We all know that Delaware and Panama are among the top offshore locations in the world. But being an investor, you also must be having a series of options in your mind where to base your offshore company.
In this blog, we will discuss the differences in offshore companies in Delaware and Panama.
Delaware is one of the fifty states of the United States of America. It lies in the mid-Atlantic region. It is the sixth least populous and second smallest state of the USA.
Panama is a Central American country that has been gaining a reputation worldwide for its respectable corporate and financial services. The government’s documented tax advantages and the promising economic performance of the country are the two factors in which the experts attribute progress. As a result of this, foreigners are more tempted to form an offshore company in Panama.
Delaware Offshore Company
The Delaware offshore company is a legitimate US limited liability company that is internationally recognized and accepted. Investors who wish to trade or invest in a US company have the option of choosing a US company that has the advantage of being tax-free.
In a Delaware offshore company, the assets of the beneficial owners is carefully protected, and the company is subject to “pass-through" or "flow-through" taxation. This means the offshore company does not pay corporation tax, and members are responsible for personal income. One or more members can form Delaware offshore Companies, though it is often recommended the company must have more than two members to benefit from tax exemptions. There is no limit on the number of members to form an offshore company in Delaware.
Advantages of a Delaware Offshore Company
Following are the advantages of a Delaware offshore company:
- Low incorporation fees
- Low administration fees
- Fast incorporation process
- The Delaware offshore companies are not subject to Federal income tax in the United States.
- No requirement of any file accounts
- Well developed Law system in Delaware
- Delaware Offshore Corporations are often used for American trading situations;
- Quick incorporation procedures
- Readily understandable corporate law.
- Delaware will keep your personal assets safe and sound. It will protect all your belongings from various political problems and illegal activities.
- The offshore company will be separated from your personal assets. There is a fragile line between your company's and personal assets, the assistance of a working corporation. You will leave your hard-earned assets at stake.
- Delaware is well known for its business-friendly features. If you wish to go in a smooth way, then Delaware is an ideal pick for you.
- Delaware maintains an entirely separate court for all the business-oriented conflicts. The Chancery Court makes sure that the cases are resolved properly and quickly.
- The minimum capital needs in Delaware are something that you need not worry about. So, Delaware is the best place to open an offshore company.
Advantages of a Panama Offshore Company
Panama offshore companies share certificates that can be issued in bearer form with or without par value.
No Reporting Requirements or Taxes
A Panama offshore company does not impose any reporting requirements or taxes on non-resident Panamanian companies.
No Piercing the Corporate Veil
A Panama offshore company does not allow "piercing the corporate veil," which is why your corporate books are maintained 100% private and confidential by law.
When a Panama offshore company appoints nominee directors for the entities that they establish for their clients, they always provide their clients with pre-signed, undated letters of resignation from the directors.
Favorable Incorporation Laws
A Panama offshore company offers the most favorable and most flexible incorporation laws in the world.
Strict Privacy Laws
Panama has one of the most reliable banking and corporate book secrecy laws in the world. Privacy and confidentiality are not only respected but also vigorously protected by constitutional law in Panama.
Panama has the most stable government in all of Central or South America.
Features of an Offshore Company in Panama
- No corporate taxation in a Panama offshore company.
- There must be a registered office in Panama.
- Minimum government fees excluding tax is the US $250
- Bearer shares are allowed but do not allow par value shares.
- A minimum of three directors is required.
- A minimum of only one shareholder is required to form an offshore company in Panama.
We hope that all the above information will give you a clear picture of deciding whether to start an offshore company in Delaware or Panama.
Business Setup Worldwide is a platform to guide you through this. If you need any assistance, then you can contact us! We’d be glad to assist you.