I stumbled upon this unique solution when having a chat with my friends Giovanna and Wi Men in Panama City. They run a small family office there, and mentioned they help people open crypto trading corporations in Panama. Such corporations can also be used to trade stocks, and invoice customers for various services.
How does a Panama crypto trading corporation work?
- You create the corporation through Giovanna and her husband. This can be done remotely and takes about one week.
- They then open trading accounts with crypto exchanges. It’s possible to open accounts with the tier 1 crypto exchanges.
- It is also possible to open accounts with precious metals trading exchanges in Singapore, and with major stock brokerages worldwide for conventional stock trading.
- Opening accounts with exchanges requires a lot of paperwork to be filed by Giovanna and her team, so this process can take anywhere from 1 month to 6 months depending on the exchanges, as their compliance reviews can be quite thorough.
- You can then transfer the crypto from your personal accounts to the corporate account (could be a taxable event depending on your tax residency).
- You have to file some regular documentation with the Panama authorities in order to remain compliant, which the team will do for you.
The pros of a Panama crypto trading corporation
- 0% effective corporate income tax rate as long as the exchanges are located outside of Panama.
- Flexible corporate structure, accounts can be opened with various exchanges, crypto or non-crypto.
- The corporation can also be used for other business activities. For example if you need to invoice customers for services, etc.
- It’s a fantastic option for people who are legally perpetual travelers without a tax residency.
- Great option for people who live in 0% tax jurisdictions or in countries with a territorial tax system.
- Panama is a crypto friendly jurisdiction, which expands to other spheres of business life in Panama.
- Great asset protection from lawsuits.
The cons of a Panama crypto trading corporation
- Not appropriate for US people
- If you are a tax resident in a country with residency-based taxation and / or CFC rules, you may run into trouble and might have to pay taxes back home. It’s very important to run such a structure past your local CPA so that he can advise you on the suitability of such a structure. Again, the key target market is perpetual travelers, tax residents of 0% tax jurisdictions, and tax residents of territorial tax systems.
- Panama has a bad reputation with the tax authorities of many countries, so if you live in a place like the EU, make sure to stay away from such a structure, it’ll only create headaches for you.
Make sure to watch this video of Giovanna and her husband Wi Men in which they elaborate on the structure and process
Giovanna and Wi Men can also put you in touch with tax advisors in various jurisdictions to ensure that you remain compliant with such a structure.
If you want more information on Panama corporate structures for crypto and stock trading, fill out this form to set up a free call with Giovanna and her team.
Or send her an email requesting to schedule the free call: email@example.com.
Giovanna and her husband can also help individuals open personal bank accounts remotely. Details here on the pros and cons of opening a bank account in Panama.
Other services in Panama:
Articles on Panama
If you want to discuss your internationalization and diversification plans, book a consulting session* or send me an email.
*a consulting session is a discussion about your portfolio and objectives. It does not constitute legal, financial, tax or investment advice.