Offshore/ onshore companies in Panama

Panama is known for its offshore corporations around the world, and most of the people (even its most frequent users) think of them as the offshore company per se, as opposed to the onshore company.

This thught is not far from the truth, but it is not quite accurate.

it is true that the treatment one can give a company will render it on or offshore, but actually the scturcture is the same. For instance, there will be no difference, in the essence of the incoporation deed of an offshore company or a distribution company that operates in Panama with all its employees.

The difference will be the activity carried out in Panama, and the activity carried out offshore.

The main situation from that activity is that Panama has a territorial principle that rules its taxes. Any activity carried out offshore, which produces revenues, these revenues won't have to be declared in Panama, whereas the ones carried out here, will have to be declared and will pay taxes. The same happens with the commercial license tax; a company with a commercial license will have to pay taxes based upon its operation (the one that the issuance of the license was based upon), aside from its revenues tax.

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