Singapore aerospace companies reach Americas through Panama

.

Published October 29, 2009

SINGAPORE INTERNATIONAL
Copa's vote of confidence in ST Aerospace

By CHUANG PECK MING

WHEN ST Aerospace set up a maintenance, repair and overhaul (MRO) service shop for aircraft in Panama in 2006, one of its first customers was Copa Airlines.

Photo - Key location: ST Aerospace set up a facility in Panama as it reckons that it is the perfect place to do business because it is between North and South America

Recently, Copa not only renewed its maintenance service agreement with Panama Aerospace Engineering, ST Aerospace's Panama facility, but extended the agreement beyond its B737 planes to its E-190s.

Obviously, ST Aerospace has a satisfied customer in Copa. The Singapore-based company, which is recognised as the world's largest aircraft MRO service provider, takes it as 'a testament to our high quality and reliable service'.

Copa's gesture augurs well for ST Aerospace, which set up the Panama facility to provide a strong and competitive MRO base to serve the Americas - 'supporting the maintenance needs of customers operating in Central, North and South America', says ST Aerospace president Tay Kok Khiang.

The facility is intended to boost ST Aerospace's capabilities and complements its operations in the US, which remains a key market because it is home to almost half of the world's commercial airliners.

To have customers like Copa coming back - and for more - puts ST Aerospace in a strong position to win more customers in a fast-growing market for aviation services.

In fact, the company has seen its customer base in Panama expand to include clients such as AerCap, AWAS, GECAS, Sundowner Aviation and Transaero Airlines among others.

'This demonstrates our growing success and customers' growing confidence,' says Mr Tay.

ST Aerospace initially faced a shortage of trained aviation mechanics in Panama. But it anticipated this problem. So as it built up the Panama facility, it also started a significant training programme for the locals.

It also deployed some of its expertise from the US and Singapore to help get operations in Panama off the ground.

'Today, the training programme is going well as we have well-educated and enthusiastic employees,' Mr Tay says. 'With our established systems and processes in place within our global network, we were able to share our knowledge to facilitate the start-up process.'

The Panama facility is now performing well, he says. 'It has consistently re-delivered aircraft on time and with quality to customers, and has steadily built a strong track record for the maintenance of narrow-body aircraft, with more than 60 re-delivered to date.'

ST Aerospace reckons that Panama is the perfect place to do business because it is between North and South America.

'It is recognised as an important transport and shipping hub, and we feel it is an ideal location for MRO,' says Mr Tay. 'It is also close to the US, where we have a good client base, and has a good infrastructure.'

The aviation market in Latin America is projected to expand at a rate second only to Asia, mainly in narrow-body aircraft.

'Therefore we expect to continue growing our Latin American customer base,' Mr Tay says. 'As the aviation business recovers and carriers start to build up capacity, and due to competitive advantages that Latin American MROs have, Latin America will be an attractive outsourcing option for US carriers.'

Full text in http://www.businesstimes.com.sg/mnt/html/btpre/registration/redirect.jsp?dlink=/sub/specialfocus/story/0,4574,356733,00.html? .


Special Focus
Published October 29, 2009

SINGAPORE INTERNATIONAL
Aviation prospects in Mexico, Brazil, Panama, Argentina: IES

AVIATION opportunities in selected countries seen through the eyes of International Enterprise (IE) Singapore.
...

Panama: The next 40 years will see the former Howard Military Base transformed into a mixed-use community called Panama Pacifico. The $705 million project includes an airport and logistics hub.

Signalling Panama's commitment to develop the aviation sector at Panama Pacifico, Law 41 offers tax benefits for providers of aviation industry services and aviation maintenance, repair and operations (MRO) services. Aerospace Engineering, an offshoot of Singapore-based ST Aerospace, already has a footprint at Panama Pacifico.
...
Full text in http://www.businesstimes.com.sg/mnt/html/btpre/registration/redirect.jsp?dlink=/sub/specialfocus/story/0,4574,356731,00.html ?

SINGAPORE INTERNATIONAL
The Latin American route

The aviation opportunities Latin America has to offer extend beyond air cargo, reports CHUANG PECK MING

SINGAPORE Airlines Cargo launched flights to several Latin American cities in February this year because it wanted to fly flowers from Ecuador and Colombia to the rest of the world.

Oh, and it was also eyeing a cut of the business of shipping Brazil's electronics exports.

At the moment, the continuing global slump in electronics has kept exports down. But worldwide demand for freshly cut flowers is in bloom again.
...

'As the world economy picks up, so will air cargo movements in and out of Latin America to various parts of the world,' says Angeline Chan, head of the transport and logisticis division at International Enterprise (IE) Singapore.

Due to the vast size of countries in Latin America, air transport is a vital link, she says. 'There is a need for an efficient and well-connected civil aviation system to link the sparsely inhabited areas with major economic centres. And aviation infrastructure is also necessary infrastructure to support trade in and out of the region.'

Air-services agreements that allow civil aviation between countries, and the physical connectivity of airlines, are essential for cargo traffic, Ms Chan says. So it's good for Singapore air-cargo service providers that Singapore has just signed new air services agreements with several Latin American states.

By end-2008, Singapore had air service agreements with Argentina, Brazil, Chile, Mexico and Panama in Latin America. Since 2009, Ms Chan says IE Singapore, which is pushing Singapore companies to go global, has been helping the Civil Aviation Authority of Singapore build a network of air services agreements to link Singapore with major air cargo and passenger routes in Latin America.

Full text in http://www.businesstimes.com.sg/mnt/html/btpre/registration/redirect.jsp?dlink=/sub/specialfocus/story/0,4574,356727,00.html? .

Pteris wants to jive to Latin American beat http://www.businesstimes.com.sg/mnt/html/btpre/registration/redirect.jsp?dlink=/sub/specialfocus/story/0,4574,356734,00.html ?

For more information about IESingapore, please contact
Ms Jocelyn Cai

International Enterprise Singapore

+ 65 6433 4583 tel+ 65 6337 6898 fax

Panama grants naturalization after 10 years...

5 years as permanent resident, 5 years later for the application to be approved.

The past Torrijos administation was happy to announce it has the largest number of ships registered, corporations formed, dollars taxed, tourists received. However, when it comes to naturalizations, 97 new Panamanians a year is good enough.

Will the new Martinelli change things around and arrange to have a backlog of hundreds of naturalization applications resolved?

---

Panamá, domingo 17 de febrero de 2008
EN 2007 SOLO 97 PERSONAS SE NACIONALIZARON.

El lento proceso para una naturalización

Obtener la nacionalidad panameña debe demorar seis meses, pero a veces tarda hasta cinco años.
José Somarriba Hernández
jsomarriba@prensa.com

Cuando *Jessica llegó a Panamá, desde Cantón, en China Continental, tenía cuatro años de edad. Para entonces, su familia no imaginaba que esta tierra sería, 21 años después, su segunda patria.

"Estudié kínder, primaria y secundaria, me gradué con el primer puesto de honor. Me fui a estudiar medicina a Cuba, me recibí de doctora con el segundo lugar en la Facultad de Ciencias Médicas Ciego De Ávila", contó.

Hace dos años, Jessica, quien para entonces tenía 23 años de edad, empezó con los procesos de naturalización, pero no imaginó que sería un trámite "tan engorroso, lento y burocrático".

Explicó que todo ese tiempo, su abogada hizo lo imposible porque le entregaran la carta de naturaleza; sin embargo, siempre tropezó con el "poco importa de las autoridades vinculada al tema".

Jessica dice que al final se cansó y le hizo la petición al presidente Martín Torrijos, personalmente y fue así como consiguió su cometido.

La joven fue juramentada en la Gobernación de Panamá como panameña en enero pasado, aunque solo junto a cinco personas más. Las juramentaciones se hacen los últimos jueves de cada mes. Los trámites de Jessica comenzaron en 2006.

La representante legal de Jessica indicó que, al igual que este caso, tiene un cliente que pasa por el mismo problema: "Es un muchacho que llegó desde China con tres años de edad y estudió toda la escuela aquí, incluso se está graduando de arquitectura en la Universidad de Panamá. De no obtener su naturalización no podrá trabajar de arquitecto".

LOS COSTOS

La jurista explicó que el trámite de la carta de naturaleza tiene un costo de unos 2 mil 300 a 2 mil 500 dólares.

Cuando entra la solicitud de naturalización a la Dirección de Migración, se debe pagar 20 dólares.

Luego, 50 dólares más en el Tribunal Electoral, para hacer un examen de geografía, historia y política de Panamá.

Haber estudiado la escuela secundaria en Panamá exime de esta prueba, pero igual debe pagar los 50 dólares.

Después la solicitud es enviada al Ministerio de Gobierno y Justicia y, de allí, al Consejo de Seguridad para, a través de Interpol, conocer si el peticionario ha cometido algún delito.

"Lo malo es que si le hallan alguna falta, por mínima que sea [incluso, una infracción de tránsito] le niegan la naturalización", sostuvo.

Luego de esto, el consejo manda una nota en que recomienda aprobar o negar la carta de naturaleza. Tras lo cual el Presidente debe firmarla.

Ya con la firma, la carta de naturaleza –un documento en forma de diploma– se deben pagar 300 dólares en Migración por el timbre que lleva y 10 dólares más por la caligrafía.

La persona puede juramentarse luego en la Gobernación de Panamá, proceso que es gratuito. Un abogado, por la tramitación, cobra entre mil dólares y 2 mil dólares.

MUY BUROCRÁTICO

Otro abogado, que prefirió no ser identificado, explicó que el proceso es "muy burocrático", pues debe durar unos seis meses, pero en algunos casos tarda hasta cinco años.

"Tengo clientes desde el gobierno pasado y algunos tienen casi cinco años de estar esperando la naturalización. De hecho, cuando el documento llega al Consejo [de Seguridad] se siente una alegría, pero el Presidente [Martín Torrijos] no los firma. Ni a las notas ni a los impulsos procesales le hacen caso", explicó.

El jurista comentó que tiene poco más de 200 clientes que todavía están a la espera, algunos desde hace cuatro años. De hecho, desde que llegó el actual gobierno, se han aprobado solo tres cartas de naturaleza.

"Una porque la persona se le plantó al Presidente, y las otras dos porque se trata de dos hermanas que tienen un conocido en el Partido Revolucionario Democrático", indicó.

Tayra Barsallo, subdirectora de Migración, dijo que el proceso de las naturalizaciones está contenido en el artículo 10 de la Constitución que sirve de base a su solicitud, la Ley 7 de 14 de marzo de 1980 y el Decreto 59 de 4 de agosto de 1988.

"Quienes aspiran a nacionalizarse deben cumplir con los requisitos de la Constitución y las instituciones", añadió.

Se trató de tener una versión de la Presidencia, pero se nos comunicó que se encontraban en una reunión extraordinaria. *Nombre ficticio

Full text in http://mensual.prensa.com/mensual/contenido/2008/02/17/hoy/panorama/1267383.html



DRAFT TRANSLATION
Panama, Sunday February 17, 2008

In 2007 only 97 people were naturalized.
The slow process of naturalization
Obtaining the Panamanian nationality should take six months, but sometimes takes up to five years.

Somarriba José Hernández
jsomarriba@ prensa.com
* When Jessica arrived in Panama, from Canton in mainland China, she was four years old. By then her family could not imagine that this land would, 21 years later, his second home.

"I studied kindergarten, primary and secondary education, I graduated with first place of honor. I went to study medicine to Cuba, I got my doctor for the second place in the Ciego De Ávila School of Medical Sciences" he said.

Two-year-old Jessica, who by then was 23 years old, started with the process of naturalization, but never imagined it would be a formality "as cumbersome, slow and bureaucratic.

He explained that all that time, her attorney did the impossible because he handed the letter to nature, but always ran into the "little matter of the authorities linked to the issue."

Jessica says that eventually grew tired and made a request to President Martín Torrijos, and was personally and got his mission.

She was sworn in the Government of Panama and Panama in January, but only with five others. The oath was made last Thursday of each month. Jessica formalities began in 2006.

Jessica's legal representative said that, like this case, a customer that goes through the same problem: "He's a guy who came from China three years and studied the entire school here, even graduating in architecture at the University of Panama. Due to his failure to obtain naturalization he may not work as an architect. "

COST

The lawyer explained that the pending nature of the letter will cost about 2 thousand 300 a 2 thousand 500 dollars.

When he enters the naturalization application to the Immigration Department, it must pay $ 20.

Then $ 50 more in the Electoral Tribunal to make an examination of geography, history and politics of Panama.

Have studied high school in Panama exempt from this test, but still must pay $ 50.

After the application is sent to the Ministry of Government and Justice and, hence, the Security Council, through Interpol, to know if the person has committed a crime.

"The trouble is that if you find a fault, however minimal [even a traffic violation] denied naturalization," he said.

After this, the council sent a note to recommend approval or deny the certificate of naturalization. After which the President must sign it.

Since the signature, the letter of nature-a document in the form of diploma-$ 300 must be paid by the bell on Migration and carrying $ 10 more for the calligraphy.

The person may then be sworn in the Government of Panama, a process that is free. A lawyer for the processing, charging between thousand and 2 thousand dollars.

Very bureaucratic

Another lawyer, who declined to be identified, explained that the process is "very bureaucratic" because probably take about six months, but sometimes takes up to five years.

"I have customers from government and some have spent almost five years of waiting for naturalization. In fact, when the document is the Council [Security] feel a joy, but President [Martín Torrijos] not the firm. Neither the notes or the process you ignore impulses, "he said.

The lawyer said he has little more than 200 customers are still waiting, some for four years. In fact, since joining the present government has approved only three letters of nature.

"A person because he planted the President and the other two because they are two sisters who have an acquaintance in the Democratic Revolutionary Party," he said.

Tayra Barsallo, Deputy Director of Immigration, said the naturalization process is contained in Article 10 of the Constitution that underlies its application of Law 7 of 14 March 1980 and Decree 59 of August 4, 1988 .

"Those who aspire to become citizens must meet the requirements of the Constitution and the institutions," he added.

We tried to have a version of the Presidency, but we were informed that they were in a special session. * Fictitious name

Singapore: Latin America's Asian Partner

Panama has a Free Trade Agreement with Singapore and this year will be participating in the Latin Asia Business Forum http://www.latinasiabiz.com/ starting November 12. The conference coincides with the Asia Pacific Economic Conference APEC http://www.apec2009.sg/ which is attended by Mexico, Peru and Chile as Latin American countries.

Singapore companies doing business in Panama include ST Aerospace (Panama Aerospace Engineering) at former Howard AFB, CrimsonLogic at City of Knowledge and soon PSA at the future Farfan port.

---

Monday, September 17, 2007
Singapore: Latin America's Asian Partner

Latin America is becoming more important for Singapore. Latin American companies can use Singapore as a bridge to China and India.

BY SATVINDER SINGH

Latin America is an increasingly important market for Singaporean companies. At the same time, we are beginning to feel more of Latin America's presence and interests in Asia. (..)

The only other combined market that outpaces this growth is Australia and the Middle East, but their base is too small for real comparison. Singapore's trade with Latin America has also been increasing. Between 2004 and 2006, total trade involving Singapore and Latin America grew at an average of 29.1 percent per year to $7.8 billion. However, this constitutes only 1.46 percent of Singapore's total trade.

In terms of investments, it is lesser known fact how much a small nation like Singapore invests in Latin America and the Caribbean. We have invested about $28 billion, albeit much of it directed towards tax havens such as British Virgin Islands, the Cayman Islands and Bermuda. Nevertheless, Singaporean companies have made significant, direct long-term investments in the region. At the end of 2004, Singapore's stock of investments in Brazil ($129 million) and Mexico ($556 million) made us Asia's second largest source of foreign direct investment (FDI) in each of those countries. Only Japan surpassed us.

What is more significant is the fact that our companies are not investing in resource assets. Instead, Singaporean companies are investing in high employment-generating sectors. Our footprint in the region numbers more than 60 companies in 21 countries throughout Latin America and the Caribbean. Unfortunately, the same cannot be said of Latin American companies in Asia.

In a survey conducted by International Enterprise (IE) Singapore last year, we found that companies generally venture into Latin America due to demand for their products and services. More encouragingly, 85 percent of respondents reported that investments have been profitable. Reflecting confidence in business opportunities, more than half (53 percent) of survey respondents expressed an intention to further expand Latin American operations. If we had done a similar survey looking at Singaporean companies doing business in China and India, I do not think we would have found a similar level of profitability.

Today, China and India account for 37 percent of the world's population and constitute 18 percent of the global economy. We can only expect these figures to grow in the foreseeable future, given both real gross domestic product (GDP) growth and the level of private consumption in Asia. It is becoming apparent why most Boards of Directors of Asian and Latin American companies are forcing their business development teams to come up with an Asian strategy.

Two or three years ago, in my position at International Enterprise Singapore­a government agency responsible for helping Singapore-based companies to internationalize operations and foster the development of Singapore as a thriving global trading hub­there was a little procrastination when I wanted to meet Latin American multinational corporation executives. Today it is different; they want to meet and see how we can help with their Asian strategy.

SINGAPORE AND CHINA

The sheer size and strength of China's economy poses both challenges and opportunities. Singapore's strategy has been to identify niches and complementary areas where we can add value rather than directly compete.

In 2006, Singapore's trade with China stood at $55 billion, an increase of 27 percent over the previous year, making it Singapore's fourth largest trading partner. Since 1997, China has also been the number one investment destination for Singaporean companies. Singapore is China's seventh largest investor, having accumulatively invested more than $15 billion.

Singapore's relationship with China is marked by a very significant role that we played in the early stage of its open door policy. In the late 1980s, our ex-Deputy Prime Minister Mr Goh Keng Swee acted as an economic advisor to Shenzhe­China's first special economic zone.

In 1994, the two countries strengthened their relationship by jointly embarking on a large-scale township development project­the Suzhou Industrial Park (SIP). Today, the SIP is a well-managed and integrated township of over 70 square kilometers with excellent infrastructure and a high-quality environment, accommodating 80,000 residents. It has attracted $16 billion in investment, and since inception, its GDP has grown at an average of 45 percent per year.

However, the picture was not always rosy. We did go through our learning curve. We learned that it was not enough to just cultivate relationships at the central government level. From the SIP project, it became clear that relationships should be built at the provincial and municipal levels. It seems obvious today, but in 1990s it was not so apparent.

To ensure these strong relationships continue, we have since adopted several approaches. First, we are using political platforms to strengthen relationships. We have established several G-G level platforms. At the central government level, we have the Joint Council for Bilateral Cooperation chaired by the Deputy Prime Ministers from both countries. Also, we have developed provincial-level Business Councils to raise awareness about business opportunities and to facilitate Singaporean companies' commercial interests in certain provinces. These Councils allow stronger relationships to be built between the political leadership and also provide avenues for co-investment and dispute resolution.

We are also helping Singapore-based companies internationalize in China. IE Singapore has set- up offices in nine locations in China to provide on-the-ground support for our businesses. Importantly, we have chosen to be selective in our approach and focused on a few key sectors where Singapore companies have solid track records and international reputation (e.g. environmental engineering, water and waste water treatment, healthcare management, education services, infrastructure, and industrial park development).

To attract Chinese investment, Singapore is positioning itself as a gateway to the global economy. Our wide network of free-tade agreements (FTAs), excellent logistics and communications network, and similar language and cultural background make Singapore a natural choice. To date, over 2,300 Chinese companies have established operations in Singapore. Of them, 116 companies have also chosen to list in Singapore to capitalize on our corporate governance standards and capital market depth.

SINGAPORE AND INDIA

Bilateral trade between India and Singapore has grown to record levels, reaching $13 billion in 2006, an over 20 percent increase from 2005. Singapore investments in India have also grown. We are India's seventh largest inward investor country with cumulative investments worth $1.6 billion. In 2006, Singapore was India's second largest investor.

How have we strengthened our engagement with India? In the last three years, Singapore secured a solid FTA with India. The Comprehensive Economic Cooperation Agreement (CECA) is providing the framework for a more attractive business environment. The Indian government has also recently decided to set up special economic zones (SEZs) to provide a catalyst for the growth of manufacturing and export sectors. Singapore and India have agreed to jointly set up an SEZ in India, and both sides are working to implement it.

In return, Indian companies have also found Singapore to be a logical springboard to other markets. The more than 2,000 Indian companies in Singapore are using our infrastructure and services to do business globally.

If you are wondering why this is happening, I will let you in on the best kept secret in the business world: the Singapore government has been actively supporting and investing in the export growth of foreign companies based in Singapore that are doing business in Asia and beyond. We provide incentives and grants for business development being coordinated from Singapore for the rest of the world. Shouldn't Latin American companies wanting to grow in Asia also join the club?

Satvinder Singh is the Americas Regional Director at International Enterprise Singapore. This column is based on a Viewpoints Americas from the Americas Society and the Council of the Americas.

Full text in http://www.latinbusinesschronicle.com/app/article.aspx?id=1640

Panama Instant Passport Program

The "Instant Passport Program" refers to the Rentista visa or Temporary Residence Visa as an Independent Retired http://mypanamalawyer.blogspot.com/search/label/rentista, which has maintained the advantage of an identification booklet whith the same cover as a normal Panama passport - it even reads "Pasaporte" in its front cover. You can see its content in See http://mypanamalawyer.blogspot.com/search/label/second%20passport Panama authorities clearly warn that this is not a passport and should not be used as a travel document, even though some anxious peddlers on the Internet call it a passport. It is meant more as a fancy picture ID and does not grant Panama citizenship. --- En date de : Sam 7.11.09, bryan88 a écrit : De: bryan88 Objet: Panama Instant Passport Program Date: Samedi 7 Novembre 2009, 1h01 To Mypanamalawyer There are various websites offering an instant passport from panama stating you only need to deposit money with the national bank of panama for 5 years and you get a passport and residency. I just wanted to find out if it applies and if so,what are the details. I am a South African citizen planning on relocating to Panama within the next year or so and wish to relinquish my South African citizenship but would lose my current passport if I do. If you could please be so kind as to advise me on what to do. Many Thanks

Panama - a trust jurisdiction in a Civil Law region

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PANAMA – A TRUST JURISDICTION IN A CIVIL LAW REGION

Panama is traditionally considered a Civil Law jurisdiction like the rest Latin America where judges construe the law as stated in Codes. However, its long relationship with the United States makes it an exception in a region where laws originate from French Civil Code. As of this day:

• the U.S. Dollar is currency of legal tender since 1904,

• the 1917 law of commercial paper is based on the U.S. Uniform Negotiable Instruments Law,

• the 1927 corporation law is based on the law of Delaware of the time,

• trusts may be formed since 1925.

The original 1925 law was changed in 1941 and finally its current version of Law 1 of 1984. Its main features are:

1. Simplicity of execution: Trust deeds may be granted by private document, granted by the settlor before a Notary Public anywhere in the world.

2. Contractual freedom: A settlor can grant a deed with any clauses or distribution plans as long as they are not contrary to law, morality or public interest. This extends to allow the possibility of post-mortem distributions different from those of the settlor's estate laws or forced heirship rules. The law also allows practitioners to draft trust deeds for execution of Sharia-complaint trusts or appointing a protector as a limit to trustee powers.

3. Duration: The duration of the trust can be indefinite, which represents a change from the rule against perpetuities in the previous 1941 law.

4. Confidentiality: Trust deeds do not need to be made public by their registration (unless real estate in Panama is being settled). The trustee and its employees are subject to a duty of confidentiality. Breaches of said duty are subject to imprisonment or monetary fines.

5. No citizenship requirements: Individuals or entities of any country can serve as settlors, trustees or beneficiaries. None of the parties need to be Panamanian, except for the attorney which serves as resident agent.

6. No trustee requirements: Any capable person or entity may serve as trustee and does not need to be authorised by a government authority, unless they market themselves as such on a regular basis. Trustees serving as commercial custodians may seek to apply for a trustee license from the Superintendent of Banks in which case the trustee is subject to quarterly reporting, capital adequacy ratios and know-your-customer rules similar to those of banks.

7. Charitable or for-profit purpose: Trust provisions may appoint a general class of beneficiaries or unborn beneficiaries. Alternatively, trusts may also serve for commercial transactions, such as securitization of receivables or other assets.

8. Revocability option: Trusts are irrevocable by default, unless parties decide otherwise.

9. Separate patrimony: Trust assets are deemed as separate from assets of the settlor and trustee. Therefore, creditors of the settlor¹ or trustee – such as commercial creditors or inheritance creditors in probate cases - cannot seize assets settled. Trust assets may be seized for liabilities incurred or damages caused from the performance of trust or by third parties when assets have been transfered or withheld by fraud.

10. Low local taxation: Income earned from assets located abroad or funds held in any bank in Panama are exempt from local Panama taxes. However, legislation from the countries of residence or citizenship of the settlor or trustee may impose additional tax obligations.

11. Minimum reporting requirements: Trusts without assets in Panama or not earning income in Panama are exempt from having to file tax returns or financial statements. Trustees are required to render account of their performance to the beneficiaries and maintain a duty of care under the bonus pater familiae standard.

Conflicts of Laws

The trust is subject to Panama law once it is stated in the trust deed. However, parties may agree to settle disputes under foreign law.

Disputes by default are resolved by Panama courts under a summary procedure with a shorter evidentiary stage. Parties may agree to have controversies settled by arbitration or before foreign courts.

Panama trusts may be transferred to another country when the trust deed allows so.

Foreign trusts may be subject to Panama law, as long as the trustee alone or jointly with the settlor, states so.

Foreign trusts are subject to Panama law, when enforcing their rights in court.²

Panama is not a member of The Hague 1985 Convention on the Law Applicable to Trusts and on their Recognition. Panama courts have cooperated in international service of process under international comity rules, but strictly enforce confidentiality and trust privilege granted by trust law³. National treatment is granted to nationals under Bilateral Investment Treaties (with U.S. and other countries) and Free Trade Agreements (Singapore and – pending ratification by Congress - U.S.).

1A vehicle held in trust by a trustee company for the benefit of its driver, cannot be seized by a government-owned bank to satisfy consumer debt of said driver. Decision of March 2, 2004, by Supreme Court of Justice – Administrative Section, Case 281-08.

2When a will granted in Panama by a St. Kitts national which appointed a St. Kitts & Nevis trust as heir. The trustee of the Nevis trust – not the trust itself - was held to be the rightful representative of the heir, because both Panama and St. Kitts trust laws consider the trust to be a relationship between settlor, trustee and beneficiary but not a separate entity in itself. Decision of May 4, 2007, by First Superior Tribunal of Justice, In re Estate of Wilson Charles Lucom.

3Two Panamanian principals of a BVI trustee company may answer the deposition requested by Polish authorities through exequatur but not provide copies of the trust documents. Decision of December 30, 2004, by Supreme Court of Justice – General Affairs Section, Case 110-04.

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See also:
Should You Use an Offshore Entity?
US forms required for Panama trust and other non-US entities

Oct 15 is last day to report offshore accounts

A message from the IRS to those US taxpayers who have not disclosed offshore accounts...

Taxpayers Have Until Oct. 15 to File Extended 2008 Tax Returns; Offshore Voluntary Disclosures Also Due

IR-2009-87, Oct. 1, 2009

Listen to an Audio File for Podcast Watch a Video

Deadline nears for Special Offshore Voluntary Disclosures

Oct. 15 is the deadline for special voluntary disclosures by taxpayers with assets in previously undisclosed offshore financial accounts.

Under the special provisions issued in March, taxpayers with these accounts originally had until Sept. 23, 2009, to come forward. Those taxpayers who do not voluntarily disclose their accounts by Oct. 15 face harsh civil penalties, where applicable, and possible criminal prosecution.

Tax professionals or individuals who want to initiate a voluntary disclosure should call their local IRS Criminal Investigation office. Individuals or their representatives may either contact the nearest Special Agent in Charge, IRS Criminal Investigation, stating their wish to make a voluntary disclosure, or provide a letter outlining information needed to assist the IRS in determining their acceptance into the voluntary disclosure program.

See the Voluntary Disclosure page on IRS.gov for more details.

Taxpayers with questions on the offshore issue may also call the IRS Voluntary Disclosure Hotline (215-516-4777) .

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On September 21, 2009, the IRS announced a one-time extension of the September 23, 2009 deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. Taxpayers now have until October 15, 2009. There will be no further extensions.

The September 23, 2009, deadline for certain FBAR filers and certain offshore-related information returns who have no unreported income is also extended to October 15, 2009. All other guidance included below may still be relied upon. For more specific information regarding the voluntary disclosure of offshore accounts and FBAR filings, see the related items below:

News Release IR-2009-84 and Overview of the Voluntary Disclosure Program

News Release	English	Chinese	French	Korean	Russian	Spanish	Vietnamese
Overview	English	Chinese	French	Korean	Russian	Spanish	Vietnamese

Related Items:

• IR-09-84, IRS Extends Deadline for Disclosing Hidden Offshore Accounts (9/21/09)
• Memorandum on Routing of Voluntary Disclosure Requests
  
• Memorandum on SB/SE and LMSB Offshore Examination Cases
  
• Memorandum Authorizing Application of Penalty Framework
• Questions and Answers (revised 9/21/09) HTML
  
• September 23 Deadline for Some FBAR Filers
  
• Voluntary Disclosure Optional Format Letter (Updated 7/29/09)
  
• IRS Commissioner's Statement on Offshore Income
  
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5 Panamanian banks with worst customer service

Considering that in other countries the Republic National Bank of New York was involved in money laundering and the list of failed banks keeps getting longer, Panama is known as a country with adequate financial supervision and a tough place where to open a bank account.
When it comes to customer service, Panamanians are very demanding. In a 3 million people country with 100 banks, customers swap stories about which banks have better or worst service.
A local survey finally came up with the list of the 5 banks with the largest number of customer service complaints. The winners (or losers) are
HSBC http://www.hsbc.com.pa/ (25,7% of those polled),
Citibank http://www.citibank.com/panama/
Banistmo http://www.banistmo.com/ (now acquired by HSBC, further increasing its lead)
Banco Nacional de Panamá http://www.banconal.com.pa/
Caja de Ahorros http://www.cajadeahorros.com.pa/ .

The common element in the worst 5 is that they are US-owned or Panama-government owned. Panama shareholder-owned banks such as Banco General, Credicorp, and Banvivienda are not among the top 5 and their e-banking systems are very good.

If a written complaint to the bank has not been anwered satisfactorily after 30 days, customer service complaints must be submitted to the Superintendencia de Bancos, which has in their website:
- New Guide for Claims in Spanish
- Recommendations for Customers in English
- Customer Complaint portal in Spanish

An acountholder is always free to:
- File a Criminal Complaint (if misappropiation or a felony occurred) before the Department of Judicial Investigations DIJ
- File a Civil Complaint in court through an attorney. If a complainant really wants to get even, a bond for 20% can be posted of the amount claimed in order to seize assets from the bank for the duration of the case.

A Spanish translator is always needed because complaints are only handled in Spanish.

Capital Financiero printed an article on the survey.

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BANCOS Y CLIENTES
Evalúan sector bancario
La firma encuestadora Dichter & Neira realizó a solicitud de Capital una encuesta con la finalidad de conocer la penetración de productos y servicios bancarios en Panamá.
En tal sentido se realizaron entre vistas a 420 clientes y a 109 banqueros de la plaza. La investigación se hizo vía telefónica durante el período comprometido del 23 al 26 de junio de 2009.
En el estudio se preguntaba a los clientes si había hecho algún cambio en sus hábitos por la crisis y el 90 % dijo que no y un 9.1% que sí.
Un 28,3% de los encuestados dijo también que hizo cambios, principalmente en el sentido de gastar menos, 15,2% que usó menos su tarjeta de crédito y 8,7% dijo que eliminaría su tarjeta.
Sobre la preferencia para elegir entre un banco y otro, más del 50% de los clientes consultados respondió que elegía en base a los tipos de interés, gastos bancarios y la atención que brindara el banco.
En cuanto a cuál era el banco preferido para depositar su dinero, el 65,5% se enfocaba en bancos grandes y el 21,9% le era indiferente y el resto se enfocaba por los pequeños.
Dichter & Neira fue más allá y pidió a los encuestados que dijera en cuanto a tamaño cuál era de su preferencia. En tal sentido, el 65,5% se orientó a los bancos grandes, 12,6% pequeños y 21,9% le era indiferente.
Sobre la satisfacción con la atención y servicios, hay que tener presente aclara la firma encuestadora, que el panameño es condescendiente y por ende califica un poco más alto de lo que en realidad piensa.
En tal sentido de las 420 personas encuestadas un 7% calificó como excelente la atención de los bancos, un 49% la calificó como buena y un 38,9% como regular.
La misma pregunta, pero dirigida a los banqueros, reportó solo un 2,8% como excelente, 64.5% como buena y 32,7% como regular.
El estudio también se enfocó en los servicios en línea que ofrecen los bancos de la plaza. Un 21,7% de los clientes lo calificó como excelente, 57,1% como buena y 18,8% como regular.
Otras de las preguntas en esta investigación fue: ¿Ha interpuesto alguna queja o reclamo por los servicios del banco? Un 91,9% dijo que no y 8,1% dijo que sí. El banco HSBC, concentró el mayor número de quejas de los encuestados (25,7%); seguido de Citibank, Banistmo y Banco Nacional de Panamá.
Pero en qué consistían las quejas de los usuarios de los servicios bancarios, el estudio reveló que un 17,6% se relacionaban con transacciones mal hechas, 14,7% por problemas con su tarjeta y demora en la entrega de documentos y un 11,8% tuvo demoras en sus transacciones.
Al evaluar a los clientes sobre las tasas que cobran los bancos, la mayoría consideró que son razonables.
Capital también pidió a la empresa encuestadora que buscara reacciones en la banca en el sentido de conocer la situación del sector bancario panameño. El estudio realizado constató que los bancos filtran más los clientes que antes (64,6%).
Un 60,6% de los entrevistados vía telefónica dijo que los bancos ponen más dificultades en la solicitud de créditos que antes, también se respondió en mayoría que no se otorgan crédito como antes.
Sobre los productos que se impulsarán este año, los banqueros consultados dijeron en un 23,4% que los préstamos hipotecarios y un 20,6% los préstamos personales y 11,2% las cuentas de depósitos.
En cuanto a la percepción sobre los controles del sistema, el 76,6% de los banqueros consultados dijo que la banca panameña tiene algunos defectos en sus controles que permiten que haya lavado de dinero.

Draft translation
BANKS AND CUSTOMERS Evaluate banking sector
The Dichter & Neira polling firm conducted a survey application for Capital in order to meet the penetration of banking products and services in Panama.
As such views were conducted among 420 clients and 109 bankers in the Square. The research was done by telephone during the commitment period from 23 to 26 June 2009.
The survey asked customers if they had made any change in habits by the crisis and 90% said no and 9.1% yes.
28.3% of respondents also said they made changes, mainly in the sense of spending less, 15.2% used less than credit card and 8.7% said they would remove your card.
On the preference to choose between a bank and another, over 50% of customers surveyed said they chose based on interest rates, bank charges and the care provided by the bank.
As for what the bank preferred to park their money, 65.5% focused on big banks and 21.9% was indifferent and the rest focused on the small.
Dichter & Neira went further and asked respondents to say about what size was his preference. In this regard, 65.5% was directed to large banks, 12.6% small and 21.9% was indifferent.
On satisfaction with the care and services, keep in mind clarifies the polling firm, that the Panamanian is condescending and thus slightly higher scores than they actually think.
In that sense the 420 people surveyed by 7% scored excellent attention from banks, 49% called it good and 38.9% as fair.
The same question, but addressed to the bankers, reported only 2.8% as excellent, 64.5% and 32.7% as good as regular.
The study also focused on the online services offered by banks in the market. 21.7% of clients described it as excellent, 57.1% and 18.8% as good as regular.
Other questions in this study was: Has a grievance filed by the bank's services? 91.9% said no and 8.1% said yes. The bank HSBC, the largest number of complaints of respondents (25.7%), followed by Citibank, Banistmo and National Bank of Panama.
But what the "complaints from users of banking services, the study revealed that 17.6% were associated with bad transactions made, 14.7% for problems with your card and delayed delivery of documents and 11, 8% had delays in their transactions.
In assessing clients about the fees banks charge, the majority considered reasonable.
Capital also asked the survey company to seek feedback on the bench in the sense of knowing the status of the Panamanian banking sector. The study found that the filter banks more customers than before (64.6%).
60.6% of those interviewed by telephone said the banks put more difficulties in the application of provisions previously, a majority also said they are not given credit as before.
On products will be promoted this year, bankers polled by 23.4% said that the mortgage loans and personal loans 20.6% and 11.2% of deposit accounts.
Regarding the perception of system controls, 76.6% of bankers surveyed said the local banking system has some flaws in their controls that let you have money laundering.

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More about the worst 5 in:

Google: 54,500 results for "HSBC sucks"

http://pa.banquejas.com/: Website for bank complaints (guess which is the leader in comlaints)

Forospanama.com: Forum on worst customer service in Panama (U.S. Consular Section is a favorite)

New Panama legislature enacts tax moratorium

The new tax moratorium gives an amnesty on fines on overdue taxes when paid before 2010

The new Panama administration of President Ricardo Martinelli has taken its first major tax initiative by enacting Law 45 of 2009 whereby a moratorium is granted for payment of national taxes collected by Directorate General of Revenue (www.dgi.gob.pa). Under the law, taxpayers are exempt from paying surcharges, interest and fines on unpaid taxes due by June 30, 2009, if they pay at least 30% of said taxes and agree to pay the rest before September 1 within a period of 6 monhts. Tax payment plans signed after September 1 but before December 31 still would qualify for a exemption of fines and 75% discounts on surcharges and/or interest.

Such a tax plan would benefit owners of corporations and private interest foundations formed in Panama who must pay a US$300 annual tax called "Tasa Unica". While Panama corporations and private interest foundations doing business outside of Panama do not have to pay Panama income tax, they still have to pay the US$300 annual tax. Article 318A of the Tax Code also imposes a US$50 fine for every annual tax paid late and a US$300 surcharge after 2 years of delay in payments. Article 3 of the 2001 Supreme Court of Justice Schedule for Legal Services further provides every year for a US$250 Resident Agent Fee and a US$150 nominee director fee.

Lombardi Aguilar & Garcia (www.laglex.com) partner Alvaro Aguilar Alfú finds the moratorium to be useful for investors using Panama entities. "Even if the names of corporate shareholders and private foundation beneficiaries are disclosed to their resident agents under privacy rules, changes in the charter and board of directors must be registered with the public registry. Local laws require that all annual tax payments be up to date when filing said changes, so the moratorium would allow owners of these entities to save on the fines and surcharges which would otherwise have to be paid after 2010," said Aguilar.

The moratorium also covers property taxes due for ownership of real estate at rates of up to 2.1% of the registered value. "Unlike other countries, Panama authorities do not mail or deliver tax statements so property taxes - along with surcharges, fines and interest - may be accumulating without the owner knowing," Aguilar points out. "Many foreign buyers have purchased real estate in Panama, either directly or by purchasing shares of landholding companies or foundations, so this is a good time to ask the local Panama tax office for a statement to pay taxes due without fines and ask counsel in their country of origin about other tax compliance and filing requirements".

About Lombardi Aguilar & Garcia
Lombardi Aguilar & Garcia was created as an alternative for clients worldwide who seek fast, innovative and effective solutions to their legal problems. The firm currently provides services to individual and corporate clients in Panama as well in the Americas, Europe and Asia. Its partners maintain a commitment with professional ethics and social responsibility by participating in the board of directors of groups such as the Panama Bar Association, the German and the American Chambers of Commerce (AMCHAM) of Panama, and the Association of Chinese-Panamanian Professionals (APROCHIPA).

The firm centers its law practice in private client services and asset protection (Private Interest Foundations, Trusts), business structures (Offshore Corporations), tax planning, real estate and e-commerce. It also advices in areas of Law such as Corporate, Commercial, Intellectual Property, Maritime, Tax, and Immigration Law as well as related litigation that may arise.

This release has been prepared for information purposes only. It is not intended to be nor do they constitute legal advice, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

For more information, contact +507 340-6444, e-mail aaguilar (at) nysbar.com, or see: Lombardi Aguilar & Garcia http://www.laglex.com/

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See also Property tax exemption for 20 years #3 property tax.

NY Assistant DA: “U.S. financial transparency: trying to catch up to Panama.”

Adam S. Kaufmann, Assistant District Attorney for New York County State of New York, explained at a hearing why a U.S. company is as good as an offshore company for hiding the identity of its non-U.S. owners:

We regularly speak to law enforcement agents and prosecutors around the world. It is difficult to speak with moral authority in criticizing offshore bank secrecy jurisdictions when they can point an accusing finger back at us. The British Virgin Islands is a well-known (in law enforcement circles) bastion for dirty shell companies, but even the British Virgin Islands can level criticism at the lack of transparency in the incorporation processes in our states. That we were deemed “non-compliant” by the Financial Action Task Force is an embarrassment. That we have made no progress in the three years since then is absurd. Our statement of national transparency standards should be something more than: “U.S. financial transparency: Better than Lichtenstein and trying to catch up to Panama.” Simply put, we lag behind many other countries in the world in this regard, and it makes our statements concerning transparency and tax evasion ring hollow and hypocritical.
Foreign law enforcement authorities even refer to certain states as “offshore U.S. jurisdictions.” And when asked, I am hard-pressed to define why these well-known states are any different from Cayman or the British Virgin Islands. The Committee should also know the imprimatur of respectability that a certificate of incorporation from a U.S. state carries with it, and the access it gives a foreign citizen to open bank accounts and engage in all manner of business, both legitimate and otherwise. And, for many foreign persons wishing to hide their income in an “offshore jurisdiction,” there is no need to turn to a Caribbean hide-away. In one case where we rendered assistance to foreign prosecutors, we were able to connect the head of a foreign central bank to an “offshore” Delaware corporation. He used the corporate entity to open a bank account in Florida. He used black market money systems (prosecuted in New York) to move funds to this secret account he held in Florida. By obtaining a corporate entity, this corrupt official could rest assured that his funds would be safe in the United States, and his name would not easily be linked to the corporation. I am hard-pressed to find a difference between his use of a Delaware corporation to open a Florida bank account and the use by a U.S. taxpayer of a Lichtenstein corporation to open a Swiss bank account. At the end of the day, both systems provide a security blanket of anonymity for those who seek it.

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Examining State Business Incorporation Practices: A Discussion of the Incorporation Transparency and Law Enforcement Assistance Act
Thursday, June 18, 2009 02:30 PM Dirksen Senate Office Building, room 342 The hearing will examine the impact of the "Incorporation Transparency and Law Enforcement Assistance Act," S. 569, which would create a minimum standard--and greater transparency--for the ownership information businesses have to provide to states when they form a business.
Member Statements
Senator Joseph I. Lieberman [View PDF]
Witnesses
Panel 1
Janice Ayala [view testimony] Deputy Assistant Director, Office of Investigations, U.S. Immigration and Customs Enforcement U.S. Department of Homeland Security
Jennifer Shasky Calvery [view testimony] Senior Counsel to the Deputy Attorney General U.S. Department of Justice
The Honorable Elaine F. Marshall [view testimony] Secretary of State State of North Carolina
Adam S. Kaufmann [view testimony] Assistant District Attorney for New York County State of New York
Harry J. Haynsworth [view testimony] Chair, Drafting Committee on Uniform Law Enforcement Access to Entity Information Act Uniform Law Commission
http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=ef10e125-2c1d-4344-baf1-07f6061611c1