Bank Fees Offshore And The Cost Of FATCA Compliance

“Kathleen, I am an American who bought an oceanfront lot and built my dream home in Panama. I also subscribed to your magazine and purchased some reports which helped me in choosing Panama. Recently, I got hit with a US$250 Foreign Account Fee from my bank in Panama.

“First, I think this is a discriminatory act versus Americans because my Panama neighbor who is a Canadian citizen did not get hit with this fee. Now is this because the United States has strict reporting standards with Panamanian government and other countries don’t? Even still US$250 fee on an account with a monthly average of US$2,500 to pay utility bills and HOA is beyond harsh and discriminatory.

“I wrote a heated email to my bank because this is not the first act of discrimination I have experienced, and it has made me think twice about investing. This may push me to sell and look for an ocean condo in the United States and avoid this discrimination, which is rampant in Central America. I know you are up on all the latest banking rules. Please advise on what you know.”

–John G., Panama

Yes, the cost of banking overseas is rising, and new fees are being introduced all the time by banks around the world. It’s nothing to do with Central America and everything to do with FATCA. Don’t hold the fee against your bank or against Panama or against the region where Panama and your bank happen to sit. Hold it all against the U.S. government, whose war on all things “offshore” is making it more difficult and expensive for Americans, especially, to bank overseas. The increased and added costs of doing business with a bank in another country are a direct result of the expenses all banks are incurring as they struggle to comply with FATCA regulations.

Any bank anywhere in the world that isn’t charging a fee to offset the costs of FATCA compliance will be charging one soon. You aren’t going to escape this long term.

I’d suggest trying to keep the situation in perspective. The U.S. government is doing everything it can think of to keep U.S. citizens and their money within U.S. borders. Pulling up stakes and fleeing Panama because you don’t want to pay your bank the fee it is compelled to charge to cover the expenses the U.S. government is forcing it to incur means the U.S. government wins.

Thinking more pragmatically, selling out of Panama and returning to the States would cost you many, many years worth of the banking fee you’re trying to avoid. You’ll have the costs of selling, of shipping, of moving, of rebuying Stateside, etc.

Maybe easier and cheaper to stay put.

Unless you’re not happy in Panama. That’s another story. But I wouldn’t think about moving from one country to another to avoid a bank fee.


“Kathleen, I retired recently and your book and newsletter were the inspiration we used to make a decision that we were going to try an adventure outside the States. Due to the cost of health care coverage, this seems to be the only realistic hope that we had so that I could retire at age 60.

“We are on our way for the first stop in our adventure in San Miguel de Allende, Mexico. We are set for Spanish classes when we get there and have committed in our minds to 12 months of SMA and then on for other opportunities in locations like Ecuador, Panama, and maybe Belize.

“We continue to read your newsletter and wanted to tell you thank you for the inspiration that has given us the courage to sell our home and all of our possessions and, along with our dog, to begin our transition to a retirement adventure!”

–John and Sandi W., formerly of Memphis, Tennessee, but now wayfaring adventurers

Continue Reading: Retire Overseas Conference Alumna Alice Retired To Cuenca, Ecuador

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