Portfolio and asset diversification is always a prudent investment decision, but relying solely on securities or financial instruments isn’t always a great idea. There are plenty of other valuable commodities you can invest in, especially considering the inverse economic relationships between securities and commodities. Gold, Silver, and Teak are some of the most stable commodities you can invest in, even if your local stock markets aren’t plummeting. So let’s delve into the tax benefits of precious metal investments in Panama.
Diversifying your SDIRAs or financial portfolios is one thing, but a wise financial strategy also reduces your overall tax burdens. This is why moving your precious metal commodity transactions to Panama is the right move. Why would anyone want to go through cumbersome tax payments, when it’s just simpler to move your investments abroad to make profits without worrying about state intervention?
A lot of my clients have asked me what they’re investment options are, and a few others have come asking me for tax advice on their commodity investments, well first thing is to run it past a good CPA who understands the offshore markets (like this one), but one of the other things I invite them to do is to move their investments to Panama because it’s one of the most commodity friendly jurisdictions in the world. This article will identify why you should move your investments to Panama, and the possible ways you can avoid paying duties and taxes to reduce your overall tax burdens.
Why Invest In Precious Metals?
It’s really a no-brainer why anyone should invest in precious metals as part of their investment portfolios. Gold, silver, platinum and palladium are historically considered to be some of the most valuable commodities to possess. EY recently published an article assessing the state of global commodity markets pointed out that the total deal values in the markets rose by 55% in 2018. These trends are expected to hold steady over the next few years, pointing out an increase in the demand for precious metals and the robustness of the market itself.
Considering these trends, it’s safe to say that precious metal investments are some of the safest options across the spectrum of investment options. The question then becomes how you can maximize your returns on precious metals transactions and where is the best place to invest your gold in.
Panama: The Perks Of A Free Trade Zone
Panama is one of the few countries in the world that testify to the success of financial and economic mobility as a way towards economic growth. I, for one, would love to see more economic liberty and less state intervention that’s become the status quo over the past decade or so. Since 1948, when the Colón Free Trade Zone was established, Panama has become the center of much of the trade between the Americas and the rest of the world. This wouldn’t be possible if the state hadn’t repealed many of the near-extortion taxes and duties imposed prior to 1948.
When the Panamanians later established the Panama-Pacifico Free Trade Zone, there was no better opportunity for businesses and entrepreneurs to enjoy tax benefits. The Panamanians have made globalization and mobility as their vehicle to economic prosperity, bringing in nearly $2.09 billion of FDI into the country every year. The reason for this is that Panama, and especially it’s free trade zones, have some of the lowest tax rates in the world. But what does this mean for the perpetual traveller? It gives you a great place to park your investments, without having to worry about any taxes and potentially even get a second passport from the government of Panama and great tax benefits for your precious metal investments in Panama.
The Panamanian Tax System
Whether it’s individual taxation or corporate taxes, the Panamanian tax system is one of the friendliest in the world. The state doesn’t charge any capital duties, companies aren’t taxed for any foreign-derived income, with a VAT of 7% and there’s the huge list of tax treaties the country’s signed to make import/export easier. The tax rates relevant to your precious metal savings is their capital gains taxes, where the Panamanian government doesn’t charge any capital gains taxes at all. This means that any profits you make on your precious metal sales will be your own with the state letting you keep the full amounts.
What Does This Mean For Your Precious Metals Holdings?
Central America has become one of the major centers of precious metal trading in the world. Back in 2018, the volumes of exported goods increased by 353% from Central America, with most of it ending up in North America—including the United States and Canada. Panama, as one of the leading economic players in the Central American continent, stands at the very center of all commodities trading in the region.
If you were to buy gold in Panama, because of the negligible capital duties and relatively lower value-added taxes (Scandinavia has an average VAT of 26%), you can make a fair bit of money. Anyone looking to raise the valuations of their portfolios should definitely invest in the Panamanian precious metals markets, making greater profits and avoiding taxes. Assuming you were investing in the US, you’d have to pay up to 28% on your capital gains—in Panama, there is no capital gains tax.
Where Should You Buy And Hold Your Gold?
There are plenty of depositories in Panama where you can hold your precious metals. The Fort Kobbe Depository, for example, is one of the safest precious metals holding services in Panama. They run a state-of-the-art holding service, where they store your precious metals including jewelry and gold coins keeping them safe from exorbitant tax rates. If you want, they can also buy gold for you to place it in their precious metal vaults
There are very few investments that are as safe as those in precious metals. With the continuing growth in transaction values of precious metals, and with the advantageous location of Panama in Central America, you can’t go wrong storing your gold there. At the end of the day, as a perpetual traveller and someone looking to preserve your wealth, you must expend all your resources to make sure that you sustain your financial well being. Moving your gold investments and/or converting your assets into precious metal holdings in Panama is one of the best ways to make that happen.
I hope you enjoyed this article: Tax Benefits of precious metal investments in Panama.
Are you ready to make the move to Fort Kobbe and Panama? Contact their office HERE, and one of their experts will be in touch within 24 hours.
Here are a few articles about Fort Kobbe and why investing here in Panama is the best solution for your precious metals safety!
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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