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How to choose the best banking paradise: Puerto Rico vs Panama

8/11/2023 8:00:00 AM
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The challenge of finding the best banking paradise cannot be avoided. If you want to protect your money with a bank you probably have done your research and are wondering what the top offshore banking destinations are. However, the decision is not always that simple. 

There's no one-size-fits-all solution, so comparison becomes imperative and, most of all, necessary. If you’re interested in banking, compare the most reputable jurisdictions and see what features attract you the most. 

Recently, our experts have presented quite good arguments regarding why choose Puerto Rico for banking. This is why the editorial team decided to pen this piece comparing the charming island with one of the people's all-time favorites: Panama. Let's analyze the advantages of Puerto Rico offshore banking and why it’s better than other alternatives.

Comparing top offshore banking destinations: Puerto Rico versus Panama

Similarities: Territory and location

While Puerto Rico is an island and a US territory, Panama is an isthmus. Located near the tropics, both have access to the Caribbean Sea and boast warm weather and excellent facilities. Any of the two can be considered more than a banking paradise receiving lots of happy tourists each year. In terms of location, they both have a convenient time zone and access to Europe and the Americas. 

Similarities: relations with the US 

If you're interested in banking, compare two jurisdictions that have something in common. With this pair, you’ll find peculiar similarities, for example, their relation to the United States. In this regard, they're both solid options if you want to protect your money with a bank since they have dollarized economy and practically no inflation.

While Puerto Rico is a US territory, Panama is an independent nation closely related to the said country. The Panama Canal was administered by the US for several years until December 31, 1999. Since that day, both the US and Panama have kept friendly relationships that facilitate trade and importation, thus reducing the cost of key products like clothing, gadgets, and cars.

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Your banking paradise can be any of these two jurisdictions. Since the best way to protect your money is through diversification, the sole decision of going offshore will be beneficial. Nonetheless, the question of “where” continues to be important. If you want to protect your money with a bank, then reporting might be one of your main concerns. 

Absence of CRS

Being part of the US, the advantages of Puerto Rico offshore banking are many. For example, the country is not subscribed to the CRS. What does this mean exactly? In simple words, it means that banks in Puerto Rico are not obliged to report the account information to the client’s tax residency country. This is actually why many choose Puerto Rico as a business destination obtaining the best of two worlds in a tropical banking paradise with an outstanding reputation.

On the other hand, if you protect your money with a bank in Panama, the institution will report to your tax authority. This is not necessarily a problem, but it is something to consider. Naturally, all the money that comes into your account from dividends, payments, or other types of transactions will be reported to the tax residency country.

Advantages of Puerto Rico offshore banking over Panama

To protect your money with a bank you need a reliable jurisdiction, a solid institution, the lowest fees possible, and the best tax conditions. In this regard, the advantages of Puerto Rico offshore banking become clear. Nonetheless, this doesn't exempt the individual from paying taxes in other places where they may have accounts, businesses, or residency.

Everyone dreams of a banking paradise, and many see Puerto Rico as a business destination with lots to offer. They are not wrong because here they have the perfect combination of reliability, security, stability, and asset protection.

Disclaimer: this article only intends to share general information about banking in Panama and Puerto Rico, but it should not be taken as legal advice. Before making financial decisions, consult with certified professionals.

Choose Mundo and discover the best way to protect your money

At Mundo, we have experts in different areas that can help you protect your assets in the best way according to your case. If you're interested in banking, compare Puerto Rico with other jurisdictions, like Panama, and you'll see that it’s one of the only places left without CRS. However, every structure must be geared according to the individual's needs creating a solution that actually works. Get in touch with the best experts to discover your possibilities in the world of finances, real estate, banking, and investments. 

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