The answer to this question depends completely on your situation, and a definitive answer can only be given if you explain your situation to us during a no-obligation consultation. Keep in mind that becoming the director of your own corporation completely forfeits all of the anonymous benefits of a corporation with nominee directors. As a general rule, we have outlined some common scenarios for when you should and shouldn’t assign yourself as the director of your Panama corporation:
Cases where you should use nominee directors:
- You are interested in legally saving on taxes
- You wish to protect your assets from the government, auditors, or a spouse
- You do not want the corporation linked back to you in any way
Cases where it’s okay to be the director of your own Panama corporation:
- You plan on conducting business in Panama
- You plan on purchasing assets in Panama
- You plan to live or are currently living in Panama
- You need special licensing for a Panama business
If you are interested in maintaining anonymity but you want trusted acquaintances to be the directors of your corporation, you can also provide your own directors.
COMMON MISTAKES FOR PANAMA CORPORATIONS
Many firms claim to offer things they can’t reasonably provide. Because of this, we have clients that have dealt with other firms in opening Panama corporations and bank accounts, and subsequently come to us looking for help out of a bad situation. For these clients, we offer what we like to informally call our “offshore janitorial services“. To put it bluntly, we clean up other people’s mess. Here is a case study that everyone in our office tells whenever we’re asked to describe how offshore can go wrong:
You (Don’t) Get What You Pay For
A European client whose name doesn’t need to get any more public contacted us through Skype about our virtual office services. He used a fake name and an IP address that was supposedly in the US. As we chatted, he told us that he had already incorporated anonymously in Panama a few months ago with a well-known, local legal services company. The price he paid didn’t shock us, but it was much more than necessary for the basic services he had obtained, and in a moment, the value of these services will seem even lower. He had originally intended to continue working with them, but apart from the fact that they didn’t advertise any virtual office services on their site, they hadn’t been responding to his emails lately.
When he told us the name of his Panama corporation, one of our senior partners did a routine check on the government’s website. We noticed that the officers of the corporation were all under a distinctly non-Latin name, which although not uncommon, still prompted us to make sure these directors were in fact Nominees. He assured us his corporation was anonymous, and he seemed very vested in maintaining his privacy (as evidenced by his use of an alias and an IP address scrambler).
Just to make sure, we sent him the link and asked him if he recognized the name listed as the President, Secretary, and Treasurer.
We think you know where this is going. He didn’t have to tell us whose name it was, because gauging his reaction, it was clear to us that he was not too happy about paying extra for nominee directors only to have his name as the President, Secretary and Treasurer of his “anonymous” corporation. In other words, his personal info was readily available for anyone with an internet connection to see on the government’s Public Registry website. (Find out why this is a bad idea and how it can be avoided)
At this point, we made sure he kept his cool and didn’t blow his lid off at his old firm, so we were luckily able to solve the problem by opening another corporation for him with real nominee directors. He had a 2nduseless corporation to deal with, but at least he caught it before it was too late.
But, had he exploded and attacked his lawyers for improperly opening the old corporation, things might have gone differently. This brings us to the second stage of offshore-gone wrong:
Getting It From the (Worst) Source
We remember hearing stories about the best conmen, guys that would get their angry clients storming into their office, demanding a refund, and walking out with a grin on their face and their wallet even lighter. Although we admire the technique of being able to get someone to kiss the ass that shits on them, we don’t believe in it as a business model and Offshore Worldwide does everything in its power to make sure that potential clients do not get wrapped up in a web of misfortune. This is not to say that anyone who gets caught in that web is stupid or naïve; many times there is simply no other choice than to buy your way out of the problem to avoid a confrontation that could leave you even more exposed.
Such would have been the case with the European man we spoke of earlier. Had he gone back to his old firm, they would have gotten deeper into his pocket for more money to “fix the error” that they made in the first place. We will give this situation the benefit of the doubt and say it wasn’t on purpose, but we have seen cases in the past where purposeful errors are passed off as “miscommunications” that then cost thousands of dollars to remedy. He’s lucky he didn’t go for the 1 day bank account service, because then he surely would’ve had no choice but to play by their rules.
NOMINEE DIRECTORS: DO THEY HAVE CONTROL?
99% of the time, our client’s main concern is staying completely anonymous. Typically, if you’re worried about maintaining your privacy, you can be considered a cautious person. Therefore, it only makes sense why people would worry about opening a corporation and assigning someone else to be the President, Secretary, and Treasurer. (if you are not familiar with how an anonymous corporation works, you can read more about the Anonymous Panama Corporation here) The privacy benefits are obvious, but can this scenario be considered safe in the long run?
The short answer is a resounding “YES!”, but let’s get a better idea of why it doesn’t matter who the front man for your corporation is, as long as it’s not you. The simplest form of security we offer against the nominee directors is having them sign undated resignations for every corporation we form. That means that you have the power to remove or replace any director for any reason, and the nominee director will not be able to step in at any point.
The truth is, you’ll never have to use those resignations in the first place, because the directors can’t really do anything about any part of your offshore structure. Let’s pretend you get the most conniving, sly, and criminal nominee director you could find. He’ll try and get funds from the corporate bank account first, but guess what? Your power of attorney and Nominal Shares (but not publically Registered) combo gives you complete control over that, and the banks will not even open the door to him without getting authorization from you first, if they even take his request seriously at all. OK, but if he had control of the corporation, he would slide everything out from under you. He is the president, after all. Only problem is, YOU control and own the corporation, because the Nominal Shares (but not publically Registered) are in your possession. President is no more than a public title, it does not make him a shareholder, he is given no authority, and just like any corporation, the shareholders (in other words, you) make the decisions.
Just to keep you assured, our directors are completely ignorant to the happenings of your corporation. They will never know who you are, and unless you request it for some special cases, they will have absolutely no information about you.
PROVIDING YOUR OWN DIRECTORS
Sometimes, our clients are interested in providing their own directors instead of using our nominee directors. This scenario is not the same as being the director of your own Panama corporation, as this strategy suggests that you use trusted acquaintances (not family members) to act as front men for the corporation. This would be generally used to maintain anonymity while running your corporation without the dependency of third-party directors. Our clients generally use this option when they have people they can trust, and they wish to save a few hundred dollars off the price of the anonymous Panama corporation.