"We are focusing sales and marketing efforts on our Panama solution in response to increasing demand from our referral partners across the US, and merchants who approach FAC directly," says Andrea Wilson, FAC CEO. "They are wanting leading-edge international payment processing solutions to be able to expand their Internet business to consumers in the thriving Latin American market."
An eCommerce bill was signed into law by Panama's President, Mireya Mosocoso in July 2001 making the countryâs legislation favourable to Internet businesses, particularly those in the health and pharmaceutical industries as well as hospitality.
"Panama leverages the U.S. dollar as its legal tender, virtually eliminating any currency exchange risks to foreign companies operating there," says Andrea. The country has maintained an annual inflation rate of under two percent for the last 40 years, and just 1.1 percent in 2001 â one of the lowest in years. Panama's economy has become one of the healthiest in Latin America, in spite of the Latin American economic crises.
Taxation in Panama, which is governed by the Fiscal Code, is on a territorial basis; this is to say, that taxes apply only to income or gains derived through business carried on within Panama itself. The existence of sales or administration offices in Panama, or the re-invoicing of external transactions at a profit, does not of itself give rise to taxation if the underlying transactions take place outside Panama. Dividends paid out of such earnings are free of taxation.
"As part of enhancing its Panama eCommerce solution, FAC has worked closely with the banking community in the region to formulate appropriate guidelines, says Andrea.
To qualify for FACâs Panama eCommerce solution, merchants should process a minimum of USD $20,000 in sales per month, must be willing to complete the necessary merchant application form, provide valid due diligence documentation and have a minimum of 6 months credit card processing statements.
To assist potential merchants in setting up the appropriate business structures required by the Card Associations compliance with cross border rules, FAC has developed a relationship with Panama-based Fidex Group, S.A., an International Corporate and Fiduciary Services firm providing expertise in company formations. Fidex is able to complete the required Panama corporate structure for Internet merchants.