Emerging Markets Rates and Currencies Handbook

arrangements to own retail within the confines of Panamanian law (under the TPA, direct U.S. ownership of consumer retail is allowed in limited circumstances). In addition to limitations on ownership, the exercise of approximately 55 professions is reserved for Panamanian nationals. Specifically, medical practitioners, lawyers, accountants, and customs brokers must be Panamanian citizens. The GOP also requires foreigners in some sectors to obtain explicit Foreigners need not be legal residents or physically present in Panama to establish corporations or obtain local operating licenses for a foreign corporation. Business visas (and even citizenship) are readily obtainable for significant investors. While there is no formal investment screening by the GOP, the government does monitor large foreign investments. permission to work. However, there are no reports of such restrictions hindering U.S. firms operating in Panama. With the exceptions of retail trade, the media and several professions, foreign and domestic entities have the right to establish, own, and dispose of business interests in virtually all forms of remunerative activity. Citibank Punta Pacifica Calle Punta Darien Torre De Las Americas Torre B, Piso 14 Panama, Panama FX Sales Contact: +50 7210 5960 Tax Summary – Panama Panama Country Tax Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities W/H Tax • 12.5% WHT • No WHT • 12.5% WHT • 5%WHT (see comments) Deductibility of interests • Generally deductible (see comments) • Fully deductible • If local, interest is deductible Deductibility of (FX) Losses • Not deductible • N/A • N/A Other Taxes/Duties • N/A • N/A • 1% surcharge interest over notional (FECI) • N/A • N/A Comments • Deductibility of interest is applicable only if withholding tax is applied over interest paid offshore. Otherwise, it becomes a non-deductible expense • N/A • N/A • 10% capital gain tax on the sale of equities is applicable • If the entity is the purchasing side of the transaction, a withholding tax of 5% of the equity value must be deducted from payment to issuer Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources