OFFSHORE E-COMMERCE

PANAMA
OFFSHORE SOLUTION

TAX FREE PANAMANIAN CORPORATION

CORPORATE AND MERCHANT ACCOUNTS

OFFSHORE TAX PLANNING STRUCTURE

MERCHANT ACCOUNTS
Internet Merchant Accounts are designed to facilitate credit card transactions over the internet. If you operate an online business and do e-commerce, we have the perfect solutions for you to obtain privacy, and avoid all of the burdensome rules and regulations surrounding online e-commerce in your domestic country.

ESTABLISHING A TAX FREE OFFSHORE INTERNET
E-COMMERCE BUSINESS
Establishing a tax free offshore internet e-commerce business involves three simple steps:

1. Incorporation of tax free Panamanian corporation – International Business Company.
2. Establishment of a bank account where the proceeds of your online credit card transactions can be deposited into.
3. Establishment of an online internet merchant account.

INTERNET MERCHANT ACCOUNT PROCESSORS
Merchant account processing services are provided by a bank or a third party processor to the merchant. These services include authorization of credit cards, settlement of funds through the bankcard associations (MasterCard, Visa, etc.), depositing of funds into checking accounts, merchant billing, and account activity reporting.

We currently deal with several merchant account processors. The one we recommend for you will depend on your particular business model. Please note that most merchant providers do not accept certain types of high risk businesses, such as online gambling, betting, porn, or sales of addictive substances. However, we have relationships with several merchant processors, so if one particular processor does not accept your business model, then we have others who may (although the set up and processing costs may be slightly higher for high risk credit card processing).

CARDS AND CURRENCIES
Our Merchant Processors can process all of the major International credit and debit cards, including:

- Visa
- MasterCard
- American Express
- Diners Club
- Switch
- Delta
- Eurocard
- JCB

Our recommended Merchant Processors can settle funds due to merchants' bank accounts in any of 13 currencies to any bank worldwide using the SWIFT payment system.

The following is a list of the currencies that transactions can be settled in:
Australian Dollar, Canadian Dollar, Euro, Hong Kong Dollar, Irish Punt, Japanese Yen, New Zealand Dollar, Singapore Dollar, South African Rand, Great British Pound and US Dollar

SECURITY OF SERVICES
The merchant processing service functions under the SSL (Secure Socket Layer) system which codifies the information and this security system is one of the most advanced in the market today. It consists of one secure connection between the merchant and the processor, which guarantees that the information is never lost or reproduced to other parties.

For additional security the Merchant Processor requires that you obtain a digital commercial security certificate for your website forms.

REQUIREMENTS FOR SET UP OF MERCHANT ACCOUNT:
a. Corporate Bank Account:
This is where the proceeds from the merchant account transactions will be deposited.

b. Financial References:
At least 1 financial reference letter (original, dated within 3 months) is required to open the account.

c. Professional References:
At least 1 professional reference letter (original, dated within 3 months) is required to open the account.

d. Letter Describing Your Business:
A letter should be provided with the following information:

1. Summary of your business activities.
2. Description of products and/or services sold online.
3. Jurisdictions your company currently doing business in.
4. Year your company was incorporated.
5. Previous or expected business volume (annual revenues, sales, etc.).
6. Estimated charge-back percentage.
7. Website URL that will be used for selling your product or service.
8. Jurisdiction where site is hosted.
9. Photocopy of passport for all company directors, officers, and legal representatives or signatories of the account.

MERCHANT ACCOUNT F.A.Q.
Q: What is merchant account processing?
A: Merchant account processing services are provided by a bank or a third party processor to the merchant. These services include authorization of credit cards, settlement of funds through the bankcard associations (MasterCard, Visa, etc.), depositing of funds to checking accounts, merchant billing, and account activity reporting.

Q: How do I get a merchant account?
A: The first step is to establish an offshore corporation. Next, you will need to establish a bank account for your corporation. Finally, the merchant account is established through one of our correspondent merchant processors. The application process is relatively simple, and just requires that you complete with the necessary documentation.

Q: What credit card types can I accept?
A: Through our recommended merchant processors, you will automatically be set up to accept Visa, MasterCard, American Express, Diners Club, Switch, Delta and JCB transactions. However, other merchant account processors may only accept certain cards.

Q: How long does the application approval process take?
A: You can start accepting credit cards immediately after the application is accepted and your merchant account is activated. The application process takes from 2 to 4 weeks, depending on whether all of the necessary documentation is complete.

Q: Can I start accepting credit cards immediately?
A: Yes, once your account is approved and activated, you may commence processing of credit card transactions immediately.

Q: How will I get paid for credit card transactions?
A: Funds are automatically transferred to your business checking account via an electronic wire transfer after a transaction has been "captured" and settled for payment. The time frames for payments range with each merchant processor, some pay within 72 hours, others within 2 weeks. Please note that certain "hold-backs" (generally a small percentage of the transactions, around 5 to 10%) may apply, depending on the risk level of your business. The "hold-backs" are released after a certain time period, generally within 30 to 180 days (depending on the risk evaluation performed by the merchant processor).

Q: Is there paperwork to sign?
A: Yes, applications will need to be couriered or emailed to your address; you would need to return the signed applications along with the required documentation to commence final approval. Once final approval occurs (normally around 2 weeks after the merchant processor receives the original paperwork) you will then be able to begin processing.

Q: Will I need to purchase additional equipment?
A: No. All you need is a web browser and Internet access to utilize the Virtual Point Of Sale (POS) terminal. Use this to authorize/settle transactions, view orders, manage recurring billing and more!

Q: Will I receive statements?
A: Yes. Our recommended merchant processors offer you Internet-based reporting, that gives you online access to review your daily sales, financial history, and other pertinent account information. In addition you will receive a paper statement at the end of each month.

Q: What type of bank account do I need?
A: A business checking or savings account is required. Your bank will be credited and debited via wire transfer.

Q: If I am a new start up company without a credit history, will my company get approved?
A: There are no strict credit requirements. Any business can be approved. The merchant provider that is used depends on the business model of the particular business.

Q: I need a merchant account for processing online gambling transactions for my online casino. Can I be approved?
A: Yes. We may be able to find a correspondent merchant processor that allows online gambling.

Q: I already have a retail merchant account. Why do I need another one?
A: Financial institutions and the Visa / MasterCard card Associations have different criteria for evaluating the potential risk involved in credit card transactions where the card is not physically presented to the merchant. This type of business is typically referred to as "card not present" or "MO/TO" (mail order/telephone order). For this reason, a separate merchant account is needed.

Q: What is a payment gateway?
A: A payment gateway is a service that gives merchants the ability to perform real-time credit card authorizations from a web site over the Internet. The Gateway is an encrypted channel that passes the transaction securely from your customer's computer to the financial institutions to capture the authorization and approval. Once the transaction is complete, the information is sent back through the Gateway to complete the order and provide you with verification. The Gateway offers many administrative features such as: viewing orders, keeping sales tax records, account maintenance, etc.

Q: How do I get my gateway set up?
A: Our merchant processors provide you with a complete turnkey solution. When you apply and are approved for an account, the gateway is automatically set-up.

TAKE ADVANTAGE OF OUR CORPORATE PACKAGE
Our Panama Corporation Package includes the following:
1. Panama Corporation complete with:
a. Original Articles of Incorporation (in Spanish),
b. Official English Translation of Articles of Incorporation,
c. Resident Agent,
d. Registered Office,
e. Optional Nominee Directors
f . Pre-signed, undated nominee director resignation letters,
g. Share certificates issued to "The Bearer", or to any person or entity that you designate (Foundations do not have shares),
h. First Minutes of the Board (whereby the subscribers renounce their legal rights to one share each),

2. General Power of Attorney - We will provide a General Power of Attorney, (notarized and apostilled). The person whose name appears in the Power of Attorney can then actually operate the corporation, sign contracts, open and operate bank or brokerage accounts etc.

3. Introduction to Internet Merchant Account Processor

4. Offshore Corporate Bank Account
Corporate Bank Account includes:
a. Internet Access to account.
b. Investments in time deposits (Certificates of Deposit).
c. Reputable, licensed, secure international bank.
d. English speaking customer service.
e. Corporate Credit cards available (optional) for access to cash via ATM's around the globe.

INCORPORATION IN PANAMA
To obtain a full report and information about the advantages to incorporate an IBC in Panama, please click here.

We hope this proposal may deserve your analysis and consideration but, in case you may place any question, or discuss any further related matter, please do not hesitate to contact us.

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