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Panama, the best banking in Latin America

calendar 5/15/2020 8:00:00 AM
author Aldemaro Financial and banking

Panama is up to its reputation. This small Central American country is the top banking center in Latin America and one of the best in the world.

Panama is a bridge between oceans, cultures, and continents. It connects South America with the rest of America, the Pacific and the Atlantic oceans, it incorporates the North American, Colombian, African, Indigenous, and its own culture all in one.

After years of being known as the midpoint between two worlds thanks to the Canal, Panama has been one of the best banking jurisdictions in the world. For this reason it is widely known as “the Switzerland of Latin America”, both for its cultural richness and top banking system.

Why? Because of its strong secrecy levels and for its friendly taxation system as Panama doesn´t apply taxes on foreign-sourced income. 

Thus, Panama is an onshore jurisdiction with the benefits of an offshore jurisdiction. Panamanian banks have high-level staff from Switzerland and other top jurisdictions that are the ones who deal with most of their foreign clients.

High net worth individuals usually seek for tax optimization strategies through asset diversification. They do this by investing and keeping their money in international bank accounts in various jurisdictions.

This method can be useful as long as you pick the right jurisdictions to do so. And guess what? Panama is among the best.

Mundo has senior-level relationships with some of the best banks in Panama. We are authorized to introduce clients, and, in some cases, even pre-approve clients (we’ll explain our pre-approval system later). We work with Fitch Ratings’ AA banks with fantastic asset quality and good long-term prospects. That means we only open bank accounts where we know your money will be safe.

Why Panama? Because Panama is one of the most stable democracies in Latin America and has a pro-business government that promotes a liberal economic policy to stimulate FDI.

The results are clear: a modern country whose economy is the strongest in the region, and has taken thousands of people out of poverty and unemployment.

Even more, Panama is a gorgeous country that has a growing expat community composed mainly by businesspeople, investors, entrepreneurs, and retirees. The country has become a magnet for expats because of its solid immigration policy, friendly tax regime, relaxed lifestyle, and a mild climate that is almost a year-long summer.

The country’s GDP has grown an average of 5.6 % in the last five years, which means it’s the second-fastest growing economy in Latin America and the Caribbean region, only behind St. Kitts and Nevis.

The financial services sector covers around 10 % of the GDP, and most of it is provided by the banking sector that continues to be one of the backbones of the Panamanian economy. The industry is mostly known as the second-best in the world, only behind Switzerland, and meets the strictest international standards through stringent auditing regulations and state-of-the-art security systems.

If you establish your tax residency in Panama, you’d only be required to pay your taxes earned in Panama, because Panama doesn’t tax foreign obtained income.

Thus, Panama is one of the best financial centers in the world for its stability, professionalism, trust, and tax optimization possibilities.

However, that also means opening a bank account in Panama can be a bothersome process, especially if you’re not physically present to do it.

It requires more documents than in most countries, and all the documents you deliver go through stringent checks, meaning the process can take a few weeks. 

However, the government knows the banking system is one of the pillars of the economy, which means the state promotes its growth. Thus, they’re interested in allowing foreigners to open an account in Panama without being physically present in the country.

Non-residents can open both personal and corporate accounts for foreign or local companies in Panama. Generally, most of the process can be done remotely, but you’d have to go to Panama for an interview and to sign the opening document. Nevertheless, under certain conditions, and with the helping hand of an authorized agent such as Mundo Offshore, we can help you open your account remotely.

In fact, the process isn’t so simple. Thus, the best way to go is to hire an experienced expert such as Mundo Offshore that can help you through the whole process.

Why Panama? 5 Reasons why you should open a bank account in Panama with Mundo Offshore.

Political and economic stability

Panama is one of the most stable democracies in Latin America. Large strikes and demonstrations are rarely heard of, and all governments in the 21st Century have been pro-business. 

Likewise, the Panamanian economy is growing enormously and steadily. Inflation is low, the country enjoys excellent fiscal health, and unemployment and poverty are decreasing. The local currency is the American dollar, which eases the stability of the monetary policy, which also helps you to have a guarantee that your money won’t lose any value.

Reliable banking with excellent professionals

The Panamanian banking system is not only the best in Latin America, but it plays in the big leagues. It is at the level of Switzerland, Singapore, and the US. They have a solid regulatory authority that ensures high levels of compliance and security with top-level private banks that are used to deal with foreigners and have personnel with experience in Swiss banks and similar to offer assistance to their international clients.

Likewise, the online banking system is also amazing. That is good if you don’t intend to do business in Panama but want your money in a trustworthy jurisdiction. You can administer your account from your home country without any problems.

Simple process

The general process to open a bank account in Panama can be somewhat bothersome; however, when we are talking about the remote process, Panama is among the top of the top.

First of all, many countries don’t allow opening a bank account remotely, even if the physical process is simple. That’s not the case with Panama. 

The government understands that they must support banking to continue its economic growth. Thus, you can open a bank account with the help of an authorized agent, such as Mundo Offshore, in a couple of weeks, with low maintenance and opening fees.

Ease to do business, ease to create a company, ease to get a residence

Opening a bank account in Panama is very convenient because Panama has a free economy with free trade zones, such as the Colon freezone, where companies are exempt from corporate tax. Businesses are easy to set up, and we can help you get a corporate bank account (more on that ahead).

Furthermore, a Panamanian residence visa is a must if you intend to do business on a stable basis in Panama. 

Beneficial tax system

Panama has low personal and corporate income tax rates, and companies that establish themselves in areas such as the Colón FTZ are exempt from income tax. Moreover, Panama only taxes locally-sourced income. That means any foreign-sourced income is completely tax-free in Panama, which is a fantastic tax optimization possibility.

Who are we, and what can we do for you?

Along with NTL Wealth, in Mundo, we have more than 25 years helping high net worth individuals and investors around the world do business freely and protect their investments.

Our core value is freedom. We believe people should have complete freedom to invest, to keep their money safe and to do business. We know you need to keep your money safe and make your investments with as much freedom as possible, and that’s why we offer banking services in Panama.

Foreigners in Panama can open personal, corporate, and merchant accounts. And guess what? We can help you do that without requiring your presence in Panama.

Why work with Mundo and not any other agency? Because we work with a pre-approval system. 

What does that mean? Simple! We send prospective banks all your information simultaneously before the application so they can study your profile and decide whether they will take you as their client. That increases your chances of being accepted by a bank and reduces time and costs because you won’t have to repeat the same process with different banks.

All accounts are opened in US dollars, which is the official currency in Panama. However, if you want to hold other currencies, most banks can do it. If that’s what you need, we can present you with some options. Multi-currency accounts usually allow you to hold the following currencies:

  • US dollar

  • Euro

  • British pound

  • Swiss franc

  • Japanese yen

Nevertheless, you must consider that, even if a multi-currency account in Panama eases your business and diversifies your risk, they usually don’t generate any yields or interests.

We offer four primary banking services in Panama: personal bank accounts, corporate bank accounts, merchant accounts, and brokerage accounts.

We work with banks that offer fixed term deposits for personal and corporate bank accounts. Generally, the minimum opening amount will be $10,000. Interests will always depend on the invested amount. More time, and a larger investment will mean better interest rates. The minimum interest rate we offer through our partner banks is 2.5 %. If you hold the deposit for five years and hold a significant amount of money, the interests can be between 4 % and 4.75 %.

Whether you want a personal or corporate account, we strongly advise you to see if you can apply for a Panamanian residency to set your fiscal residency in the country. That makes your opening process way swifter and simpler and will lead you to declare and pay taxes in Panama and not in your home country. That means obtaining fiscal residency in Panama can help you to simplify the process of obtaining a bank account and optimizing your taxes.

Want to know more about our residency services in Panama? Check our Country Focus and article.


Open a personal account in Panama

What do you need to open a personal account in Panama?

  • Personal information form

  • Deposit form

  • Service request form (to obtain key card, online banking access, and credit card services)

  • Affiliation request form 

  • Banking services contract

  • APC form

  • CRS certification

  • Credit products request

All forms must be signed in black ink as similar as possible as your passport.

As additional requirements, you may need:

  • Notarized and apostilled copy of your passport

  • Simple second ID

  • American Visa (if applicable)

  • Income proof:

    • If you’re an independent worker, the last two income statements in your country of residence

    • If you’re an employee a work letter that shows your income

  • Service receipt from your residence country as a proof of address

Open a corporate bank account in Panama

To open a corporate bank account, we work with a law firm registered in Panama that will be your legal representative throughout the whole process.

What forms should the interested company fill out? (we’ll send them if you’re interested)

  • Banking services contracts

  • General resolution

  • Sworn statement

  • Corporate and personal APC form

  • Deposit request

  • Service request

  • Corporate client information form

  • Corporate members general information form

  • Online banking request

  • CRS

Also, you’ll need to submit:

  • Apostilled passport copies of all foreign signatories and beneficiaries

  • Second ID copy of all signatories and beneficiaries

  • Commercial reference card

  • Banking reference card

  • Income proof of all signatories and shareholders

  • Two-year financial statements of the company

  • Certification of Registry of Panamanian Companies

  • Corporate summary of the company

Merchant account/E-commerce package in Panama

We also have an E-Commerce package for companies that wish to operate as online stores and/or mobile apps. The package includes the registration of a company in Panama, virtual office, corporate bank account, and merchant account to process payments from your app or e-store.

What do you need for this package?

We require a set of initial requirements:

  • Apostilled passport copies of all foreign signatories and beneficiaries

  • Second ID copy of all signatories and beneficiaries

  • Commercial reference letter

  • Banking reference letter

  • Income proof of all signatories and shareholders

  • Certificate of the Registry of Panamanian Companies

  • Link of the webpage or mobile app

We’ll likely need more documents to conduct the process. Nevertheless, you must get in touch with our experts so we can provide you with all the necessary info.

Open a brokerage account in Panama

We can also help you open a brokerage account. If you’re a financial investor looking for a safe account from which to handle your operations, this is the ideal option for you.

However, we can also help you set an administered account where our banking partners will help you structure a tailor-made investment portfolio for you.

Thus, if you’re a personal investor, these accounts include services such as:

  • Brokerage and exchange services in Panamanian and international markets

  • Brokerage and margin accounts

  • Securities swaps

  • Capital market services

And, if you’re a corporate investor:

  • Cash management services

  • Escrow securities and money accounts

  • Brokerage and exchange services

  • Capital market services

  • Hedging transactions

Take into account that these accounts are not opened in regular banks but in broker-dealer houses (albeit some banks have their own house). This doesn’t mean the process is easier. It’s as stringent as for opening a regular bank account.

We can help you open one of these accounts remotely. The process is simple but requirements and checks are stringent. It varies from house to house but in general it is like this:

  • Fill out all forms

  • Gather the documents:

    • Account request form

    • Passport and ID copy

    • Two banking or commercial services

    • Proof of residence

    • Income proof

    • Signed brokerage contract

  • Send the documents and wait for the provider’s response

For an extensive list of documents and the process, please contact us and we’ll explain the process in detail.

Panama is a top banking destination. It’s a crossroads of oceans, cultures, and economies. Indeed, it is a small country, but it has unmatched economic potential and financial security.

What are you waiting for? A bank account in Panama will give you and your business fantastic tax optimization possibilities in one of the most secure, advanced, and reliable banking systems in the entire world.

Contact us now and get a Panamanian bank account!


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