You might be wondering why you need to open offshore bank account in Panama! After the famous Panama Paper Leak issue, a lot of investors think twice before choosing this as their offshore banking destination. Indeed, the hot topic has changed the way the world sees Panama. However, most of these thoughts are absolutely unnecessary. If you are caught in the midst of this tornado, you need to be aware of certain things. A tornado of inaccurate misconceptions and assumptions is something you don’t need to worry about.
Technically, the Panama Paper Leak focuses on who’s who is investing in the offshore banking industry. The most recent names revealed by the list includes Denise Rich, and Gianluigi Longinotti Buitoni. Well, wouldn’t you know that these people are too rich to be true? Well, they are likely to appear in the list of offshore investors, without or with the Panama Paper Leak. In fact, you will come to know that Emma Watson, the Famous Harry Potter Star is also a part of the offshore banking industry.
The shaming and naming by the social media results in one common question: why is the social media and the public shaming and naming-happy than focusing on the actual truth.
The world of offshore banking is known for four myths and misconceptions. In this post you will read about these myths that surround people who open offshore bank account in Panama.
Myth #1: Offshore Banking is Absolutely Illegal
The talk about myths and misconceptions begins with how illegal opening an offshore bank account in Panama can be. Well, this is one of the world’s biggest misconceptions. As you read through Panama Papers, and posts in the internet – you are likely to end up with the opinion that offshore banking is wrong. More than 90% of the posts are worded in such a way. As a result, many potential investors choose to stay away from offshore banking systems in Panama.
The truth is quite different! Just like any other banking service, offshore banks in Panama are absolutely legal. The thin line between onshore and offshore banking would be the location of your account. When you secure your funds in an offshore bank account in Panama, it will be present outside your home country. Thus, it will be protected by the rules and regulations of the banking system in Panama.
Myth #2: Offshore banking only focuses on Tax Evasion
For centuries, offshore banking was related with money laundering and tax evasion. Very few people realized the actual benefits of investing in offshore destinations.
One of the primary benefits of opening an offshore bank account in Panama would be tax evasion. And, many investors choose to open an account in Panama for tax avoidance! There are many differences between tax avoidance and tax evasion. Aren’t these the same? Certainly not! Fundamentally, both these concepts are quite difference in nature.
By definition, tax evasion is all about using methods that can reduce your tax illegally. On the other hand, tax avoidance focuses on reducing tax the right way. When you open offshore bank account in Panama, you will be able to reduce tax legally. This means, you are not doing anything illegal by opening an offshore bank account. One of the finest ways to ensure asset protection, and avoid taxes is with offshore banking.
Myth #3: Offshore Banking is Meant for the Rich and the Wealthy!
You might have come across this myth very often. Well, this misconception is not limited to offshore banking in Panama. Instead, it covers offshore banking around the world. The rich, and big companies are often privileged to open offshore bank accounts. In simpler terms, they have money to venture outside, and consider opening offshore account. But, you don’t need to make a big investment for opening these accounts. Many countries require less than a thousand dollars for opening an offshore account successfully. For example, if you choose to open an offshore bank account in Panama, you need only 500 USD for the account, and another 550 USD for setting up. Every else will be kept safe in your account. This theory holds good in countries like Puerto Rico and Cyprus too! You don’t need to make a hefty investment for opening an offshore bank account.
Myth #4: Offshore Banking Means, Stealing from the Poor and the Government
In many countries, the government tends to bail out of the rich, and fortunate companies. These companies are no longer expected to pay taxes. Even when they pay tax, the amount is very little. For the sake of offering more jobs, and protecting the poor – these companies divert taxes in an interesting way. However, this is just a small portion of the entire population. What happens to the rest of us? Other investors have two options: they can choose to pay taxes without any alterations, or they can get creative.
With technical facts aside, you need to be clear about the moral issue here. When you engage in offshore banking activities, you are not going to change the way your work. In fact, you are not stealing a penny from the poor or the government. Instead, you are ought to make changes to the way your funds are handled. And, there is nothing wrong about it!
Let’s understand this with a simple example: you choose to drive a stunning vehicle. You have all the documents, and license plate ready. But, the car gets stolen by bad guys. They decide to use the car for their activities. Now, does this make the car illegal? Does it make the manufacturer of the vehicle bad?
This theory holds good for offshore banking. Everything about offshore banking is legal. Whether you open offshore bank account in Panama, or elsewhere – it idea behind these banking activities is legit. Thus, you don’t need to worry about opening an offshore bank account, and investing your hard earned money in it. You are not committing a crime, or stealing money from the poor.