I’m J. Rutherford Moneybags, a founding member of the National Association for the Advancement of Rich People, and I want to take this opportunity to dispel the myths and quash the rumors surrounding the release of the so-called Panama Papers back in 2015.
It is insulting to the NAARP and me personally that the media immediately jumped to the conclusion that the various rich people listed in those documents had somehow broken the law. This naming and shaming is unfair to the wealthy among us.
Why would you automatically assume that setting up a company in Panama means that we are seeking to circumvent tax laws in our home jurisdictions? Whatever happened to the presumption of innocence and the right to be heard?
Believe it or not, there are a multitude of non-tax-related reasons why someone might want to incorporate in Panama. Yet I didn’t hear any media outlets doing the right thing and detailing even one of those legitimate justifications.
Personally, I find it offensive to be called a tax evader and a criminal when my decision to incorporate in Panama was motivated by the best of intentions. Sure, I could incorporate in the United States or any western country for that matter but who does that help? By choosing a developing nation like Panama, the legal expenses and incorporation fees are spent in a country that sorely needs the economic boost that comes from foreign investment.
Without naming names, I would like to detail just a few of the many other legitimate reasons some of my colleagues have had for setting up companies in Panama. For example, those engaged in international trade who deal both in the Atlantic and Pacific regions find that Panama’s proximity to both oceans is a distinct advantage.
Some, on the other hand, have familial ties to this Central American nation. One wealthy friend of mine has two great-grandparents who once lived in the Panama Canal Zone back in the early part of the 20th century while they were engaged in the construction of the Panama Canal. His Panamanian corporations are, in part, a way for him to honor his ancestors.
One dear friend recently explained why he had to set up a Panamanian corporation. “It’s not like I wanted to do it,” he confided. “But I needed a secret place to park some money so that I could surprise my wife with an expensive Christmas gift. If I did it here, it would be a matter of public record and she could have easily discovered what I was up to.”
Another friend said he set up several corporations in Panama simply to avoid giving offense. “Look,” he said. “If I incorporate in the U. S. then I offend all those South American countries but if I choose Brazil or Argentina, say, then the North American countries are annoyed. By choosing a jurisdiction straddling both continents, no one’s fiscal nose is out of joint.”
Then there are those who are lovers of palindromes especially the famous saying “A man, a plan, a canal, Panama!” What better way to celebrate one’s hobby than to set up a company in the land of the palindrome? “A man, a plan, a canard, Panama!” OK, it’s technically not a palindrome but it’s close enough for me and hopefully for the IRS.