The Ins and Outs of Banking In Panama: Q&A

Answering All of Your Most Important Panama Banking Questions

“Kathleen, I’m now about 30 days from my move to Panama. Very excited but also a little panicky about a couple of issues I’m working to resolve.

“One question that I hope you can shed some light on involves money. I want to buy a used car and rent a home as quickly as possible so will need US$30,000 to US$50,000 in hand to start my new life.

“I’d really appreciate some suggestions on how best to move the money to Panama.”

–Howard P., United States

You need a local bank account.

If you’ve started your residency process, opening an account should be quick and easy. Try Banistmo or Scotiabank.

Getting an account opened will be more difficult if you haven’t yet applied for a residency visa.

As you’re planning to send a relatively large sum of money to a relatively new account, you should be prepared for some hassle. The bank will have lots of questions and will want to see documentation. Your banker will want to know where the money came from (savings, presumably) and what you’re planning to use it to buy (a copy of the purchase agreement for the car and a copy of the lease for the rental should suffice).


How to Open a Bank Account In Panama

“Kathleen, I’m registered to attend your upcoming conference in Panama, and I’d like to inquire about two things.

“First, you wrote about an investment regarding a plot at a teak plantation (for US$12,200 I believe it was) as a vehicle for residency status. Is this something that is still currently available and is this something I can initiate when I’m there for the conference next month?

“Second, I also remember reading something about foreigners having the ability to open a bank account there in Panama. Can you tell me if this is possible and if there is a minimum amount to open such an account?

“What I’m thinking is, if it’s possible, I’d like to open a bank account there during my visit (if the teak farm investment is still an available option), and I could wire the balance of said funds needed to execute that investment after I get back to the United States.

“Does this sound plausible? Any help or direction you could provide me in this regard would be highly appreciated!

“Also, I got the copy of your new book that was promised when I registered for the conference, by the way. Thanks!”

–Rob S., United States

Yes, the teak investment for residency option is still available. Yes, we’ll be discussing this during the conference. And, yes, you’d be able to begin the process of applying for this program during the event.

Further, yes, it is possible for an American to open a bank account in Panama, though the reality is that this is becoming more difficult all the time. Still, again, it’s possible and, yes, you may be able to open an account during your time in the country for the conference as long as you bring the required documents with you.

You’ll need a reference letter from your current bank; in fact, two bank reference letters from two different banks would be better. Further, note that many Panama banks require this letter to be addressed specifically to that bank. A “To whom it may concern” letter probably won’t work, meaning you may not be able to get the letter(s) you need until you know at which bank you want to open an account.

In addition, you’ll need proof of address (a current utility bill is most typical for this) and ID (your passport).

Please understand that, even if you have all the required documents, including the reference letters made out in the name of the correct bank, you are not guaranteed to be able to open an account. It is possible…but, I say again, harder all the time. We’ll discuss this in much greater detail during the conference. I’ll look forward to meeting you there.


“Kathleen, do I have to be present in Panama to open a bank account?”

–Joseph R., United States

Yes, a personal meeting is required.


Most Secure Banking Options in Panama

“Kathleen, how to find safest, most secure options for banking in Panama?”

–Marion D., United States

You could start at the Panama Banking Superintendent’s website.

However, you’ll need to narrow your search depending on the type of banking you want to do. If you are shopping for a bank where you keep an operating account (for paying your local bills), then your priority is service and services (will you have to pay for checks…will you be able to get a debit card attached to the account…will you be able to make local ACH payments…how many branches does the bank have…etc). For this kind of an account, my preferred options include Scotiabank, Banco General, and Tower Bank.

If you’re looking for a private bank (a place to park US$500,000 or more), then your priority is investment options. Do the ones that the bank generally recommends jibe with your investment criteria? Some banks offer only managed accounts, while others simply invest in what you tell them to invest in.


Documentation Required to Open a Bank Account in Panama

“Kathleen, I am in Panama now. Is there anything I can do to set up banking or apply for an account while I’m here?”

–Sherri G., Panama

As long as you’ve got the documentation you’ll need, the answer is yes. Specifically, to open a bank account in Panama, you’ll need a reference letter from an existing bank where you hold an account; some banks will ask for two bank reference letters. Usually, these can be issued only within the country where the account is held, in person, meaning that, again, if you didn’t obtain these before leaving the States to come to Panama, you’re going to have to return home to get the reference letters…and then return to Panama to open your account.

In addition to at least one reference letter, all banks are going to require that you prove some presence in Panama, through a rental contract or a utility bill, for example.


High-Interest-Earning CDs at Panama Banks

“Kathleen, I’m looking to establish a financial ‘flag’ in Panama, perhaps a CD or time deposit.

“Which banks do you recommend? I have read that some banks offer up to 8% interest on amounts US$25K and higher. Is this anywhere near correct?”

–Betty T., United States

One credit union-type institution is said to offer rates in the 8% range, but most banks in Panama are offering 4.5% to 5.25% interest on a 5-year CD. Banco Delta has been advertising their 5.256% rate on billboards across the city.


“Kathleen, in a previous posting, Lief Simon says he has ‘given up on Panama banks.’ Have your Panama banks (UniBank in specific) canceled your accounts?”

–Edward S., Panama Circle Member, United States

Yes, we’re very frustrated with Panama banks right now, but, no, fortunately, none have closed any of our accounts (yet).

As far as we know, Unibank has kept open all foreign accounts that were opened before their change of policy (which disallowed new accounts for Americans) in July 2012. However, they have instituted fees that have prompted many foreigners to close their accounts voluntarily. And just this week I was told that Unibank will open accounts for non-resident foreigners with a minimum account balance of US$5,000. In addition to the hefty monthly fees, you also now have the privilege of paying them a US$300 account opening fee that they keep even if you aren’t approved for an account.

Banks around the world are increasing their fees in reaction to the FATCA rules. This will continue. Even in this context, though, Unibank’s new fees are particularly steep.


Restrictions On Foreign Banking In Panama

“Kathleen, I am very confused. Panama extends a wonderful retirement program to those who enter and meet the very generous requirements; however, now, one more bank in Panama has said no thanks to U.S. citizens opening bank accounts?

“From everything I’ve read, Panama is very encouraging toward international visitors and residents, but if you are American and want to invest there, who can afford the 30% tax it will take to move money to Panama for payment of the investment?

“I just read that Panama is refusing citizenship to U.S. people. I also just read that there are credit unions that pay up to 9% on money in accounts.

“Bu after Jan. 1, 2013, we (Americans) will not be able to move money to Panama without paying 30%?

“Does this affect ATM withdrawals? I’m in Panama, and I go to the ATM to withdraw from my U.S. account. Will I be charged the 30% tax?”

–Nan D., United States – (July 10, 2012)

The “one more bank” (Unibank) isn’t focused on U.S. citizens. It has said it will no longer open accounts for foreigners in general–at least not until after you’ve been resident in Panama for two years. This isn’t uncommon. Many countries have rules like this.

Most other Panama banks want to see a connection with the country before opening a bank account for a foreigner. That connection can be legal residency, or it can be owning property even without residency.

Also, very important: The 30% isn’t tax; it’s withholding. And the 30% withholding will apply only if the foreign bank doesn’t comply with IRS rules. All of the big banks in Panama likely will comply with the IRS rules.

I don’t know where you read that Panama is refusing citizenship to Americans. That’s not something we’ve heard.

The 9% CD rate at a credit union isn’t likely to be real. We’ve heard rumors of this offer, too, for years, in fact. However, other CD rates in Panama right now are in the range of 3% to 5%. We’ve heard reports of some CD with some bank somewhere that has been paying 9% for 44 years. That doesn’t make sense, as interest rates change, especially over 44 years. Do your due diligence before putting money into any kind of offering like this. If it sounds too good to be true…

No one knows for sure at this point how the FATCA rules will affect ATM withdrawals. Presumably, the amounts would be too small for the IRS to care about. And, again, the 30% isn’t a tax. It’s withholding. You would report it as a tax payment on your tax return and get it back as a refund. In theory. Not convenient, but not a tax.


“Kathleen, my wife and I will be attending your Emergency Offshore Conference. I would appreciate it if you could clarify a point for me prior to our arrival, which could save us an extra trip.

“Is it currently possible for an American citizen to open a bank account in Panama without a Panama address? If not, is it possible to open an account for an LLC or IBC that we own? Must this be located in Panama, or could it be set up in a third country?

“Does this list cover the document requirements?

  • Notarized and apostilled copy of passport
  • Notarized and apostilled copy of driver’s license
  • Bank reference letter
  • Professional reference letter (from a doctor, dentist, lawyer, accountant, real estate agent, insurance agent, etc.)

–Henry M., United States

First, regarding the required documents list:

Your original passport and driver’s license should be fine. They don’t need to be apostilled, as long as the bank is able to take its copies from the originals.

The bank will want two bank reference letters. The professional reference letter can come from your attorney in Panama.

Typically, you are not going to be able to open a bank account in Panama as a non-resident.

Our preferred bank in this country, Scotiabank, will open an account for a non-resident who owns property or who has some other connection to the country. As a non-resident, you might be able to open a corporate account with Scotiabank, but the corporation would have to be set up in Panama, which can take more than a few days.


Mid-February last year we put some money on deposit with Stanford Bank in Panama.

Two days later (no kidding), the bank ceased operations.

Both the management of the bank and the government of Panama have maintained ever since that Stanford Bank Panama had nothing ever to do with the fraud perpetrated by Stanford Financial Group mastermind Robert Allen Stanford. Still, the Panama bank was caught up in the panic that followed the allegations against Mr. Stanford…and had to close its doors. The bank’s assets (including our deposit) were subject to an administrative hold.

In the 15-plus months since, we and other depositors have been assured by the Panamanian banking superintendent that the Panama bank would be reopening…only no one would commit to when. Meantime, our money was off-limits.

“You opened an account where?” friends have chided us again and again, with broad grins. “You’ll never see that money again…”

(June 1, 2010)

I was inclined to think they might be right.

That is why I’m pleased today to be able to report that Stanford Bank Panama reopened yesterday as Balboa Bank! As promised, all assets on deposit with Stanford Bank Panama are now on deposit with Balboa Bank. And (hoorah!), starting this week, they are again accessible by account-holders.

Lief went this morning to the Balboa Bank branch in Punta Pacifica to request a new checkbook. First, yes, the bank is open. Second, yes, our funds are there. We can collect our new checkbook on Friday.

Further, we’re assured our money on deposit has been accruing interest these past many months. We await details of the current balance with interest.


“I have a bank account with Banco National Costa Rica but am not really happy with the service. I would like to open an account in Panama. Could you recommend a bank in that country? Service is what I’m looking for, with easy accesses to my money when I travel.”

— Peter K., United States (December 15, 2008)

Our tax correspondent with many years experience doing business in Panama, replies:

“I usually recommend Multibank and Credicorp. The largest international bank is HSBC, but they can be difficult to work with.”

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