Panama trading

[Cari]

Hi!

Will a Panamanian company that is engaged in crypto trading be taxed in Panama?
If yes, what would be the best set up for crypto trading via a company (could be foreign company) for someone living in Panama?

 

[ImKing]

Depends on where you trade, if the trading is international crypto trading and take place outside of Panama it is tax free.

It doesn't matter which company form you setup.

 

[JackAlabama]

Hi!

Will a Panamanian company that is engaged in crypto trading be taxed in Panama?

no but it must be all outside PA.

If yes, what would be the best set up for crypto trading via a company (could be foreign company) for someone living in Panama?

A company which gives you the least compliance issues.

 

[Cari]

no but it must be all outside PA.

A company which gives you the least compliance issues.

but how to distinguish whether its outside or in Panama?
the trading will be physically done by someone who lives in Panama.
Crypto has no physical location.
So will it be considered as taxable operations in Panama or not?

 

[Sols]

but how to distinguish whether its outside or in Panama?
the trading will be physically done by someone who lives in Panama.
Crypto has no physical location.
So will it be considered as taxable operations in Panama or not?

You're not going to be able to get a clear, simple answer to this question. If you go by the letter of the law, it might be technically taxable in Panama. But if the crypto exchanges are located outside of Panama and the owner/director of the Panamanian company is a foreigner, you'd join a long list of foreigners doing nearly the same thing and no one in Panama cares.

 

[TheCryptoAnt]

If yes, what would be the best set up for crypto trading via a company (could be foreign company) for someone living in Panama?

you can go for SVG or Seychelles if you dont need a bank account and pay yourself in crypto (rather salary of dividends)

 

[Cari]

You're not going to be able to get a clear, simple answer to this question. If you go by the letter of the law, it might be technically taxable in Panama. But if the crypto exchanges are located outside of Panama and the owner/director of the Panamanian company is a foreigner, you'd join a long list of foreigners doing nearly the same thing and no one in Panama cares.

by foreigner you mean just not a Panamanian citizen or a tax resident not in Panama?

 

[Sols]

by foreigner you mean just not a Panamanian citizen or a tax resident not in Panama?

Non-citizen. You might want to add a non-Panamanian company between yourself and the trading activities instead, just to strengthen the argument that the income is foreign-sourced.

 

[Cari]

Non-citizen. You might want to add a non-Panamanian company between yourself and the trading activities instead, just to strengthen the argument that the income is foreign-sourced.

so it would look like: UBO (tax resident in Panama) - owns Panamanian company (only holding) - non-Panamanian company is doing trading. Than there is absolutely no taxes on it, correct?

 

[Sols]

so it would look like: UBO (tax resident in Panama) - owns Panamanian company (only holding) - non-Panamanian company is doing trading.

That could work. Removing the Panama company entirely could perhaps make for an even stronger case.

UBO (PA tax resident) owns foreign company. The foreign company engages in trade. The foreign company pays dividends to the UBO. Income is foreign-sourced, so UBO pays no tax.

Than there is absolutely no taxes on it, correct?

As I said, you won't get a clear, definite answer to this. If you go by the letter of the law, Panama could maybe try to tax you. But would they? Seems very unlikely. Just don't be too obvious about it and don't stir up any troubles in Panama. Keep a low profile, be a good resident.

 

[jafo]

Just don't be too obvious about it and don't stir up any troubles in Panama. Keep a low profile, be a good resident.

This is 100% one of the best advice on this forum!