Bitcoin Finances Real Estate Purchases in Panama (2024)

BITCOIN FINANCES REAL ESTATE PURCHASES in PANAMA

By: Steven Rich, MBA

Bitcoin Finances Real Estate Purchases in Panama (1)

Bitcoin finances real estate purchases in Panama has become a reality.

Bitcoin has been getting a lot of publicity over the past week regarding record breaking prices. Such as, “Bitcoin surges above $5,000 to new record high” from CNN last October 12th.

Last September, Bitcoin news items praised, “Strong Panama Real Estate Market Only Getting Stronger”. Source According to the Bitcoin Isle article, Panama’s real estate sector is “booming without breaking a sweat”. More so, real estate growth can be accelerated with Blockchain technologies.

Bitcoin Finances Real Estate Purchases in Panama (2)

Around the same time, Live Bitcoin News proclaimed “That’s Why the Blockchain Can Revolutionize the Real Estate Market”. Source This news story claimed that Blockchain technology offers real estate transactions four advantages over money: “fraud prevention, disintermediation, smart contracts, and Money 2.0”. This translates into eliminating unnecessary intermediaries (disintermediation), fraud prevention by avoiding forged documents because senders and receivers of funds are logged and digital certificates or property ownerships are infinitely recorded.

In addition, Money 2.0 can replace the current monetary system monopolized by central banks printing money. Money 2.0 will free the real estate markets from government monopolies and reduce real estate taxes. Smart contracts are blockchain based computer contracts which can verify, facilitate, and enforce performance of real estate contracts. Thus, less fees will be paid to attorneys for creating contracts.

PANAMA

Recently, Bitnewsbot revealed that a real estate finance company based in Panama will be introducing a “Blockchain Crowdfund for Real Estate” to finance real estate development and borrowing experiences by replacing interest rate risks with equity participation.

The negative consequences of traditional lending required homebuilders, developers, and home buyers to pay up in order to avoid foreclosures. This outdated process will be replaced by “equity participation” as incentives for home builders and developers to perform with “guaranteed buybacks” to limit a borrower’s maximum exposure as well as knowing what their maximum loss potential is. The reliance on credit scores and proof of income will be eliminated.

Blockchain technology in Panama will raise an initial $25 million through sales of institutionalized tokens (PEX-Token) for $1 which can be purchased using Bitcoin, WAVES cryptocurrency, or Ethereum tokens on the company’s website. Homebuyers will pay for their mortgages at current market rates using the PEX Token system. The main portions of the PEX Token will go towards building additional housing projects and financing. Over time, the PEX Tokens will become profitable assets to buy, sell, and trade.

Blockchain technology creates a perpetual funding system while increasing efficiency and transparency more than traditional banking models provide.

NewsBTC (a Bitcoin News Service) also praised the Panama PEX Token model in a news story it ran last September 7th. Source It claimed that the PEX Token will “disrupt the real estate sector by simplifying the way homebuilding, home buying, and home financing can be executed”. PEX Tokens profits will be 80% distributed to the token holders. Buyers benefit from the PEX Token system by paying their mortgages with it and use their savings to buy more PEX Tokens. That way, buyers can share in the 80% profits distribution to token holders.

Bitcoin Finances Real Estate Purchases in Panama (3)

PANAMA OFFERS LOW COST OFFSHORE BITCOIN LICENSING

The Panama Financial Services License is considered one of the best offshore Bitcoin licenses available worldwide. Source Panama has a strong banking system which does not regulate Bitcoin companies. Unlike Mexico and the United States which treat Bitcoin as a “currency” requiring full licensing to sell or trade.

Therefore, Panama offers Bitcoin sellers and trading companies a licensed, but unregulated offshore Bitcoin brokerage. Licensed Bitcoin brokerages are not required to provide audited financial statements or records to the government, or deal with complicated compliance regulations, and are free from the typical headaches associated with overly regulated industries.

Bitcoin companies holding a Panama Financial Services License can make the following claims on their websites:

"Bitcoin XXX Company is a financial institution licensed by Ministerio de Comercioy Industrias – Republic of Panamá (MICI) in Panama as a Financial Institution."

It is important to note that the claim must only be that the Bitcoin company is “licensed” by the government and not “regulated”.

Also note that a Panama Financial Services License company does not engage in regulated services like:

• Banking;

• Securities trading;

• Broker-dealer services like managed trading or investment funds;

• Savings & Loan;

• Credit Union (Co-ops);

• Cash transmittal or currency exchange services; and

• Fiduciary services like a trust company

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ANTI-MONEY LAUNDERING RULES APPLY

Just because a Panama Bitcoin company is licensed, but not regulated or subject to government oversight, the laws of Panama regarding anti-money laundering apply to all businesses and companies in Panama.

Know Your Client and Suspicious Activities laws also apply in Panama as they do in most countries. This requires obtaining basic information regarding who your clients are along with record keeping proving you made these mandatory inquiries.

Bitcoin Finances Real Estate Purchases in Panama (5)

LOWER COSTS IN PANAMA

FinTech companies not using correspondent bank accounts will have less compliance requirements than traditional brokers. Bitcoin companies sending transfers across their networks outside of the traditional banking system will pay less compliance costs.

Offshore Licensed Financial Services Companies in Panama have no minimum capital requirements. This means that a licensed Bitcoin company can be formed with whatever low capital it chooses.

Finally, there are no corporate or income taxes on profits Panama companies make offshore (outside of Panama’s borders). This is called a “territorial tax system” where corporate and income taxes are only levied on profits incurred inside Panama.

CONCLUSION

Bitcoin finances real estate purchases in Panama has become a reality.

Many Bitcoin newsmedia predict this may become a global trend. Imagine, real estate developments, sales and purchases eliminating most of the intermediaries and reducing he risks of buyer defaults and foreclosures. In the meantime, the purchasers of the cryptocurrency tokens financing these real estate deals may receive future profits beyond their wildest dreams.

Besides revolutionizing global real estate financing, Panama provides low cost government licensing for Bitcoin companies who may operate locally and offshore (globally) with little government oversight and no regulations.

An extra bonus is all income earned outside of Panama by Panama companies are not subject to corporate or income taxes. However, the U.S. and some other countries tax worldwide income which require their taxpayers to declare all global income to their tax authorities.

COPYRIGHT © 2017 – Steven Rich, MBA

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Bitcoin Finances Real Estate Purchases in Panama (2024)

FAQs

Is Panama a good place to buy real estate? ›

Buying property in Panama is safe and easy - foreigners enjoy the same property rights as Panamanians. There are over a dozen laws in the country that have been enacted to specifically protect foreign investors. Panama's constitution also protects private property and its owners.

Is Panama still a tax haven? ›

Panama. Panama became a tax haven for US citizens due to its favorable tax policies and territorial tax system. The country operates on a territorial basis, which means that only income earned within its borders is subject to taxation.

How much does it cost to get a crypto license in Panama? ›

Cryptocurrency exchange license in Panama cost can vary depending on the specific requirements and complexity of the process. On average, the cost of opening an international IBC in Panama starts from 2500 euros.

Does Bitcoin work in Panama? ›

Panama has 5 trusted exchanges available for you to sign up for, with the most popular being Binance and Kraken, which account for a combined 210,000,000 active users. After signing up to an exchange you will need to verify your identity and address, which is part of the Know Your Customer (KYC) process.

What are the risks of buying property in Panama? ›

Expats buying property in Panama should be cautious of risks like hidden costs and legal issues. Understanding tax exemptions, especially for non-new constructions, is crucial. Risks include changes in tax laws and overlooking property issues due to focusing on tax benefits.

Where do most American expats live in Panama? ›

Most expatriates, whether families, singles or couples, settle in Panama City, the country's financial and cultural centre. The very modern Panamanian capital offers all the comforts of urban life, with a wide range of leisure activities, shops, educational and healthcare facilities and cultural centres to discover.

Do you pay US taxes if you live in Panama? ›

US Taxes for Expats

The IRS expects you to report your worldwide income, even if you're enjoying the breathtaking landscapes of Panama.

What is the main source of income in Panama? ›

The economy of Panama is based mainly on the tourism and services sector, which accounts for nearly 80% of its GDP and accounts for most of its foreign income. Services include banking, commerce, insurance, container ports, and flagship registry, medical and health and tourism.

Does Panama tax Social Security? ›

Panama does not tax foreign-sourced income. If you plan to retire in the Central American country, you won't have to worry about paying taxes on your Social Security, 401(k) or other income to Panama. This eliminates the hassle of trying to claim it back as a foreign tax credit when you file your U.S. tax return.

Is crypto taxed in Panama? ›

Like other types of income, cryptocurrency income in Panama falls under the territorial principle of taxation. This means that only income earned within the country is subject to taxation. Cryptocurrency income earned outside of Panama is not taxable.

What is the easiest country to get a crypto license? ›

Mauritius is quickly becoming a favorite destination for crypto projects. The country offers a friendly regulatory environment and is known for its political stability. The Financial Services Commission (FSC) of Mauritius has clear guidelines for digital assets, which makes it easier for crypto companies to operate.

How much does it cost to start a business in Panama? ›

How much does it cost to set up a company in Panama? The incorporation costs for a Panama LLC in year 1 amount to US$1,950, and annual company costs in year 2 and thereafter amount to US$0. However, there are additional costs that you should consider, such as the annual fee for the registered agent.

Is Panama Bitcoin friendly? ›

The first cryptocurrency operations in the country began in 2012 and initially involved mainly foreigners. “Panama has always been considered a friendly country for cryptocurrencies, because they are not prohibited, because, for example, any user or business can accept them as a medium of exchange,” she says.

Is crypto regulated in Panama? ›

Panamanian law recognises cryptocurrencies as a legal means to perform financial transactions and investments. This opens up avenues for the use of cryptocurrencies in commercial transactions, investments and other financial services.

Can you use US cash in Panama? ›

If you're coming from the United States, you won't need to exchange money—the dollar is legal tender in Panamanian currency. Changing other foreign currencies can be difficult in Panama. You can exchange money at the Banco Nacional de Panamá in the airport.

Is Panama a good country to invest in? ›

Investing in Dollars: It is the only country in Latin America that has a dollarized economy, making it a safe country to invest in. Tax incentives: You are only liable for income tax in Panama for money or assets earned on Panamanian territory. Panama's property tax rates are among the lowest in the region.

Can a US citizen buy a house in Panama? ›

A: Yes, it is legal for foreigners to own titled property in Panama in their personal names, although in some cases it may be convenient to hold property in the name of a Panamanian corporation, where there are multiple owners for example, or if the property is being used for a business such as a real estate ...

Is Panama City a good real estate investment? ›

Panama City is often touted online as a prime real estate investment destination with great ROIs.

What are the pros and cons of living in Panama? ›

While there are some drawbacks to living in Panama such as payment limitations, the language barrier, or potential noise disturbances from the hustle and bustle of the city, benefits such as the friendly community, opportunities for traveling, and affordability makes up for it.

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