Income into divi. Plus PE rules are not clear, for now people get away with it. But for how long. Many companies and therefor bank difficulties. Expensive setup.

Georgia, PE rules will be triggered.
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It is ok. Even if you work for non panama company remotely, no tax due.
Their gov gets most cash from the canal, banks and (past) tourism, so they do not really need income tax. it would be more burden to get it than what it is worth.

 

[orangekangaroo]

JackAlabama said:
It is ok. Even if you work for non panama company remotely, no tax due.
Their gov gets most cash from the canal, banks and (past) tourism, so they do not really need income tax. it would be more burden to get it than what it is worth.
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That is good to know. Even the interpretation of Territorial taxation is not the same for each country. Now my only problem would be US bank accounts for LLC with residents in Panama. I don't know if this is an issue with Panama on the blacklist of the EU.

 

[JackAlabama]

orangekangaroo said:
That is good to know. Even the interpretation of Territorial taxation is not the same for each country. Now my only problem would be US bank accounts for LLC with residents in Panama. I don't know if this is an issue with Panama on the blacklist of the EU.
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No, not same definition. even hk and sg have differences.
Well, it can be. eussr does not like panama

 

[UndividedNomad]

orangekangaroo said:
These business will be controlled out of Panama. In Panama as all income is from abroad there is no taxation, as the same rules apply for Panamanian companies. So there are no PE rules.
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Can you explain what you mean here? How are you not triggering PE rules if you operate a UK LLP/US LLC as a Panama tax resident?

I am looking at a similar setup (but with Estonian company instead of LLP/LLC). I do see online that Panama tax residency requires 183 days per year in Panama. If you had to stay 183 days in Panama per year, surely this would trigger PE rules, no?

 

[orangekangaroo]

UndividedNomad said:
Can you explain what you mean here? How are you not triggering PE rules if you operate a UK LLP/US LLC as a Panama tax resident?

I am looking at a similar setup (but with Estonian company instead of LLP/LLC). I do see online that Panama tax residency requires 183 days per year in Panama. If you had to stay 183 days in Panama per year, surely this would trigger PE rules, no?
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Yes there are PE rules, but Panama does not tax income outside the country. The rule is the same for Panama companies. This makes the territorial case different from Georgia.

Tax residence is 183 or permanent residence. You will get permanent residency after 1 year, friendly nations visa. Then you need to stay 1 day minimum a year in country to keep it. Plan it well over the new years period and it is 1 trip every 2 years. My understanding.

 

[JackAlabama]

orangekangaroo said:
Yes there are PE rules, but Panama does not tax income outside the country. The rule is the same for Panama companies. This makes the territorial case different from Georgia.

Tax residence is 183 or permanent residence. You will get permanent residency after 1 year, friendly nations visa. Then you need to stay 1 day minimum a year in country to keep it. Plan it well over the new years period and it is 1 trip every 2 years. My understanding.
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You get it more in like 4 months after filing. But it counts from day 1 of filing. I saw the respective papers.

If you have not been to Panama for some years, your lawyers can get it back for like two years of no show after you have not been there for two years.

 

[orangekangaroo]

JackAlabama said:
You get it more in like 4 months after filing. But it counts from day 1 of filing. I saw the respective papers.

If you have not been to Panama for some years, your lawyers can get it back for like two years of no show after you have not been there for two years.
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I like a warm tropical place to sit out the European winter. All I need to make sure that I have proper running bank setup.

Looks like you got some know how about Panama. I hear rumours that the Friendly Nations Visa program is getting a massive hike, like making 150K investment in a company. Can you confirm this?

 

[M4S]

orangekangaroo said:
I like a warm tropical place to sit out the European winter. All I need to make sure that I have proper running bank setup.

Looks like you got some know how about Panama. I hear rumours that the Friendly Nations Visa program is getting a massive hike, like making 150K investment in a company. Can you confirm this?
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I have heard rumours as well but no one has confirmed it. If covid sticks around I can't see them making too big of changes with other countries putting things on "discount" but you never know.

 

[JackAlabama]

orangekangaroo said:
I like a warm tropical place to sit out the European winter. All I need to make sure that I have proper running bank setup.

Looks like you got some know how about Panama. I hear rumours that the Friendly Nations Visa program is getting a massive hike, like making 150K investment in a company. Can you confirm this?
Click to expand...

I heard these rumors as well, also on Nomad Capitalist channel. But they do not seem to be confirmed nor to be coming so soon.

As @M4S said, with countries running discounts, it seems unlikely, especially since Panama is not that appealing to all and has a bad rep.

 

[Vor]

im also very interested in panama since im planning to move to the Dutch Caribbean which does not have PayPal access.. but panama does so i was thinking get the Friendly Nations visa if possible and setup the business banking + paypal in panama and just visit every once or twice a year since ill be only 2 hours away anyways 🙂

 

[orangekangaroo]

Vor said:
im also very interested in panama since im planning to move to the Dutch Caribbean which does not have PayPal access.. but panama does so i was thinking get the Friendly Nations visa if possible and setup the business banking + paypal in panama and just visit every once or twice a year since ill be only 2 hours away anyways 🙂
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Why don't you use a US LLC or UK LLP which are pass-through entities and you can easily get PayPal on the business. Very cheap to operate.

 

[Vor]

orangekangaroo said:
Why don't you use a US LLC or UK LLP which are pass-through entities and you can easily get PayPal on the business. Very cheap to operate.
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UK LLP would be another great option is it easy to get a UK acc in combination with a non resident LLP?

 

[Fred]

Vor said:
UK LLP would be another great option is it easy to get a UK acc in combination with a non resident LLP?
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If you are only withdrawing from Merchant accounts like PayPal and Stripe - Payoneer is by far the easiest way.

Downside - they don't like 3rd party transfers with bigger amounts and few more restrictions apply.

Toggle signature

 

[Dorothy Atwater]

JackAlabama said:
It is ok. Even if you work for non panama company remotely, no tax due.
Their gov gets most cash from the canal, banks and (past) tourism, so they do not really need income tax. it would be more burden to get it than what it is worth.
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Forget Panama! I live here. The banking system is unbelievably stupid. Criminals get away with money laundering millions but honest people are penalized.

 

[Dorothy Atwater]

JackAlabama said:
I heard these rumors as well, also on Nomad Capitalist channel. But they do not seem to be confirmed nor to be coming so soon.

As @M4S said, with countries running discounts, it seems unlikely, especially since Panama is not that appealing to all and has a bad rep.
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Panama's bad rep is true! Nomad Capitalist is not to believed on many things.

 

[JackAlabama]

Dorothy Atwater said:
Forget Panama! I live here. The banking system is unbelievably stupid. Criminals get away with money laundering millions but honest people are penalized.
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That is how it is working there.

 

[IBO Panama]

Never Trust NC.
I stopped following this arrogant crook 2 years ago.

Vor said:
UK LLP would be another great option is it easy to get a UK acc in combination with a non resident LLP?
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Can you still get Non resident LLP? No bank wanna deal with me.

 

[nethostler]

orangekangaroo said:
Why don't you use a US LLC or UK LLP which are pass-through entities and you can easily get PayPal on the business. Very cheap to operate.
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How would you define easy? I've heard PayPal can be difficult to get for a US LLC without an SSN.

 

[orangekangaroo]

nethostler said:
How would you define easy? I've heard PayPal can be difficult to get for a US LLC without an SSN.
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ETIN is what is needed.