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Panama residency and corporation for online affiliate marketing?

rudydew

rudydew

Offshore Agent
Jan 31, 2013
4
0
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#1
Hi all ,

I am looking to move away from europe and in a more tax friendly country.

Panama seems like a good destination to me, i like the place, they have no tax on foreign earned income, getting residency is easy, and there is no requirements to stay more than a certain time each year, in case i wanted to go on a long trip.

I get paid by us based companies like amazon, google, and other advertising platform for affiliate sales (commissions) generated on my english speaking websites, by wire transfer.

A Lawyer advised me to get the residency under the friendly nation visa, and start a panama corporation, which they say they can apply the overseas income rule to my foreign customer payments, basically paying 0 percent tax.

It seems like a good plan on paper, the only problem I have is that amazon (my main source of income) won't send wire transfers to a bank account outside the US or Europe.

I contacted transferwise to see if they would be able to help, but they say that they won't provide usd payment details to a panama corporation

Although the lawyers said that many of their customers do use transferwise, I'm not sure how they do it.

What do you think? Is the Panama setup and residency a good idea for online businesses? (I would really live there, not just on paper)

Is there a better way or a special trick to get paid there?

Thanks
 
#2
rudydew said:
What do you think? Is the Panama setup and residency a good idea for online businesses? (I would really live there, not just on paper)
Click to expand...
Why dont create a US LLC for just opening TW/Payoner/Mercury for collecting from Amazon? Then you can transfer to Panama
 
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#3
GiGoGo said:
Why dont create a US LLC for just creating a TW/Payoner/Mercury for collecting from Amazon? Then you can transfer to Panama
Click to expand...

You mean transferring directly to a personal account in Panama, and somehow declaring this as foreign dividends?

I understand that I need to create and maintain an active business in Panama to get the friendly nation visa?

Also I'm not sure that I wouldn't be required to pay US taxes if using a us llc to get paid by us customers?

A bit worried to get in trouble with the IRS or get sued for any reason there..
 
#5
rudydew said:
A bit worried to get in trouble with the IRS or get sued for any reason there..
Click to expand...
Just pay your fees every year and keep the books. If you don't like US, another way is create a UK LLP for international business and receive USD transfer, then make it pay to your Panama company while keeping the profits low
 
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#6
GiGoGo said:
Just pay your fees every year and keep the books. If you don't like US, another way is create a UK LLP for international business and receive USD transfer, then make it pay to your Panama company while keeping the profits low
Click to expand...

Nothing against the US at all, just not sure I really understand the tax implications and risks. I read about Form 5472 for foreign owned LLCs reporting and it seemed complicated, if I could use only the panama corporation it seems more clean and less complicated to me.

Maybe there is another solution than transferwise to get paid directly to the panama corporation without the need to create another company?
 
#10
rudydew said:
It seems like a good plan on paper, the only problem I have is that amazon (my main source of income) won't send wire transfers to a bank account outside the US or Europe.
Click to expand...
To be honest you probably don't want an account in Panama anyways, they use USD and all transfers go through US and they have become very very strict with everything. So it may actually be better for you to have an account in Europe or US (if you're able to get one) than in Panama.

Also as already mentioned, you can live in Panama and have a company elsewhere.

(btw USD account in Panama and sole proprietor licence in Panama - which are discussed above - are probably not best ideas)
 
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#11
KJK said:
sole proprietor licence in Panama
Click to expand...
Do you mean he'd need a license in Panama if he's only receiving income from outside Panama? What would be the issues if doing it without this license? And why do you say it's not the best idea?
Amazon will not ask you to have any license in foreign country.
 
#13
rudydew said:
Hi all ,

I am looking to move away from europe and in a more tax friendly country.

Panama seems like a good destination to me, i like the place, they have no tax on foreign earned income, getting residency is easy, and there is no requirements to stay more than a certain time each year, in case i wanted to go on a long trip.

I get paid by us based companies like amazon, google, and other advertising platform for affiliate sales (commissions) generated on my english speaking websites, by wire transfer.

A Lawyer advised me to get the residency under the friendly nation visa, and start a panama corporation, which they say they can apply the overseas income rule to my foreign customer payments, basically paying 0 percent tax.

It seems like a good plan on paper, the only problem I have is that amazon (my main source of income) won't send wire transfers to a bank account outside the US or Europe.

I contacted transferwise to see if they would be able to help, but they say that they won't provide usd payment details to a panama corporation

Although the lawyers said that many of their customers do use transferwise, I'm not sure how they do it.

What do you think? Is the Panama setup and residency a good idea for online businesses? (I would really live there, not just on paper)

Is there a better way or a special trick to get paid there?

Thanks
Click to expand...
I live in Panama. I'd advise not to trust most of the lawyers here! (Well, anywhere for that matter, but Panama is more notorious for incompetent and/or crooked lawyers.) And since Panama is on the "gray list," banking is difficult and burdensome. Not to mention expensive (compared to the US anyway).
 
#14
Greetings,

If you receive funds through Amazon associates, the way go to is Payoneer. I've been receiving Amazon affiliate money through Payoneer for quite some time, instant payments, 0 fees.

If you will move to Panama you can also just go to the US, open a personal bank account and receive much of the affiliate payments through this account, although many affiliate networks and specially Google will not accept to pay into an account outside your country of residency.

Then, for everything else that is possible, get an EMI for your Panamanian company and live happily ever after (but don't keep too much money on the EMI).
 
#15
AFAIK if you use a Panama company for anything, the income will be treated as local Panama income which will be taxed.
You only create the company to get the visa, then you use another offshore company for your operational business. That company then pays out dividends to you as a Panama resident. Only then that income is not taxed in Panama.
 
#17
rudydew said:
.................

I contacted transferwise to see if they would be able to help, but they say that they won't provide usd payment details to a panama corporation

Although the lawyers said that many of their customers do use transferwise, I'm not sure how they do it.

What do you think? Is the Panama setup and residency a good idea for online businesses? (I would really live there, not just on paper)

Is there a better way or a special trick to get paid there?

Thanks
Click to expand...
As someone exploring a similiar set-up, I'd be very interested to hear the outcome of this, what banking residency solution did you end up with?
 
#19
Panama said:
I’ve heard Wells Fargo bank in the US accepted Panama companies, so you can use it for Amazon payments. Cheers!
Click to expand...
That may be true but something you know or just "heard" ?

Maybe
GiGoGo said:
Why dont create a US LLC for just opening TW/Payoner/Mercury for collecting from Amazon? Then you can transfer to Panama
Click to expand...
What's wrong with this setup?
 
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