Panama corporate bank accounts in 2021

Since 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in Panama for both local and overseas companies.

Without bank signatory travel, our team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.

We recommend our multi-national Clients read this web page to avoid bank surprises later!

  • Panama banking problems and solutions

    NoPotential Panamanian banking problemsHealy Consultants Group PLC solutions
    1.

    There is no bank deposit insurance scheme in Panama. If a bank fails, depositors lose their money.

    A Panamanian corporate bank account does not look good to international banks and Governments and customers and suppliers. Consequently, third parties may feel uncomfortable receiving or sending funds to a Panamanian;

    Panamanian multi-currency corporate bank account opening is difficult. Local banks request an excessive amount of Know Your Customer due diligence documents, some of which need to be translated into Spanish;

    For your Panamanian LLC, Healy Consultants Group PLC will open a multi-currency corporate bank account in the USA or EU or Singapore;

    2.

    Bank insists that the bank signatory travel to Panama for a one-hour bank interview.

    Healy Consultants Group PLC Client travel policy will apply (click link). Our staff will organise the bank meeting in our Panama affiliates’ office and assist our Client during the bank interview(s).

    3.

    Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect Panama bank account approval to take up to two months.

    Like most international banks, it is common for Panama banks to close corporate bank accounts without giving an open, transparent reason to their customers. To close a customer bank account without giving the bank signatory an opportunity to explain ‘unusual transactions activity in the corporate bank account’ is an unfair, unreasonable action which places our multi-national Clients’ businesses under stress.

    As we advance deeper into a global depression, it will become more common for banks to experience financial difficulties. Consequently, multi-national Clients should expect i) small banks to go bankrupt and ii) small to medium-sized banks to be bought over by top tier banks. The number of banks operating in each country will get smaller, exposing our multi-national Clients to financial risk.

    If our Client requires a bank account at short notice, we recommend an immediate Panama solution plus already-approved international corporate bank account).

    We recommend our multi-national Clients open multiple multi-currency corporate bank accounts for their entity. It is unwise to open one corporate bank account and have your business be dependent on one bank.

    For each of their entities, we recommend our multi-national Clients open multiple multi-currency corporate bank accounts across multiple countries. Spread your funds across multiple corporate bank accounts in multiple top-tier banks in multiple different countries. Avoid small banks including PSPs FSPs and digital banks. Ensure each bank offers customer deposit insurance.

  • The Panama banking sector

    Healy Consultants Group PLC summary view

    • Panama’s largest commercial banks include i) Banco General ii) Banco Nacional iii) Banistmo and iv) BAC Internacional. During a global depression, there is a real risk that one or more of these banks will go bankrupt. Consequently, Healy Consultants Group PLC recommends our multi-national Clients house their multi-currency corporate bank accounts with top tier banks in major financial centres.
    • Although in 2016, the Financial Action Task Force (FATF) removed Panama from its list of high-risk countries, in February 2020 Panama was added to the European Union’s (EU) tax havens blacklist for its failure to implement economic substance requirements. Consequently, international top-tier banks are slow to welcome Panamanian LLCs as potential customers. Panama has a history of promising to improve banking standards, but not following through.
    • Panama is a signatory to the Common Reporting Standard (CRS) global information exchange system, as well as FATCA reporting protocols. Panama banks therefore share details of accounts held, controlled or beneficially-owned by foreign residents, with other banks and governments around the world, including the US Inland Revenue Service (IRS).
    • Panamanian banks have historically been known to be vulnerable to money laundering from several sources including drug trafficking, threatening domestic and financial stability of the country’s banking sector.
    • The Panama economy is estimated to have shrunk by a massive 17% in 2020 due to Covid-19. Associated risks to banks in this environment include i) reduced deposits as businesses go bankrupt, jobs are lost and household incomes drop ii) reduced demand for bank products, for example small business loans and mortgages iii) lower interest rates, which harm bank margins.
    • Panamanian banks are very conservatively run, with an average capital adequacy ratio of 15%, nearly double the legal minimum requirement. Bank failures are rare in Panama.
    • Panama banks enjoy a moderate long-term credit rating of BBB+. Consequently, we estimate the probability of a bank default is 25% during a global recession.
    • Panama does not impose any exchange controls on inbound or outbound funds transfers. There is no withholding tax on the repatriation of capital or profits.
  • Key information on the Panama banking sector

    • Panama does not have a Central Bank. Instead, Panamanian banks are supervised by i) National Bank of Panama ii) the National Banking Commission and iii) the International Financial Center.
    • Of the 49 onshore Panamanian banks, 17 are Panamanian-owned, while 32 are foreign-owned. Foreign banks account for 44% of banking total assets, 38% of total deposits and 31% of total loans. Large banks, four of which are Colombian-owned, are part of financial conglomerates.
    • The wider Panamanian banking sector comprises over 1,000 licensed financial institutions, including securities, insurance, cooperatives, savings and loans, developments banks, finance companies, trust, leasing companies. This vast number of entities poses a major challenge for regulation and supervision.
    • It is not necessary for our Client to visit Panama to open the bank account. Our agents will courier all documents to our Client for signature. However, Panamanian banks are slow, and generally take 12 to 14 weeks to review and onboard a Client. Two weeks later, our firm will receive Internet banking activation documents and will activate online banking on our Client’s behalf.
    • In addition, Panamanian banks are increasingly reluctant to open corporate accounts for companies with complex structures involving multiple foreign beneficial owners. To increase account opening success, we recommend our Client keep the corporate structure simple.
    • There is no minimum deposit required for corporate bank account opening in Panama. However, it is advisable to maintain at least US$5,000 in the account.
    • All Panamanian banks’ e-banking and telephone help lines are available in English and Spanish.
    • Panamanian banks offer multi-currency corporate bank accounts. Most reputable banks have a minimum deposit ranging from US$5,000 to US$10,000.
    • Panamanian banks also offer an excellent range of corporate and personal banking products including i) checking and saving accounts ii) debit and credit cards iii) fixed-term deposit and iv) wealth management services.
    • There are ATMs across Panama. It is possible to make contactless payments across the country for even small transactions.
    • Unless the documents are in English or Spanish, there is a 40% probability that the bank will request the attested documents be translated by a legal translator. Clients should factor additional translation costs into the engagement.

Conclusion

Panama multi-currency corporate bank account opening is easy if you know how. Contact Healy Consultants Group PLC if your Firm needs assistance navigating through the different banking solutions.

Contact us

For additional information on our corporate banking services in Panama, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Client Engagements Manager
  • Contact me!
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