Banking in Panama as a non-resident is becoming increasingly challenging. Laws and regulations are constantly changing. The changes make it difficult to keep up with the latest banking requirements.
This is largely due to Panama being regarded as a tax haven by many countries. Despite these challenges, banking in Panama is still possible for foreigners. Here is the process of opening an offshore bank account.
Why Should You Open an Offshore Bank Account?
Many people assume that only the very wealthy can and should open offshore bank accounts. However, anyone with a significant amount of capital can open such an account. The main reason to open offshore accounts is to protect assets, which is not dissimilar to why people open bank accounts in their own country.
A lot of the people who open offshore accounts do so because the U.S. cannot issue garnishments to foreign bank accounts. So, if you have a lot of assets that you want to protect, a legal way to do so is to open an offshore account. Remember that offshore accounts are not a way to evade taxes and doing so is highly illegal.
Requirements for Opening an Offshore Bank Account in Panama
Like any other country, Panama has a set of requirements that you must meet before opening a bank account. Ensure your customer (KYC) laws are intact for simple identity verification by the bank. The following documents are required for banking in Panama:
- A copy of your passport
- Proof of address, such as a utility bill
- Proof of funds
- Company certificate
- A copy of your residency card or work permit (if applicable)
- Bank and professional references from your home country
- A copy of the business plan
The Process of Opening an Offshore Bank Account in Panama
Opening an offshore bank account in Panama is a relatively simple process. The first step is to choose a bank. It is important to research each bank and compare their services to find the best fit for your needs.
Once you have chosen a bank, complete an application form and provide the required documents. The bank will review your application and, if approved, open your account.
The minimum deposit required to open an offshore bank account in Panama varies from bank to bank. It is important to check with your chosen bank for their specific requirements. In most cases, the minimum deposit is between $500 and $1000.
Must an Individual be Present in Panama to Open an Offshore Account?
In most cases, yes. Banking regulations in Panama require that individuals open an account in person. This can be done by visiting the bank branch in Panama or by appointing a representative to open the account on your behalf.
If you cannot visit Panama in person, talking to a legal firm can be helpful. They can recommend some banks that offer remote banking services. These banks allow you to open an account without being physically present in Panama.
What If My Company Is New and Does Not Have References Yet?
Banks understand that new businesses may not have references. The bank will require a personal reference from the company’s signatory instead.
A personal reference is a letter from an individual who knows you and can attest to your character. This could be a business associate or professional in the field. The reference should state how long they have known you and what capacity.
The Pros and Cons of Opening an Offshore Account in Panama
After 9/11, it became much more difficult for U.S. citizens to open banks in countries they aren’t residents of. However, in Panama, there are still some banking institutions that accept U.S. citizens. You also get to take advantage of higher interest rates in Panama, compared to many banks in the United States. Another option you have even as a non-resident is to get a credit card.
If you own international businesses, you may need to spend money in various countries. Having a bank account in Panama is useful if you need to spend money in Latin American countries.
One downside is that the requirements for opening an account are changing relatively frequently. Make sure you keep up to date with them so you can stay within regulations. A law service is helpful with that need. You are more likely to be audited if you declare you have a bank account in Panama. Unfortunately, some places may refuse to take any money from your account.
Consider talking to a lawyer about the pros and cons of opening an offshore account and to see if your needs will be met by an account in Panama.
Do I Need the Services of a Lawyer for Banking in Panama?
It is not required to have a lawyer when opening an offshore bank account in Panama. However, it’s advisable to seek legal counsel.
A lawyer can help you choose the right bank and ensure that all the necessary documents are in order. Having a legal team that consists of experienced banking lawyers can help guide your banking needs in Panama.
Having expert lawyers at a firm helping means you have people who are familiar with their local banking system. With significant years of expertise, they can smoothly help you navigate banking challenges in Panama.