For many people who come to Panama, the day they open a personal bank account with a local bank is kind of symbolic. It is definitely an important early step in establishing a presence in Panama, and it is key to doing any business here.
This article will give you what you need to know to open a personal bank account in Panama.
An International Banking Center
Panama has become regional center of business. We have a cash-cow Canal, a dollar-pegged currency, relatively solid infrastructure compared to the region, and a Copa Airlines hub. And all of that is conveniently located right in the middle of the hemisphere. This environment has produced a very strong financial sector. In fact, one of the first things many foreigners notice when they arrive to Panama City is that there are banks everywhere.
Depending where you’re coming from and where you’ve been, you will probably see a few bank logos that you recognize. This gives some people peace of mind, and they may initially gravitate toward banks with a presence in their home countries.
However, you will find that many of the internationally branded banks in Panama function more or less independently from their parent company. Most will offer clients a completely different online platform, and they may effectively function as a separate entity (rather than just another branch of the same bank) when it comes to moving money around. In any case, they will adhere to Panama’s domestic regulations and relatively conservative bank policy culture when it comes to opening accounts or approving loans.
An Evolving Regulatory Environment
Panama is a transit country for the movement of people, money and goods. No big surprise, this sometimes includes some illicit activity as well, such as trafficking, money laundering and tax evasion. You’ll find that there is an entire economy, legal paradigm and business culture that have developed around trying to mitigate this type of thing in Panama.
When a local bank considers whether to accept you as a client, the application process and the interview are all set up to get a quick snapshot of who you are. The bank wants to know what you do, the source of your income, what are your plans in Panama, and what size and number of transactions to expect from you.
Also, while Panama has long been renowned for its robust privacy laws and strict adherence to banking secrecy, the entire world is changing. There is a general, global trend toward more regulation, reporting, transparency and interconnected institutions. We are seeing this in Panama as well, where banks are regulated by the Superintendencia de Bancos.
But please don’t be discouraged by this! I really don’t mean to overdramatize it. The fact is that Panama is still one of the easiest places in Latin America to open a personal bank account. And one benefit of our conservative banking culture is that our financial institutions have remained strong and resilient even during turbulent periods in the global economy.
The Application Process to Open a Personal Bank Account
The main requirements to open a personal bank account in Panama are as follows:
- Passport and 2nd ID.
- Bank reference letter from your current bank, with contact information, directed to the bank where we are applying for the account.
- Bank statements for your current account from the last 6 months.
- Tax declarations from previous year.
- Panamanian reference letter.
- Bank forms that you will need to fill out and sign.
These are the general requirements that most banks will ask to see when you apply for the account. But there could be some additional docs that some banks may ask to see on a case-by-case basis.
Most people apply in-person, so you should organize these documents before you arrive to Panama (apart from the Panamanian reference letter and bank forms). You can go ahead and have your current bank prepare a couple of versions of the bank reference letter directed to the Panama banks where you are considering opening an account.
Do I need a Lawyer to Open a Personal Bank Account?
No, you can apply directly without using an attorney. However, many of my clients do ask me to help them navigate the process – especially if they are in town for a limited time and need to avoid hiccups and delays.
If you engage me to help you open a personal bank account, I’ll ask you to send over your scanned docs in advance of your trip just to ensure that everything is in order. I’ll also introduce you to banks that are best set up to meet your requirements considering things like the amount of money involved, the rates they offer on financial products, ease of opening an account and branch locations around the city. I’ll also help you with the forms and accompany you to the interview with the bank (or several banks in case the first one does not accept you).
Bottom Line?
If you are planning on relocating, investing or spending any significant time in Panama, then you will probably want to consider opening a bank account here. Fortunately, you have lots of well-established banks in Panama to choose from. And while there is an overarching trend toward more stringent regulation in Panama (and the rest of the world’s) banking sector, Panama is still easiest place in Latin America to open an account and do business.
And while you don’t have to engage an attorney to assist you in opening a bank account, this is an ancillary service that I provide a lot of my clients. I would be happy to help you as well. Feel free to email me a info@theindependentlawyer.com.