|
|
|
"Panama...A Domicile is Born" by STAVROS COSTARANGOS Considered as the first SPANISH-speaking domicile in the captive insurance business, PANAMA enacted legislation in 1996 to allow the formation of captive insurance/reinsurance companies in its territory. It comes at a time where many think it to be just right for what is happening elsewhere in the Latin American region, through the ongoing privatization process of large government operated concerns in the telecommunications, energy and transportation areas, as well as in the insurance field where only Brasil, in the reinsurance arena, and Costa Rica in direct insurance, have state owned monopolies. Panama, with an international banking system that hosts over one hundred banks including US, European, Asian and from Latin American origin, holds the US dollar as legal tender, thus making it one of its strongest advantages not only for the formation of captives, but also for the enormous trade and economic activity that has been going on for decades at the Colon Free Zone Trade Area, one of the largest of its kind in the world. With a privileged and strategic geographical location for world commerce, witnessed by the PANAMA CANAL since the early part of the century, Panama has many more advantages to attract regional and international parent companies to look into Panama as its domicile of choice. Visitors are surprised to find that many of the Spanish speaking residents not only . . . "SPEAK ESPAÑOL", but also do . . . "HABLA ENGLISH". The international and business community is a bilingual one and in particular those involved in the financial areas of Panamanian and regional development, are not only multilingual but also professionally talented in their particular fields of insurance, banking and finance. With the international business community eyeing Latin America as the untapped market for new opportunities, corporations that have and will be establishing branches and/or regional operational hubs in the area will most surely look into alternative risk transfer/retention options, without a doubt making captive formation a possible choice of action. A one-time application fee of US $1,000.00 must be presented to the Insurance & Reinsurance Superintendence, as the local regulating authority, with a $2,000.00 annual license fee. Capital requirements have been established as follows:
With no taxes on premiums, capital gains or profits, captives incorporated in Panama will also enjoy the non-existence of double taxation treaties with other countries. A minimum of thirty five percent of reserves must be invested in locally authorized instruments. A solvency requirement of a five to one ratio between net premiums and capital must be met when presenting audited financials every year. An insurance/reinsurance risk report of operations must also be presented. PANAMA has been jointly promoting this law between the government and APARYS (http:/www.aparys.org), the local risk management association, as well as through the efforts of several individuals who have been guest speakers at different forums, and others who have diligently and with utmost professionalism been traveling the region. Panama, known to many as "The Land Bridge of the Americas" at "The Crossroads of the World" expects to become the "Natural Choice" of those in the region and elsewhere that are selecting the proper domicile for captive company incorporation. Stavros Costarangos P For related
information, see captive.com News/Library
article, |
| http://www.captive.com/showcase/panama/ | |