How you
going to keep them paying 50% of their profit out in taxes, when they can
host offshore? It may come as a wake-up call to some, but for most
of us, there is little question that Offshore eCommerce is
the wave of the future. Playing offshore games of hide & seek is no
longer de rigor - Today's web-smart cognoscenti turn to offshore
webhosting and offshore eCommerce. Once a thing of the future, offshore
eCommerce is now a reality in Panama, with many exciting innovations coming
online. The author of this article,
Dr. Louis Sola is the Managing
Director of Berkshire Financial Services and an Adjunct Professor
of Finance at Florida State University. For general questions, you
may contact: info@berkshire-financial.com.
Known as the
crossroads of the world due to the canal, Panama has now given notice to
other offshore jurisdictions of a powerhouse new player in the offshore
e-commerce arena. Panama is already known as a favored offshore
jurisdiction due to its secrecy laws, numerous international banks, and
most notably, the country's official use of the US dollar as it currency.
Using the
same policy that made the Colon Free Zone, the largest true free zone in
the world (Yes, larger than Hong Kong excluding their port), Panama has
all the correct ingredients for a regional and haven for web hosting and
e-commerce. Companies that set up in Panama to do e-commerce can
take advantage of the existing tax and reporting laws, which state that
companies that have their sales outside of Panama are excluded from any
form of income tax or reporting requirements. This in essence creates
a Virtual Free Zone where firms can host their e-commerce companies or
divisions. The three largest sectors for these new companies are the Colon
Free Zone,The Corozal Processing Zone, and the Technology Park in the City
of Knowledge: As mentioned earlier, the Colon Free Zone is the largest
such zone in the world and is in the process on embracing global e-commerce.The
Corozal Processing Zone, and the Technology Park in the City of Knowledge:
As mentioned earlier, the Colon Free Zone is the largest such zone in the
world and is in the process on embracing global e-commerce.
The Corozal
Processing Zone and the Technology Park of the City of Knowledge are
located on former US military bases of Corozal and Clayton respectively.
All three
of these locations offer a tax-free enviroment on sales and duties for
importation. The Corozal Processing Zone also offers incentives
for companies to provide a finishing or assembling for which products can
be shipped safely and efficiently to consumers.
The Technology
Park of the City of Knowledge (http://www.ciudaddelsaber.org.pa/en/technopark/)
is the newest player but the one making the most noise.The City of Knowledge,
sponsored by the International Development Bank and with help from the
European Union, is split into academic and high technology sections.
Some of
the residents are: The Smithsonian, Florida State University, JD Edwards,
Cable and Wireless, Citibank, Xerox, and many others.
And their
plans to have the largest web-hosting farm in Latin America.
Altec (http://www.altec1.com/)
has under construction a system to connect the Atlantic and Pacific fiber
optics cables allowing Panama to have the fastest connections to South,
Central, North America, Europe, Africa, Australia, and Asia. A true
cross road of the world.
In a effort
to draw more pure play internet and brick and mortar companies to Panama.
The City
of Knowledge has enlisted the service of respected industry experts
in structures and banking. Our firm, Berkshire Financial Services, has
been the only financial firm thus far admitted in the Technology Park.
With affiliations in hand with one of the largest banks in Panama, Cable
and Wireless, and Altec, offshore and regional e-commerce is not only for
the fortune 500.Through our subsidiary, First Antilles, a company can have
an offshore dollar based e-commerce solution quickly and economically.So
far, average complete set up time has been under 30 days including due
diligence.
The service
is only offered to Panama based companies so firms will need to incorporate
in Panama first. Then companies must undergo a 7-day due diligence period.
If the company does not pass, (no gambling or pornography please,) 80%
of the due diligence fee will be returned. After the company passes
the due diligence, the company is processed by the bank for e-commerce
processing. Once the merchant account is set up by the bank, a one
time $400 set up fee and thereafter a monthly fee of $50 is levied by the
bank. After which, very competitive processing rates apply depending on
the merchant volume and ticket item. Our experience has seen something
in the range of 3 to 4.5% with 80 free transactions per month. After
the 80 free transactions, a small surcharge is levied on each transaction,
about .20 cents depending on volume.
