McScruffy

@planbexpat Thanks for sharing your thoughts and all this info. I liked our discussion too!

Nutshell: 1.Contract directly. Foreign company contracts you personally as individual contractor. Contract clearly states services delivered to and benefiting foreign jurisdiction. 2.Invoice correctly. Your invoice shows your name, Panama address, service description, and delivery location outside Panama. No Panama SA on the invoice. 3.Payment trail. Foreign company pays from abroad to your Panama personal bank account. Wire reference shows consulting fee or contractor payment. Foreign origin documented throughout. 4.Document the work product. Keep records showing deliverables sent to foreign client location. Emails, project files, delivery confirmations. Evidence the benefit landed outside Panama. 5.No operations license. No local RUC registration for this income stream. As an individual receiving foreign-sourced income you have no Panama filing obligation. Keep your documentation clean in case DGI ever asks. 6.Simple income log. Date, client name, country, amount, nature of service, where delivered. One spreadsheet. Clean paper trail showing foreign source throughout. The DGI looks at economic reality not just paperwork. Structure it so the economic reality matches the documentation and you are clean. Good conversation by the way. Curious what your actual objective is. Relocating, structuring, banking, residency? If any of those are on your radar, DM me. I work with a network of Panama-based accountants, immigration lawyers and licensed bankers. Access is for people who are actually ready to move on something, but happy to point you in the right direction if you are.

Panama is introducing a 15% corporate tax to all companies who can't show proof of substance and operations in the country. So much for "Panama never changes rules" 🤷‍♂️

@planbexpat 2/n ''The grey area is digital...'' how would you structure and document this in a nutshell?

The test has two parts under the Fiscal Code. Where the activity is performed and where the benefit lands. Foreign clients whose benefit lands entirely outside Panama, confirmed by DGI administrative rulings and PwC, Dentons, BDO analysis, that stays foreign-sourced. That is not in question. The grey area is digital work physically performed in Panama for foreign clients. That is where interpretation varies and why proper structuring and documentation matter. Not a dealbreaker but not something to ignore either. Your SA owning a US LLC collecting passive distributions is a separate point entirely and you are correct on that one under the new proposal. In practice this has never been an enforcement issue and Panama’s own remote work visa signals the government’s intent. The grey area exists on paper in the Fiscal Code but the DGI has never gone after remote workers serving foreign clients. The risk is theoretical not practical. Structure it properly, document it well, and move on. Expanded comment follows

@planbexpat 1/n Interesting, but i think you are mixing things up. the first part ''Where the activity is p....'' agree but this relates to IVA or IBTMS, not income/corporate tax. If so do you have a source?

@planbexpat Thanks! But when it does have substance and has a foreign client it is earned in PA = taxed (not foreign). When an IBC owns ie. A usa LLC and get profits distributed from that LLC, this is passive income and taxed by the new proposal. Doesnt look great and happy to be wrong.

Good challenge but there is a distinction worth making. The substance proposal targets passive income specifically. Dividends, interest, royalties, capital gains. Not active business revenue from foreign clients. A company with real substance in Panama managing foreign client work is a different animal than a shell collecting passive distributions. The 15% is aimed at the shell collecting passive income with no real presence, not at the operator who actually runs a business from Panama serving foreign markets. Those are two completely different structures with two completely different tax outcomes.

@planbexpat @Ale_PPathways ''Foreign client, work physically done inside Panama, that is the grey area.'' this is what you are creating when getting substance in PA. so you are trading in the 15% proposed/when approved for whatever % they have for local business.

The source rule is where the work is performed, not where the client is. Foreign client, work done outside Panama, zero tax. Foreign client, work physically done inside Panama, that is the grey area. Historically Panama has not enforced this aggressively but the legal ambiguity exists. But I believe those days are over. Anyone structuring seriously needs to understand that distinction.

@planbexpat @Ale_PPathways You cannot get real substance with nominee directors, by law they are just proxies who hold zero control over an PA entity. They only act upon instruction.

Fair point. And it cuts both ways. Substance strong enough to pass the test could flip how some income gets classified. The trick is qualifying without accidentally making your revenue Panama-sourced. Doable but needs to be designed from the start, not patched in later. Real substance costs: registered office with actual activity, $2,000 to $5,000 a year. Nominee directors on top of that. Annual registered agent fees $300 to $500. Annual compliance filings another $500 to $1,500. Full substance setup first year lands somewhere between $10,000 to $15,000 all in if office included in this range. Estimated figures. Side note for anyone following. Panama has no formal IBC statute like Belize or Nevis. What people call an IBC here is actually a Sociedad Anonima, the SA. Same concept, different name. Governed by Panama Corporation Law of 1927, one of the oldest corporate statutes still in active use anywhere. When someone opens a Panama company for residency or offshore structuring, an SA is almost always what they are getting. DM me if you want to run through your specific setup. Answer changes a lot based on what the SA is actually doing.

@planbexpat @Ale_PPathways Yeah but if you have a real office and decisions are made in PA, you could argue that by then its is not foreign sourced income anymore. if the company works on PA soil it will be taxed in PA. BTW any idea how much i would cost to have real management and office setup?

Fair reading. Under the proposal, yes. A Panama IBC collecting passive distributions from a US LLC with no real substance in Panama could get caught. Current law? That flow is untouched. The proposal specifically targets non-qualified entities receiving foreign passive income. The fix is not complicated. Real management decisions made in Panama. Registered office with actual activity. You pass the substance test, you stay qualified. Frankly, this is how serious structures should have been built anyway. The shell era is over. Substance is the new moat.

@planbparaguay Sound like first world problems after watching this: x.com/PooWorldOrderr…

I’m starting to think Bell Water or Genesis may be better than Gond Wana. Maybe. The 20L bottles seem fine, I add minerals to my water so the below isn't an issue for me, but the 10L and 5L Gond Wana bottles often have a strange off chemical smell after opening. Smell inside the empty or half full bottle the next day, it doesn’t seem to be from the water itself, it seems to be coming from the packaging. A toxic off smell, I beleive from the plastic leeching. That’s a concern for something people are drinking every day.

@planbexpat @Ale_PPathways It depends on how you look at it. If you read ''Scope'' and ''Territoriality Principle'', it says that if a IBC in PA owns a USA LLC which generates income and distributes this to the IBC, this will be taxed. Agree?

@NatteCavia @Ale_PPathways My pleasure I’m glad you called it out for fact checking as it keeps even myself on an even keel. And when I’m mistaken I’ll be first to take accountability

@planbexpat the 0% on foreign income is not true when he lives in panama and teh actual work is executed on Panama soil. If he where having tax residency in PA and earning the money while not staying in PA you are right.

Here it is, clean copy: Everyone’s talking about millionaires and billionaires contemplating exit tax. Nobody’s talking about Marcus. Marcus is 34. Canadian. Graphic designer. Makes $3,200/month remote. Rents in Ottawa. No property. No stocks. No pension worth mentioning. RRSP with $8,000 in it. CRA’s departure tax had nothing to grab. Here’s what he actually did: January: Signed a US client retainer for $3,200/month. All foreign income. March: Flew to Panama City for two weeks. Liked it. Decided. May: Hired a lawyer. Formed a Panama company. Started the FNV application. July: Did not renew his Ottawa lease. Sold his furniture on Facebook Marketplace. Shipped two bags to Panama. Gave the rest to his brother. August: Cancelled Hydro Ottawa. Bell internet. Netflix Canada. Gym membership. Closed his Canadian bank accounts except one kept open briefly for transition. September: Landed in Panama. Furnished apartment in El Cangrejo. $950/month. He kept his RRSP open but stopped contributing. Knew withdrawals would face 25% withholding if he ever touched it. Left it alone for now. The following April: Filed his departure tax return. Declared his exit date. Converted remaining Canadian account to non-resident status. Filed T1161 showing total assets under $25,000. Departure tax assessed: $0. Nothing to deem disposed. Nothing to crystallize. Surrendered his OHIP card but it expires 212 days outside canada anyways - in theory at least. Converted his Ontario license to a Panamanian one after his first year of residency. That was the moment CRA officially let go. He now pays 0% on his foreign client income. Lives well on $2,800/month. Banks the rest. The exit tax debate is not about Marcus. But Panama is absolutely about Marcus. And there are a lot more Marcuses than there are millionaires and billionaires.

@TheJerzWay Could they argue that the 2 million that generates interest is USA sourced and should therefore be taxed?

@NatteCavia No one knows, but people do it much more often than it seems

"I have no US tax obligation." "I have no effectively connected income." "I'm a non-resident alien." Cool. Then why do you have $2M in a US bank? The IRS will ask the same question. And they won't like your answer.

@planbexpat @Ale_PPathways Thanks man, much appreciated!

@NatteCavia @Ale_PPathways Sure. Two sources: KPMG Panama legal brief (March 2026): assets.kpmg.com/content/dam/kp… Casa Solution summary of the proposal: casasolution.com/panama-propose… The KPMG brief is the cleanest. Straight from their Panama office analyzing the MEF draft reform.

@princzkov @Ale_PPathways No its means that when you have a company that earns, but all the decisions Arent made in that country and the company doesnt have for example and office or employees in Panama.

@Ale_PPathways Without substance what do they tax? Without substance means its a dormant company without income, doesnt it?

@stalliondelsur @KevronSutton @Ale_PPathways Thanks

@NatteCavia @KevronSutton @Ale_PPathways Read kpmg newsletter or every bigger lawyers office in Panama put statements concerning this topic.

@stalliondelsur @KevronSutton @Ale_PPathways Do you have a source of that, like the proposal where that is written? And what if a foundation owns a corporation that has operations? Is that also excempt?

@KevronSutton @Ale_PPathways Not true for private foundations if not part of the multinational corporate structure. Operating companies will be affected if this goes through.

@planbexpat @Ale_PPathways Love to believe you, but do you have a source, like the proposal where that is stated ?

A few things being missed here. This is a proposal, not law. Still needs National Assembly approval. And the 15% applies to passive income generated inside Panama for companies without real substance. A company with zero Panamanian revenue has nothing to tax. Panama is doing this to get off the EU blacklist, not to chase expats. Territorial tax on foreign income stays untouched

@DavidWolfe truly amazed he is still alive

🤡 😁

@sciencegirl The WEF

A group of pigs is called

@TheProjectUnity 100% everything we are being told is a lie

How confident are you that advanced, Non-Human Intelligences, have played a role in Earth/Human History?

@TheBTCTherapist Because 95% of the people are so fcking uninformed and yap what they see on mainstream media.

How is it that everyone on 𝕏 is telling me to buy the S&P 500 while 95 year old Warren Buffet is sitting on $397 billion in cash?