Bank Account in Panama
Bank Account in Panama
- Panama Banks
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- Last Update: January 20, 2024
Maybe on the Internet, you find some web pages that point out that opening a bank account in Panama is a nightmare or that it is very difficult, which is far from reality, although it is not a piece of cake either.
There is also the myth that bank accounts in Panama for foreigners are only available to the wealthiest, which is not the case.
Virtually any foreigner with modest income can open a bank account in Panama.
There are several other myths that we discuss in our article Myths of the Panamanian Bank Accounts that can check it out if you like.
Panama for Open a Bank account
The Republic of Panama is one of the most important business centers in the region.
Panama has an important international financial service center which is preferred by investors from all over the world.
Panama also offers important tax advantages to both people and companies, which makes it even more attractive, that is why many foreigners seek to invest or live in Panama.
You will find worldwide entrepreneurs and business people of all sizes seeking to set up their companies in Panama.
Panama enjoys great economic and political stability, for this reason, more and more people or companies are attracted to Panama.
Advantages of having a bank account in Panama
The advantages of opening a bank account in Panama are immediate, since from the first moment you can start using the account to receive and execute payments, transfers money even in currencies other than the dollar.
The tax advantages are also important, any income generated outside the Panamanian territory is tax-free.
If you want to avoid tax issues we recommend you to buy one of our eBooks, Essential Panamanian Tax Guides. With this simple but useful eBooks you will learn and discover every detail about Panamanian taxation.
We can list some of the advantages of opening a bank account in Panama as follows:
- You can open your account in dollars
- In some banks, you can open your account in euros and even in other foreign currencies. (Ex. Swiss Francs, Pounds, etc.)
- Access to a politically and economically stable country, this will be an advantage for residents in areas where there is a risk of political turmoil, who fear that their assets may freeze, seize or disappear.
- Banks can operate at a lower cost base and can provide higher interest rates than banks in the country of origin.
- From the first moment, you can start using the account to receive and execute payments, money orders or international transfers even in currencies other than the dollar.
- Profits or rents produced outside Panamanian territory are 100% tax exempt regardless of whether the capitals are in the name of a Panamanian legal entity or in a local bank.
- Money from interest on bank accounts is tax exempt.
Requirements and Regulations
As in any other country, Panamanian banks have a document request process to validate that the customer is reliable, as well as their assets.
In this way, the banks in Panama not only assure us of a high-level banking service but also comply with national and international statutes, maintaining the trust standard of the Panamanian banking service.
Maybe you can think from the latest news that Panama is an unregulated banking center, when in reality it is the opposite.
The Panamanian banking service is a regulated and modern industry that has been strengthening over the years.
On some occasions, even the procedures requested may present more exhaustive processes than in countries considered by the OECD as “transparent” financially speaking.
You must prepare to submit personal identification documentation, income statement, intended use of the bank account in Panama, fill out various forms including FACTA, among other documents.
We have written a simple and more detailed article about the Requirements for opening a bank account in Panama.
Choosing a Bank for your Bank Account in Panama
There are a variety of banks to evaluate, the Panamanian banking offer is wide, the international banking center has more than 90 banks that you can check at our List of Banks in Panama.
Which bank to choose to open a bank account in Panama will depend on your personal or business choices in each case.
You should also consider that banks in Panama are specialized in different business niches.
Some banks are interested in having rich clients and are focused on private and investment banking.
Others focus their attention on the local market and consumer banking.
And so on we will have different banks focused on different market needs, so you should align your specific needs in each case with the banks and theirs product offer.
Main Types of Bank Accounts in Panama
There are 2 types of bank account in Panama that are the most common, savings account and checking account.
However, the Panamanian banking market offers a wide range of bank accounts, including fixed account, payroll accounts, investment accounts, etc.
Saving Accounts in the Panamanian banking sector are accounts that generate interest (usually low) in favor of the owner of the account and generally do not generate maintenance costs.
Checking Accounts are accounts in which you can write checks of free circulation in Panama, these accounts generally require a minimum opening and monthly average amount of funds which is usually greater than those requested for savings accounts.
This type of account does not generate interest and its maintenance costs are given by the number of checks that are emitted per monthly cycle.
The Fixed Account is the account that generates the highest interest in favor of the account holder, but it requires to fix the funds in the bank (money cannot be withdrawn) for a predetermined period agreed at the opening of the account. Rarely does this type of account have a maintenance cost related with it.
The payroll account is a special account used for the payment of employees which is automatically linked to a payroll system of your choice. This type of account generates a monthly maintenance cost that depends on the size of the payroll, the volume of transactions among other factors determined by each bank.
This type of bank account in Panama receives different names and there are of different types, such as equity banking, investment banking, funds, mutual funds and others.
Basically, they are accounts whose funds are invested in different instruments in the stock market both Panamanian and abroad.
The yield generated by then is credited to your bank account in Panama.
This investment account generally receives higher returns than a savings account and a fixed account, but being an investment in the stock market it is volatile with variable dividends.
I the following link you will find an easy to follow post that we prepare about Types of Banks Accounts in Panama if you want to learn in more detail the types of bank accounts in Panama reading it is a must … don’t miss it.
Each bank may offer more than one product for each of these types of services, for example, it is very common to find different Saving Accounts in the same bank.
The bank will naturally have a different name to each of these products, for example, Regular Saving Account, Platinum Saving Account, Diamond Saving Account, etc.
The difference between these will be the benefits we receive as clients, the opening amount, the average monthly amount of funds, etc.
Online banking
When opening a bank account in Panama, it is very likely that they offer you the online banking service.
Nowadays practically all the bank will offer their clients the online banking service.
This service is usually of very good quality, it allows you from anywhere in the world to make payments, transfer money between accounts of the same bank, make international transfers, transfer funds to third-party bank accounts, verify bank account statements, etc.
According to the banking regulation, any payment made through online banking must be backed by a double authentication system through tokens.
Online Banking Costs
The costs associated with the online banking service are usually quite low, although obviously, they vary from bank to bank.
For example, Banco General charges a subscription of $10 per year, for the online banking service.
This charge is usually automatic to your bank account in Panama.
Mobile banking
By getting your bank account in Panama you can also have access to the use of Mobile Banking.
Mobile banking is a native Android or iOS app that give you the same functionality and all the power as the online banking.
Cost of Mobile Banking
In general, the app is free to download and use, as well as all its features, however, you must have enabled the online Banking service mentioned above.
Bank Account in Panama for Foreigners
Foreigners are free to open bank accounts in Panama.
But, you will be asked for certain requirements to open the bank account, these requirements may also differ from resident and non-resident foreigners.
In our section Requirements for opening a bank account in Panama we explain the requirements generally the Panamanian banks demand.
There are different ways of how to open a bank account in Panama, we have written an article entitled 3 Methods to open a bank account in Panama where we will explain the possible ways of how to open a bank account in Panama.
2 thoughts on “Bank Account in Panama”
Which banks offer the highest savings and time deposit interest rates?
HK
Interest rates fluctuate constantly because the banking sector in Panama is highly competitive.
Fixed-term accounts pay the highest interest rates, with minimum terms of one month and maximum terms of five years, and a minimum opening balance of $10,000.
Rates on Fixed Term accounts can range from 2% to 5.5% per month or perhaps a little higher, but this is variable and must be agreed upon individually with your preferred bank.
Here you can read more information about account types in Panama.