Panama

Panama is one of the most well-known offshore financial centers and one of the largest in the Americas. Its rise as a financial hub began with the construction of the Panama Canal in the early 20th century, transforming the country into a key global trade route. The canal boosted Panama's economy and attracted international businesses, positioning the country as a gateway between the Atlantic and Pacific Oceans. 

As global trade expanded through the canal, demand for financial services grew, leading to the development of a robust banking sector. Both domestic and international banks set up operations in Panama to support trade financing, currency exchange, and other financial activities.

For decades, the jurisdiction has been a prime destination for global corporations, high-net-worth individuals, and investors, owing to its strategic location, its dollarized economy, and favorable conditions for international banking and offshore financial services.

One of Panama’s key attractions is its lack of taxes on foreign-sourced income, which has drawn hundreds of thousands of non-residents to incorporate companies there. These companies are commonly used for international business, investment, and asset holding, further establishing Panama as a global financial hub. The ease of setting up businesses and the country’s well-established banking infrastructure have played a significant role in its success as an offshore finance center.

However, the 2016 Panama Papers which consisted of a series of leaks of offshore dealings in Panama by a number of autocrats and prominent public figures, including, for instance, politicians and athletes substantially affected the reputation of the jurisdiction. 

Despite the controversies, Panama’s financial sector reputation has been recovering and it remains significant, continuing to play a major role in global finance. Its regulatory framework has been largely updated in line with international standards and its financial and non-financial offshore business sector’s supervisory oversight has been increased.

A key feature of Panama’s financial system is its dollarized economy, using the U.S. dollar as its official currency since 1904. While Panama lacks a central bank and control over monetary policies such as setting interest rates or managing inflation, using the U.S. dollar brings stability and eliminates currency risk, making Panama attractive to international businesses and investors.

Panama has a very large banking sector with a relevant presence of international banks, with many large multinational banking groups such as Citibank, or HSBC, among many operating in the country. 

The Superintendency of Banks of Panama (Superintendencia de Bancos de Panamá, SBP) is the primary regulator overseeing the banking sector. The SBP supervises the licensing, regulation, and operation of both onshore and offshore banks. In addition to banks, the SBP also regulates trust companies, money remittance services, and financial leasing.

There are two types of banking licenses in Panama: onshore (general license) and offshore (international license).

Onshore banks in Panama serve both local and international clients. Notable onshore local banks include Banistmo, BAC, and Banco General. These banks offer universal banking services to pretty much any client profile, although nonresidents, especially small companies, will generally be required to substantiate a commercial or operational nexus in Panama.

Subsidiaries and branches of large multinational banking groups such as the aforementioned HSBC and Citibank, but also Asian-based ICBC, Keb Hana Bank, and Bank of China tend to focus on banking for larger corporates, as well as international trading between the Americas and the foreign countries where these banks have a presence.

There is also a relevant presence of South American banks from, for instance, Colombia, Peru, and Argentina whose clientele tend to be traders between Panama and these jurisdictions.

Then, there are a number of mid-size onshore banks such as Credicorp, MMG Bank, and Multibank that have been growing substantially in recent years due to their understanding of new sectors such as e-commerce and online businesses overall or the blockchain industry in the case of Towerbank. These banks also serve nonresidents without any form of commercial or operational connection to Panama.

Offshore banks, on the other hand, cater exclusively to foreign clients. Nowadays, most offshore-licensed banks in Panama consist of Latin American banks providing foreign currency services to Latin American clients.

Then, there is the government-owned bank Banco Nacional de Panamá which mostly serves local clientele and businesses.

The process for non-residents to open corporate bank accounts in Panama is relatively straightforward, with no substantial requirements beyond the standard Know Your Customer (KYC) procedures to understand the business activities, sources of wealth, sources of funds, and counterparties. Both locally incorporated companies and foreign companies can onboard with Panamanian banks with minimum relationships starting at USD 10,000.

Panamanian banks also open personal bank accounts for non-residents, offering multi-currency checking, savings and investment accounts with a similarly straightforward account-opening process.

Our services in Panama focus on opening corporate bank accounts for non-resident companies registered in Panama or any other offshore jurisdiction. We also assist non-resident individuals in opening personal bank accounts in Panama for day-to-day banking or savings purposes.