Banking In Panama For Expats: Bank Accounts And Options

In this article, we will outline what is required to open an account and some tips on sending money internationally and withdrawing cash from your accounts. We’ll also dispel some myths about banking in Panama, like the idea that you can’t open an account as a foreigner or that all accounts are anonymous.

Banking in Panama is an ever-changing business, with many significant changes happening in the last five to ten years. In the past, Panama was a country of anonymous shell corporations and anonymous bank accounts. A tax haven, a place to hide your money from your home government, but that no longer exists here.

The banking system in Panama is very modern and efficient, and there are several banks to choose from.

The banking system in Panama

The Superintendency of Banks of Panama is the country’s banking regulator. It was established in 1998, and its responsibilities include licensing banks, monitoring bank operations, and investigating complaints against banks. The Superintendency also works to promote financial stability and prevent money laundering.

To carry out its mission, the Superintendency has several powers, including the power to inspect banks and impose sanctions on banks that violate laws or regulations. The Superintendency is headed by a Superintendent who the President of Panama appoints.

Most banks in Panama offer a wide range of services, including savings and checking accounts, loans, credit cards, investments, and more. When you open an account with a bank, you’ll be asked to provide your personal information, as well as your passport or other identification. You’ll also need to deposit money into your account before you can start using it.

Banking in Panama is safe and secure, and there are several ways to access your money. You can use ATMs, widely available throughout the country, or you can go into a bank branch to make withdrawals or deposits. You can also use online banking services to transfer money or pay bills.

Privacy, secrecy and confidentiality

Banking secrecy is an integral part of the banking system in Panama. It helps to protect the privacy of bank customers and their financial information.

Banking secrecy also allows banks to operate more efficiently by keeping confidential information out of the hands of competitors. These banking secrecy laws require banks to keep customer information confidential and impose strict penalties for disclosure.

The currency in Panama

The currency in Panama is the Balboa. The Balboa has been the currency of Panama since 1903 when Panama separated from Colombia. It is named after Spanish explorer Vasco Núñez de Balboa.

The Balboa is pegged to the United States dollar and is equal to one US dollar. The Panama minted coins of the Balboa are 1, 5, 10, 25, and 50 centésimos, and 1 Balboa coin. US and Panama coins are in circulation together. Panama purchases old US treasury bills for its paper currency, as it does not print its own paper money.

Are banks in Panama safe?

The simple answer is yes, banks in Panama are very safe. In fact, Panama has a long history of being a safe place to store money.

The country now has a stable political and economic environment, and the government regulates its banking system well. Additionally, all banks in Panama must adhere to strict international standards, and many of those are even more stringent than international standards.

Overall, banks in Panama provide a high level of security for their customers. As a result, depositors can rest assured that their money is in good hands. While there have been a few isolated incidents of bank fraud, the authorities quickly deal with these.

One thing to consider is that your deposits are not insured by agencies like FDIC or European Deposit Insurance Scheme. Panama has not seen the banking failures of the US or EU, so an insurance system was never set up for deposits. The Superintendency of Banks has always stepped in and managed banking problems to protect the deposits.

Best banks in Panama to keep your money

In Panama, you have a choice between private and state-owned banks.

Panama government-owned banks

There are only two government-owned Panama banks: Banco National and Caja de Ahorros, Panama’s oldest credit union. Both are good solid banks but usually require a foreigner to have their permanent residency and cedula before opening an account there.

Privately controlled banks

Panama has over 50 privately controlled and owned banks throughout the country. I will not list them all, just the popular ones you see throughout the country that expats tend to use.

Each of these banks has its head offices in Panama City, with branch offices throughout the country. Besides the two government banks, these are the typical banks where citizens and expats will do their banking.

• Banco General
• Multibank
• Global Bank
• Banesco
• BAC
• Global Bank

Foreign banks in Panama

Many foreign banks worldwide, especially in Latin America, have their Latin American head offices in Panama City. Currently, in downtown Panama City there are over 90 banks with offices; much of Panama City’s skyline are bank buildings.

Many of these do not operate branches in Panama. They have located their international head offices here, as Panama has strong bank privacy laws and regulations.

General bank account requirements in Panama

If you are a citizen, opening a bank account in Panama is quite simple: you visit the branch, provide the proper id, proof of income, or job, and make a deposit.

Can foreigners open a bank account in Panama?

It gets a bit more complicated for foreigners to open a bank account. You must do this in person at the bank. As the requirements can change from bank to bank and year to year, I visited two local banks here in Panama and received their requirements for foreigners.

As of 2021, banks in Panama require you to be a resident or in the process of residency with a home (or lease agreement) to open an account in Panama.

Multibank

• Passport
• Second photo ID
• One bank reference letter from your local bank back home
• One commercial reference from Panama. This can be from the lawyer doing your immigration.
• Proof of income. This can be the pension documents you use from your visa or the last two years of your tax returns.
• A rental lease agreement or home purchase contract
• An initial deposit of $1500 (cash only)

Banco General

• One bank reference letter.
• One reference from a lawyer certifying you have hired the service to apply for a visa in Panama
• One-year residential lease
• Proof of income: pension letter, tax returns, etc
• Valid Passport
• Valid Second ID

Remember, these requirements change by the bank, the branch, and sometimes yearly. Once you have all the documentation, you sit down with the bank, they will go through it and send it to their head office. The account should be ready in a few days or a couple of weeks, depending on where you live.

You do not need a lawyer to open a bank account, but you will see many offering this assistance. They can expedite things a bit if you need an account fast and help with the language barrier if the bank employee does not speak English.

Many banks have English-speaking employees, and if that is important to you, you need to check with the bank before you decide to open an account here.

Banking in Panama for US citizens

Can a US citizen open a bank account in Panama?

Yes, a US citizen can open a bank account in Panama. It is certainly more accessible now than it used to be. Back in 2003, when the US implemented its FACTA laws on its citizens, most Panama banks stopped opening accounts for US citizens because they felt FACTA broke Panama’s banking privacy laws.

Over the years, Panama and the US worked things out, and most banks will open accounts with US citizens. There is one difference to the requirements above, US citizens will have to fill in a W-9, and the bank will report bank account activity to the US government.

If I retire to Panama, how can I get money from US accounts, pensions, and Social Security to my account in Panama?

Sending money to your Panama bank account is relatively easy, as Panama is part of the international SWIFT wire transfer system. So from your foreign bank, you send a wire directly to your Panama bank using its SWIFT Code. International wire transfers are not cheap; they can cost between $25 – $50 at each end.

You can always get cash from your foreign banks through the ATM system, $250 at a time maximum, up to your daily limit. You will incur fees here also.

Suppose you have Social Security from the US government. In that case, once you have your permanent residency, you can request from the US Embassy to have your Social Security check deposited directly into your Panama bank.

What US banks have branches in Panama?

No US banks offer consumer banking, i.e., personal checking and savings accounts in Panama. JPMorgan Chase Bank and Citibank have offices in Panama City, but not at the retail consumer level. They offer some commercial and investment services in Panama.

Do Panamanian banks report to the IRS?

Yes, Panama banks report to the IRS for US citizens opening accounts here, as the W-9 form is part of the application.

Can I open a non-resident bank account in Panama?

In early 2021, Panama stopped opening accounts for non-residents.

Can I open a bank account in Panama remotely?

You must be in person in Panama to open a bank account.

Can I open an anonymous bank account in Panama?

You can no longer open an anonymous bank account in Panama.

The Panama papers scandal and banking in Panama

The Panama papers scandal erupted in 2016 when a massive cache of documents was leaked from a Panamanian law firm. The documents revealed how the wealthy and powerful used shell companies created in Panama and offshore bank accounts to hide their money.

The scandal brought Panama’s secretive banking system into the international spotlight. Still, the scandal in Panama was more about law offices than banking. Corporations were created in Panama by law firms, but their bank accounts were held elsewhere, like in the Caribbean and EU.

The Panama papers did affect Panama banking, as many people perceived that the accounts held by these alleged tax evaders were in Panama, while actually, they were not.

Nonetheless, since 2016, Panama has made significant changes to its banking, like not opening anonymous bank accounts for people or corporations and not opening accounts for non-residents.

Banking in Panama – summary

Banking in Panama can be a little more complicated than banking in your home country. Still, it can be reasonably easy with some research and following the requirements of the specific bank you want to use.

Banks in Panama are safe, and while there have been some scandals in the past, the banking system has cleaned up its act and is now more closely regulated.

Overall, banking in Panama can be a good experience, and by following the tips in this article, you can make it seamless.

You might find useful:

• Living In Panama – how to move to Panama and settle down: the costs, pros & cons, paperwork, visas and residency, healthcare, etc. 
• The Best Places To Live In Panama As An Expat