The banking system in Panama is well-established and regulated by the Superintendent of Banks of Panama. Banking in Panama is available to citizens and offshore customers who can open accounts at local, international, and state-owned banks. Thanks to its favorable regulations and tax benefits, Panama is known as an international banking hub. Here’s what to know about the banking system in Panama:
Banking Regulations
Panama licenses two types of banks: Class A and Class B. Class A general license banks operate in Panama and abroad, while Class B international license banks serve non-Panamanian residents only. Panama also has state-owned banks that act as clearinghouses for banking services. The Superintendent of Banks oversees banking in Panama and enforces financial laws, licensing rules, capital requirements, and anti-money laundering compliance. Panama’s strong regulatory framework is responsible for the banking system’s stability, capitalization, and liquidity.
Opening a Bank Account
You can open a bank account in Panama with proof of income, address, and letter of recommendation. Tech advancements have simplified the account opening process, but Panama banks remain conservative. The government requires them to know their clients and business activities to avoid fraud and money laundering. You can get bank referrals for private banking services, investment, and brokerage accounts. Leading finance attorneys help you obtain corporate documents required for banking. Other helpful services include secretarial services for bank forms and documents, nominee director services, and guidance on asset protection and privacy.
Banking Services
Panama offers many banking services, including retail and corporate banking, international financial services, wealth management, and trade finance. You can protect your assets through corporations, trusts, and private interest foundations. The country provides digital banking services and has reliable balance sheets with little exposure to complex financial instruments. Panama also uses the dollar as the legal tender alongside the Panamanian balboa, which has the same parity. The country doesn’t have a central bank and relies on free-market principles and commercial bank reserves.
Banking System Benefits
Panama has strict banking confidentiality laws and doesn’t impose taxes on income from foreign sources. The confidentiality and tax benefits make the country suitable for offshore banking. You can open a bank account under your personal name or on behalf of a corporation. The banking system relies on the latest technology standards, which are more efficient. Using the US dollar also removes foreign exchange controls, and the government has many sponsored foreign investment incentives.
Challenges and Concerns
Banking in Panama offers an offshore banking destination with a more favorable system but has a few concerns and challenges. International scrutiny has led to increased regulatory oversight, with the country introducing double-taxation laws with various OECD countries. The conservative nature of the banking system also results in more scrutiny during account opening. Working with leading financial attorneys mitigates these risks and allows you to open and manage your account from overseas.
Get Started With Banking in Panama
Offshore bank accounts allow you to access commodities, bonds, and mutual funds unavailable in your home country. You can work with a law firm or offshore banking partner to help you understand the system. Contact an experienced finance attorney today to learn more about banking in Panama.
