Please convince me. Real advantages of owning a corporation.

[Panamood]

My case:

- Single guy no plan to have kids. Made some money back in Europe. Paid taxes for it. Moved to Panama and invested it all as an individual in dividend etfs stocks & etfs. I live off those dividends.
- I use Tiger Brokers to buy Singapore and HKG etfs & stocks. Dividend tax 0%.
- My tax residency is Panama, where I own an apartment. Territorial tax so 0%.
- Easy, simple life. No taxes at all. No papers. No lawyer fees.

¿Why would I want to form a corporation to own my apartment, stocks, etfs, etc...? It seems to me that people overcomplicate things by doing this. Any comment will be appreciated.

 

[jafo]

From my perspective, I agree with you. If you aren't planning to do more business, it seems you got it all under control. You shouldn't care. Do you bank locally too?

No taxes at all. No papers. No lawyer fees.

This is when you know you are winning! You literally have a parachute and a bulletproof vest on and you are NOT skydiving and NOT in a war zone. You have literally cracked the life of the bon vivant!

 

[bnpsu]

Asset protection with a trust maybe?

 

[jafo]

Asset protection with a trust maybe?

Protection against who?
Who is the would-be predator?

 

[Sols]

Each situation is unique. In this particular case, having assets held personally seems perfectly fine.

Inserting companies or other vehicles would be for asset protection, if you believe there is some risk you want to protect against. If you don't perceive any, keep doing what you're doing.

Without kids (no inheritance concerns), spouse (no risk of divorce), or ongoing business that can cause wealth disruption, one of the few remaining risks would be preparing for changes to where you live. About 10 years ago, Panama accidentally removed territorial taxation and used worldwide taxation for a few months until the government fixed their mistake.

 

[bnpsu]

Protection against who?
Who is the would-be predator?

Anything can happen.. for example if you are driving and someone runs onto the road. They could open a civil suit against you

 

[Sols]

Anything can happen.. for example if you are driving and someone runs onto the road. They could open a civil suit against you

Given that OP is in Panama, we're probably looking at a few hundred or maybe a few thousand USD in damages, if the lawsuit is successful. Unless you do that several times per year, it's cheaper to pay the penalty than the asset protection necessary to keep the wealth out of reach of courts.

 

[bnpsu]

Given that OP is in Panama, we're probably looking at a few hundred or maybe a few thousand USD in damages, if the lawsuit is successful. Unless you do that several times per year, it's cheaper to pay the penalty than the asset protection necessary to keep the wealth out of reach of courts.

It could happen in the USA as well? Asset protection will cost $5-25k to setup, what is the downside?

 

[JohnnyDoe]

A simple US LLC costs a few bucks per year ($25) and can protect you from the unforeseen. By definition, it is impossible to predict the unforeseeable.

 

[Panamood]

From my perspective, I agree with you. If you aren't planning to do more business, it seems you got it all under control. You shouldn't care. Do you bank locally too?


This is when you know you are winning! You literally have a parachute and a bulletproof vest on and you are NOT skydiving and NOT in a war zone. You have literally cracked the life of the bon vivant!

Yes I use a Panamanian Local Bank (Banco Aliado). Once a year I withdraw money from Tiger Brokers to it and thats it.

Also I didnt say it but no property taxes either. My apartment is < 120K so no taxes. My only expense house aside is health insurance with MAPFRE. 100$/month for 300K/year coverage.

I understand the protection if you are someone flashy or well known. For an average Joe with some money like me... Its making things more complicated. From dealing with lawyers to brokerage & bank accounts.

No bank or brokerage makes a single question if everything is under my name. When there is a corporation.... That changes.

So. Simplicity. 1 brokerage, 1 local bank, 0 taxes.

 

[MiltonStone]

A simple US LLC costs a few bucks per year ($25) and can protect you from the unforeseen. By definition, it is impossible to predict the unforeseeable.

I totally agree. You can get that company for nothing and it will protect you at the end of the day should something go wrong.

 

[jafo]

Yes I use a Panamanian Local Bank (Banco Aliado). Once a year I withdraw money from Tiger Brokers to it and thats it.

Also I didnt say it but no property taxes either. My apartment is < 120K so no taxes. My only expense house aside is health insurance with MAPFRE. 100$/month for 300K/year coverage.

I understand the protection if you are someone flashy or well known. For an average Joe with some money like me... Its making things more complicated. From dealing with lawyers to brokerage & bank accounts.

No bank or brokerage makes a single question if everything is under my name. When there is a corporation.... That changes.

So. Simplicity. 1 brokerage, 1 local bank, 0 taxes.

Check your conversation for the answer. You are doing everything 100% correct!
You don't need to add ANY unknown variables or bring anyone into your current situation.
Your "soup" is perfect for you. Don't consult a "chef"!

I totally agree. You can get that company for nothing and it will protect you at the end of the day should something go wrong.

But he is NOT engaged in ANY business. He's just chilling in Panama. He is retired, if we go by definition. No job. No business. Just simply enjoying life in Casco Viejo or Multiplaza. What is he defending against?

25k to setup

This is the downside! The salary in Panama is a few hundred dollars a month!

 

[Panamood]

It could happen in the USA as well? Asset protection will cost $5-25k to setup, what is the downside?

I spend less than 25K per year living here xDD. I like going to cafés, gym, beach & sex. No expensive bull2hit.

Edit: I forgot my chess club membership: 8$ / month with unlimited terrible coffee hahah

 

[FDS ADS]

My case:

- Single guy no plan to have kids. Made some money back in Europe. Paid taxes for it. Moved to Panama and invested it all as an individual in dividend etfs stocks & etfs. I live off those dividends.
- I use Tiger Brokers to buy Singapore and HKG etfs & stocks. Dividend tax 0%.
- My tax residency is Panama, where I own an apartment. Territorial tax so 0%.
- Easy, simple life. No taxes at all. No papers. No lawyer fees.

¿Why would I want to form a corporation to own my apartment, stocks, etfs, etc...? It seems to me that people overcomplicate things by doing this. Any comment will be appreciated.

With owning limited company you will limit personal liability and make your life more flexible.

 

[zzzzzz]

I spend less than 25K per year living here xDD. I like going to cafés, gym, beach & sex. No expensive bull2hit.

Edit: I forgot my chess club membership: 8$ / month with unlimited terrible coffee hahah

What type of visa do you have in Panama? Are there any requirements like minimum days of stay per year, owning real estate...?

 

[jafo]

With owning limited company you will limit personal liability and make your life more flexible.

Legit question!

How?
This man is literally the definition of a retiree!

He has NO business!
No company!
No job!
No taxable income!
He has NO tax liability.
He pays zero taxes!
His home/apt. is paid off, but less <US$120K, so he pays NO property taxes.
He spends <$25K/year to live like a King.
He lives in Panama, so not some "rule of law" type country with citizens and ambulance chasers (ie. attorneys) suing each other willy-nilly.

How is planting a new "seed", i.e. a limited liability company, into his life going to "limit his personal liability and make his life more flexible", i.e. add more money to his bottom line?

 

[FDS ADS]

Legit question!

How?
This man is literally the definition of a retiree!

He has NO business!
No company!
No job!
No taxable income!
He has NO tax liability.
He pays zero taxes!
His home/apt. is paid off, but less <US$120K, so he pays NO property taxes.
He spends <$25K/year to live like a King.
He lives in Panama, so not some "rule of law" type country with citizens and ambulance chasers (ie. attorneys) suing each other willy-nilly.

How is planting a new "seed", i.e. a limited liability company, into his life going to "limit his personal liability and make his life more flexible", i.e. add more money to his bottom line?

In legal relation, if individual breaching obligation or causing damage to others he/she is personally liable for the damage and his/her property can be confiscated and sold for benefit of damaged party, if here is Limited company in tax free jurisdiction, then this company will be party of the legal relationship and individuals personal property will be protected.

 

[jafo]

In legal relation, if individual breaching obligation or causing damage to others he/she is personally liable for the damage and his/her property can be confiscated and sold for benefit of damaged party, if here is Limited company in tax free jurisdiction, then this company will be party of the legal relationship and individuals personal property will be protected.

Can you provide citations to court cases, Corte Suprema de Justicia de Panamá, in Panama where you can prove your claim is valid?

 

[FDS ADS]

Can you provide citations to court cases, Corte Suprema de Justicia de Panamá, in Panama where you can prove your claim is valid?

All limited company around the world limits liability of shareholders or managers. I will not provide case law on this it is 100% irrelevant.

May I know reason of you reaction?

 

[Panamood]

What type of visa do you have in Panama? Are there any requirements like minimum days of stay per year, owning real estate...?

I took advantage of the Friendly nations visa before covid when it led to permanent residency right away. Now its still doable but you get temporary for 2 years, then permanent.
I live in Panama permanently but i believe 1 day every 2 years not to lose the status.