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Comparing Banks in Panama with Other Jurisdictions

Panama’s banks are very cautious about which clients they accept. By being careful, our Banks offer great protection to the clients that they do accept. The safer Panamanian banks require a visit to open accounts, but there are no hard-and-fast rules regarding their requirements. Generally, the account is opened by an official who meets the clients or their representatives, but the final approval is made by the compliance officer, who does not come in any contact with the client. Some Panama banks receive as many as 3,000 new account applications most of which go straight into the garbage. The Banks’ compliance officers will not waste their time conducting compliance on applicants who are not legitimate businesspeople and coming from a recognized source. It is for this reason that Panama Banks continue maintaining their extensive correspondent bank network that allows their clients to send and receive international transfers in record time. This is the reason why we are often approached by clients who complain that Panama’s Banks are not as accommodating as the banks in their home country.

Some people send negative emails because they have done a Google search for a Panama Bank Account and read comments like:

 

 

“Panama is getting out of the offshore banking business. ...”
this report is made in a portal operated by a blogger who is posing as a tax lawyer

 

or

 

“While once the "Switzerland of the Americas", Panama banks are no longer the best place to open offshore accounts. … “
this claim is made by another blogger who has swimming pool cleaning experience and has turned to digital marketing pretending to be a globetrotter businessman.

 

These youngsters know how to play with keywords and social media so they can show up at the top of the searches. As long as what they have to say sounds logical, they get some traffic and end up charging much higher fees than knowledgeable law firms with real contacts and extensive experience.

This is how information is served when societies are drowning in an ocean of fake news coming from all sides including the mainstream media and the wana-be financial advisors who in reality are simple marketers. 

The fact is that bloggers could not recommend a client to a Panama Bank even if their life depended on it. So they fabricate stories to justify their incompetence and switch potential clients to opening accounts in second or third grade banking jurisdictions that are willing to collaborate with online marketers.

Panama is one of the few remaining true offshore jurisdictions. Experienced International tax lawyers navigate through Panama’s many tax treaties and legally reduce their clients’ tax exposure. Unlike the insignificant economies of the usual offshore centers, Panama is a full fledged international economy with a solid infrastructure and the top banking center in the America’s. In Panama we will find 130 robust banks with unmatched liquidity and over 3,000 financial institutions offering a large variety of local and international services. Panama hosts the Canal and is the largest global logistics center with the biggest port in the world that is second only to Hong Kong. Combining these advantages with Panama’s Privacy Laws and a Tax Code allowing optional reporting requirements, savvy entrepreneurs find it the ideal jurisdiction to keep their online businesses, do their import/export re-invoicing and establish international headquarters in a way that they can withstand even the most scrupulous audit procedures in their country of residence.

The general requirements for opening a bank account in Panama are the following:

  • A copy of your Passport.
  • A copy of a second ID showing your address (like a Driver's License or a Health card).
  • A copy of a utility bill showing your address.
  • A Bank Reference Letter.
  • A Reference Letter from a Doctor, Dentist, Lawyer, Accountant, Engineer, Registered Real Estate Broker or Insurance Agent.
  • A Visit to Panama for an interview with the bank.
  • Tax Returns or other Proof of Income.

Sometimes, some of the above requirements cannot be met, or need to be replaced by other documentation that assures the bank regarding the client's identity, place of residence, and source of funds. 

There are 150 countries with viable economies and many of them have offshore banks.  The vague term "offshore banks" means that there is bank secrecy, generally regarded as a criminal offense for the bank officers to give information regarding their clients.  The possible combinations of the bank accounts are numerous, but the general consensus is that the best offshore formation is based on a Panama corporation or foundation.  Depending on the client's country of residence, some jurisdictions will be superior because of tax treaties or simpler factors such as time zone and language. 

Some jurisdictions have more requirements than others, just as some banks are more lenient in accepting clients that don't meet all their requirements.  Some clients have specific needs for larger banks, banks with more assets or banks with a wider network of correspondents.  We study our client's specific needs and their ability and willingness to produce the documentation necessary to open bank accounts in jurisdictions that meet their requirements.