banking in panama

Banking in Panama: A Solution for the Post-Pandemic Era

As a result of the ongoing global pandemic an economic crisis is being witnessed across the globe and even the most stable of banking institutions have not been immune to the effect. The challenges faced by banks will continue long after the worst has passed but the sector has seen significant erosion of assets and many smaller banks have already been swallowed up by the larger banking giants.

The pandemic has served only to compound the burdens presented to the sector in the form of governmental pressure from the European Union and the United States of America for banks in so called “tax havens” to install and enforce enhanced due diligence to reveal information and identities of their clients. One could reasonably argue that these amplified compliance measures are more motivated by fiscal imperatives rather than the criminal activities so often mentioned.

It could also be anticipated that with governments across the world having supported their economies through the various lockdowns, there will be a more aggressive approach to taxation as the bill for the pandemic falls due. All this being so, many are seeking alternative banking options outside of their own jurisdictions to provide the asset protection they need.

Panama as an option

Panama City centre has been likened to a miniature Manhattan, with its towering skyscrapers glittering in the tropical sun. it has the most modern and successful international banking centre in Latin America and is a crucial hub for South American business in particular.  The absence of currency exchange controls allows transactions to flow freely which has attracted many investors to bring their banking activities to Panama. Since 2000 Panama has recorded one of the fastest growing economies in the world, which was double the regional average in the noughties and averaged at 5.5% since 2010. Like all other countries, its economy regressed in 2020 but it is strongly tipped to bounce back in 2021, and beyond, owing to public infrastructure investments, mining output and, of course, the canal.

Banking sector in Panama

With its thriving economic and business climate being one of the strongest in the region, advantageous banking laws, and a democratic and capitalist government, Panama has one of the most stable and solid global banking systems. It is recognised as being the most modern and successful international banking centre in Latin America and offers investors a large number of banks from over 32 countries around the world, including Asia, Europe and the Americas. Some of these banks, owing to the favorable banking environment, have established themselves here with an international license to run their operations to and from Panama.

Enabling business in Panama

It is no surprise, therefore, that many large regional and international corporations have set up operations in the country as a result of Panama´s environment of doing international business with ease. Proctor & Gamble, Heineken, BMW, Dell, Maersk, Nestle to name but just a few.

This has also attracted a great number of foreign internationals to come to Panama and open bank accounts under Panamanian Corporations and Private Interest Foundations, with the majority of corporations not having business operations In Panama. Commonly, these accounts are solely used for asset protection and estate planning in Panama.

Increase in regulation of banks in Panama

Owing to increased global pressure by governments and authoritive bodies such as the OECD, banks worldwide have had to amplify their due diligence processes to counteract the use of bank accounts being utilised for purposes of money laundering from illicit activities and financing of terrorism. The Superintendency of Banks In Panama has indeed applied even stricter measures than can be found in many other jurisdictions so that they may avoid unfavorable treatment by international bodies and protect its banking sector´s reputation, a problem that has affected some banks in other countries in recent times. This traditional, conservative approach may offer some insight into the stability and security taken by the Panamanian banking authorities and banks and how safeguarded investors assets are.

Corporate bank account for your Panama corporation or foundation

Once you have opted to select Panama as the jurisdiction for your offshore business, set up your Panamanian corporation or foundation you may wish to open a corporate bank account for your new business venture. Our guide on How to Open a Bank Account in Panama featured within our Insights section can help inform you on the process but below is a description of the services Trust Services can provide to you.

How Trust Services can be of assistance

Commonly, we find that having a local bank account can be a fundamental part of having an offshore company, whether it is for succession or business reasons. For clients interested in opening a bank account in Panama we offer a bespoke range of services with the advantage of speaking your language, whether it be in English or Spanish or just access to good, old-fashioned common sense. Our services include the following;

  • Panama bank referrals
  • Private banking services referrals
  • Investments and brokerage accounts referrals
  • Assistance with the process of opening a bank account with a local bank
  • Assistance with obtaining any local corporate documents required for banking due diligence purposes
  • Nominee director services
  • Signature and completion of bank forms by nominee directors
  • Asset protection

Our firm can help you avoid any pitfalls when seeking to establish business relations in Panama, whether this be accounting, succession planning or banking in Panama. Considering our experience in attending to our clients banking needs, for over 40 years, you can be rest assured we offer safety and peace of mind when handling your overseas accounts.

Let our experience be your guide and contact us through the link in our contact page.