Panama Bank Account

The Best Bank Account for You

In Panama there are a lot of different banks, both local and international, in this article we will focus on personal bank accounts, for standard purposes. Having a bank account in Panama could be useful for receiving your salary from a local company, to make day by day payments, paying your rent and taxes, etc.

Most banks in Panama are expat-friendly and with English support, do not charge ATM fees and get you a savings account which generates a return of around 2% per year. The local banks also offer a savings option that guarantees higher return (“plazo fijo”) but is needed to keep your money blocked for 6 months at least.

Panama Banks

Local Banks

Banco General, the first and largest Bank in Panama by market capitalization, with more than 1 million clients.
Banco Nacional de Panama, is the second largest Bank in Panama and one of two Panamanian government-owned banks.
Banistmo, part of a Latin American financial group, is one of the largest banks in Panama and Central America.
BAC, BAC Credomatic is a financial entity from Central America, with operations in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, and the Bahamas.
Global Bank, a 100% Panamanian bank founded in 1994. It has 38 branches across Panama and more than 141 ATMs all over the country.

International Banks

Citibank, one of the most important U.S. banks, with 4+ trillion dollars in financial flows globally.
Scotiabank, a Canadian multinational banking and financial company, the third-largest Canadian bank by deposits and market capitalization.

Personal Bank account

To open a personal bank account you should meet some requirements regarding the initial deposit, proof of income documentation, and Anti Money Laundering AML.

The first step is to go in person to the selected bank and ask them how to proceed to open the bank account. You could facilitate the process by asking a law firm to identify the bank and help you in the process of opening an account, but usually, it is a process that can be done alone. If for immigration purposes you are already in contact with the lawyer, usually they include this service in the “residency package”.

Every bank could require different types of documentation, by the way, the most common documents are:

Passport and/or Panamanian ID (Cedula)
Current/Last year's tax declaration (Panamanian or foreign)
Proof of wealth and income (invoices, payslips, etc.)
Bank reference letter (Panamanian or foreign)
Professional or commercial reference letter
Curriculum Vitae or Resume
Evidence of your current address (utility bills)
A copy of a second identification document (driver's license)
Bank reference letter, only in some cases.
Bank Forms
Initial deposit, it can range from $1000 to $5000, depending on the bank.

Important Facts:

All the bank accounts are in United States Dollars
In January 2018, the Government of the Republic of Panama signed a Multilateral Agreement between Competent Authorities to facilitate the automatic exchange of information of financial accounts (CRS MCAA).
The amount stated on your annual tax declaration will be used as a reference. You should manage an amount of money based on the info provided.

Corporate Bank account

Having a corporate bank account in Panama may be a good strategy, especially concerning the banking and taxation systems of the country. The overall process is still unproblematic, but there are burdens that relate to paperwork and legal formalities. Below is the procedure for opening a corporate bank account in Panama.

Choose the Right Bank

There are many choices of banks available in Panama which are either local or international. Popular banks for corporate accounts include:

Different banks have different policies and charges so it is recommended to visit the bank policies and find the option that best suits your business. There are some banks which concentrate on serving international business accounts while others might provide better offers for local businesses.

Register Your Company

To open a corporate account in Panama, your business must be legally registered in the country. The process typically involves:

Incorporating your company: This is accomplished through the Public Registry and you will need to hire a local attorney to file the paperwork for the incorporation of your company.

Obtain a Tax ID: You also have to get a “Registro Único de Contribuyentes” (RUC) from the Panamanian tax office, the DGI. Such a tax identification number is required to run an enterprise in the country.

Prepare the Required Documentation

After the incorporation of your business, you have to compile the relevant paperwork to open a corporate bank account. Although the requirements vary slightly from bank to bank, the standard documentation typically includes:

Company incorporation documents: A certificate of incorporation in the country; memorandum and articles of association, and business operating licenses.
Shareholder and director information: Shareholders and directors list, their identification, which often includes passports.
Proof of business address: Telephone, water, electricity or gas bills or lease agreements in the company’s name.
Proof of business activity: Proofs of your business including contracts, invoices, or agreements of the services or products you deal with.
Personal identification: A valid passport of any officer of the company including the letterhead, and secondary I.D. (for instance a driving license).
Bank reference letters: It is also common for some banks to require reference letters from the accounts’ banks in which the business or the owners have their accounts.
Financial statements: There may be some additional documents requested, such as the balance sheet or the income statement especially if the company is operating already.

Inform the Bank: Request to Set Up a Meeting

It is normally a requirement that the company’s legal representative or an attorney in law on behalf of the company needs to visit the Panamanian bank in order to open the account. In this interaction, the bank will always confirm the authenticity of the documents, and in addition, conduct vetting on the representative as well as offer the company an interview to establish the type of business and the amount of banking they are likely going to require.

Deposit the Initial Funds

Every bank will involve a minimum deposit from corporate accounts to the tune of $1,000 to $10,000. This deposit is taken to enable the account but can be credited to the user’s account anytime. You should always ask for the exact amount during consultation with the bank and define the necessary amount of credits you need for your business.

Meet due diligence and Know Your Customer (KYC) requirements

The Panama banking industry is heavily regulated, and all banks are expected to implement the global KYC and AML standards. This means that they will analyze your business activity and the origin of the funds you are using. It is important to give accurate and clear details so that your account application is not delayed or rejected.

Requirements on FATCA Compliance for U. S. Citizens

Special attention is deserved by the FATCA law, under which the bank will be deprived of the right to refuse to cooperate if any of the shareholders or directors is a U. S. citizen or resident. This is a law that puts it as a mandate for banks to bring details of Americans with accounts in other countries. Make sure your bank is on the same page regarding this from the get-go so that it won’t be an issue.

Conclusion

The establishment of a corporate bank account in Panama can be a great idea in reaching the global markets and getting the best banking offers. But it is good to be very elaborate in your documentation and make sure you are abiding to local and international law. However, hiring the services of an attorney or a financial consultant from Panama would help after the process and increase the chances of success.

Off-shore Panama bank account

What is an Offshore Bank Account?

An offshore bank account is a financial account held in a country different from the one where the account holder resides. Offshore accounts are typically used to take advantage of favourable financial, tax, and privacy regulations offered by countries that promote foreign investments. Panama is a well-known offshore banking jurisdiction, renowned for its strict banking secrecy laws and favorable tax policies.

Offshore accounts provide individuals and corporations with several benefits, including:

Confidentiality: Panama’s strict banking privacy laws protect account holders from having their financial information disclosed without their consent.
Tax Optimization: Many offshore jurisdictions, including Panama, offer favourable tax treatment, especially for non-residents whose funds are sourced outside Panama.
Asset Protection: Offshore accounts in Panama can be used to protect assets from potential creditors, lawsuits, or political instability in the account holder’s home country

Before opening an offshore bank account please note that:

In January 2018, the Government of the Republic of Panama signed a Multilateral Agreement between Competent Authorities to facilitate the automatic exchange of information of financial accounts (CRS MCAA).
U.S. citizens can open a bank account in Panama, but there are strict measures that must be followed especially due to the Foreign Account Tax Compliance Act (FATCA) requirements. FATCA forced foreign firms, especially banks to reveal the financial transactions of Americans to the IRS
Like all the other international banks, Panama banks adhere to the KYC policies in order to avoid legal implications. This will entail a thorough examination of your source of funds, and your business activity to consider the Anti-Money Laundering (AML) regulation. There should also be provision of clear and transparent procedures in this process to ensure that there are no delays or rejections.

Can a foreigner open a bank account in Panama?

Foreigners can open personal bank accounts in Panamanian banks. While a Residence Permit in Panama is not required, having one can significantly expedite the process. If you are a foreigner, all banks in Panama will require your current passport to open a savings account. No bank will open a personal account for a foreigner without a passport. Additionally, some banks in Panama do not open accounts for foreigners who do not have a residence permit. However, there are a few banks that do open accounts for non-resident foreigners, such as Scotiabank, Multibank, Banco General and Banistmo.

In the case that you do not have a resident permit in Panama, and do not live in the country, you should facilitate the process by asking a law firm to identify the bank and help you in the process of opening an account. If you contract a lawyer to manage the process of opening a bank account in Panama, you are usually not required to travel to Panama. However, if you travel to sign the forms, it significantly reduces the processing time, and in some cases, the account can be opened within five (5) days after signing. For this, all the bank's required documents must be in our possession. The service fee for remote account opening is around $1,500, while if you are physically present in Panama City, the fee is around $500.

The documentation required will be the same as stated in the previous chapter, which applies to individuals with a resident visa. The list of required documents can be found here.

Once the bank verifies the veracity of your documents, the initial deposit can be made. The initial deposit for a foreigner can range from $2000 to $5000, depending on the bank.

Panama Bank Account for U.S. Citizens

U.S. citizens can open a bank account in Panama, but there are strict measures that must be followed especially due to the Foreign Account Tax Compliance Act (FATCA) requirements. FATCA forced foreign firms, especially banks to reveal the financial transactions of Americans to the IRS and this almost led to some banks in Panama to stop offering their services to the American people without resident permits. However, the following banks in Panama permit U. S. citizens to open accounts: Banistmo, Banesco, BAC if resident in the country, Unibank, Scotia Bank and Citibank for those who are existing customers of this bank and Banco Nacional.

Although it is not necessary for a holder of a U.S. passport to have a residence permit in Panama to open an account, some banks may ask for additional requirements on non-residents. For instance, they will usually request your passport, proof of income, reference letters from your home bank, and another professional in Panama. Also, some of the banks may wish to deal with residents only or those with an intention of getting residency in the near future.

If you have an attorney, your lawyer can mostly save a lot of time and effort in the account-opening process and you don’t have to be physically present in Panama. However, this service often attracts extra charges to the customer.

Transferring Money Internationally

International Bank Transfers

It is important to note that traditional bank transfers provide a very secure method of payment, however, it is normally costly and accompanied by unfavourable exchange rates. Banks charge a fee whose average is between 3%- 5% of the actual transfer amount; the transfer can take between 1- 5 business days depending on the financial institution. Bank wire transfers are relatively slower and more expensive than the other methods, however, it’s a reliable and secure mode of transferring money for bigger deals.

Online Money Transfer Services

Wise, Western Union, MoneyGram, and PayPal are some of the companies which allow you to send and receive money internationally. Such services are often faster and cost less than the traditional international bank transfers. They give you the possibility to transfer money to a bank account, or for cash withdrawal.

Cryptocurrency Transfers

Cryptocurrencies such as Bitcoin provide an alternative way of sending money internationally. This can work efficiently and cost-effectively, but it is crucial to consider the associated risks and the regulations involved in this kind of transfer.

Crypto-friendly Bank in Panama

In Panama, the crypto regulation is still in process. The banks are not willing to accept transfers from crypto platforms or derived from crypto transactions, and in most of cases they will freeze your bank account. The only bank that allows you to make crypto activities is Towerbank.

Towerbank, is a Panamanian financial institution with more than 40 years of banking experience, and the only ”Bitcoin friendly” bank in the country. Towerbank permits you to transfer money from the most common crypto exchanges like Binance and Coinbase.

Sources & Foot Notes

[1] Banco Nacional de Panamá - Official Website
[2] Wikipedia - National Bank of Panama
[3] Wikipedia - Grupo Banistmo
[4] Wikipedia - BAC Credomatic (Spanish)
[5] Citigroup - Official Corporate Website
[6] Wikipedia - Citibank
[7] Popular Bank Panama - Official Website
[8] OECD - Multilateral Competent Authority Agreement
[9] Cointelegraph - Bitcoin-Friendly Top 30 Panama Bank
[10] Cointelegraph - Is Panama Crypto Friendly
[11] Nomadsroute - How to open a Bank account in Panama as a Foreign
[12] Expatra - Banking in Panama