Hi, I have some questions about law enforcement in Panama. These are different issues but they all obviously relate. Correct me if I'm wrong:
1. My understanding is that "Panama doesn't tax foreign income" is a half truth. It doesn't tax foreign dividends or capital gains. It doesn't tax corporations which don't do _any_ business in Panama _and_ involve only staff who manage or direct other employees or consultants who work outside Panama. Lots of digital nomads who are bona fide employees of companies outside Panama think they can get off the plane and be exempt from local tax, but that's false (if they stay at least 183 days within a calendar year) because they're interfacing directly with clients or employers in a manner that isn't completely managerial. So this is no tax paradise for remote employees. It's more like: don't ask, don't tell, and use a VPN terminating in the client country. Oh, and just pray that the labor department won't just show up one day for a look around, as they've done countless times at various business locations (but maybe not homes).
2. It's a nightmare determining what is and isn't legal to import. For instance, I take some rather aggressive anti-aging drugs, which by and large are repurposed pharmaceuticals. I buy them outside Panama, and mostly under the table (without a prescription). In the US, nobody is going to send me to jail if I'm not selling them. But in Panama? Would they just confiscate them at the airport if they caught me? Or will the police randomly show up at my place for an inspection once in long while just "because"? And if they don't like what they find, but it's not explicitly illegal, then what? They throw me in jail for taking the drugs? I know, for instance, that weed possession carries multiyear jail sentences, but what about some random pharmaceutical or synthetic that I buy or make myself, consume myself, and don't take outside?
3. I've heard that Panama has a guilty-until-proven-innocent "justice" system. So if I were to get involved with some business or romantic partner, all that would need to do is fabricate a police report, and I'm suddenly Big Ernesto's boyfriend later that night? Then I rot in a horrific Panamanian jail cell (which you can actually see on YouTube) with a bunch of narcoterrorists, scorpions, and brown drinking water, for months to years while awaiting my trial. If I'm still alive to see the judge, then and only then, I might be exonerated and freed. What's to stop this from happening? My current understanding: hiding your ass and avoiding all interactions with locals if possible.
I hope I'm just plain wrong about all this. But if I'm not, then I sure as hell hope there's a viable way to avoid trouble, other than just not getting on the plane in the first place. My default assumption is that expats still work normal nomad jobs, still do drugs in one form or other (including explicitly illegal stuff), and still get deeply involved with locals once in a while. They're just either lucky or really good at avoiding the cops. (What I wouldn't give to know how long before it all blows up, on average...)
You may rightly ask: if I believe I'm right about all this, then why do I have any interest in Panama at all? The answer is basically that it has so much going for it in other areas. It sells itself extremely well, and for every horror story I've read, there are probably 100 other stories of expats really thriving there. I know that I can hire a lawyer and get the textbook answers to all this. But what's the enforcement reality? I'm looking for an unvarnished education, for better or worse. Thanks in advance.
1. My understanding is that "Panama doesn't tax foreign income" is a half truth. It doesn't tax foreign dividends or capital gains. It doesn't tax corporations which don't do _any_ business in Panama _and_ involve only staff who manage or direct other employees or consultants who work outside Panama. Lots of digital nomads who are bona fide employees of companies outside Panama think they can get off the plane and be exempt from local tax, but that's false (if they stay at least 183 days within a calendar year) because they're interfacing directly with clients or employers in a manner that isn't completely managerial. So this is no tax paradise for remote employees. It's more like: don't ask, don't tell, and use a VPN terminating in the client country. Oh, and just pray that the labor department won't just show up one day for a look around, as they've done countless times at various business locations (but maybe not homes).
2. It's a nightmare determining what is and isn't legal to import. For instance, I take some rather aggressive anti-aging drugs, which by and large are repurposed pharmaceuticals. I buy them outside Panama, and mostly under the table (without a prescription). In the US, nobody is going to send me to jail if I'm not selling them. But in Panama? Would they just confiscate them at the airport if they caught me? Or will the police randomly show up at my place for an inspection once in long while just "because"? And if they don't like what they find, but it's not explicitly illegal, then what? They throw me in jail for taking the drugs? I know, for instance, that weed possession carries multiyear jail sentences, but what about some random pharmaceutical or synthetic that I buy or make myself, consume myself, and don't take outside?
3. I've heard that Panama has a guilty-until-proven-innocent "justice" system. So if I were to get involved with some business or romantic partner, all that would need to do is fabricate a police report, and I'm suddenly Big Ernesto's boyfriend later that night? Then I rot in a horrific Panamanian jail cell (which you can actually see on YouTube) with a bunch of narcoterrorists, scorpions, and brown drinking water, for months to years while awaiting my trial. If I'm still alive to see the judge, then and only then, I might be exonerated and freed. What's to stop this from happening? My current understanding: hiding your ass and avoiding all interactions with locals if possible.
I hope I'm just plain wrong about all this. But if I'm not, then I sure as hell hope there's a viable way to avoid trouble, other than just not getting on the plane in the first place. My default assumption is that expats still work normal nomad jobs, still do drugs in one form or other (including explicitly illegal stuff), and still get deeply involved with locals once in a while. They're just either lucky or really good at avoiding the cops. (What I wouldn't give to know how long before it all blows up, on average...)
You may rightly ask: if I believe I'm right about all this, then why do I have any interest in Panama at all? The answer is basically that it has so much going for it in other areas. It sells itself extremely well, and for every horror story I've read, there are probably 100 other stories of expats really thriving there. I know that I can hire a lawyer and get the textbook answers to all this. But what's the enforcement reality? I'm looking for an unvarnished education, for better or worse. Thanks in advance.
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