Introduction – The offshore world is changing rapidly in these recent months. Some jurisdictions have improved and many others have gotten far less secure. We are going to analyze Panama as it is as of February 2010.

Panama Banks Oddities – Many Panama banks are as a general rule are not opening accounts for people from the USA, Russian Federation, Africa (except South Africa) and many other countries. Some Panama banks will still open accounts for Americans. Other banks in Panama request people to sign waivers of bank secrecy and report financial information to taxation authorities in other countries. Some banks require two years of tax returns, financial statements and other invasive information. Panama banks will NOT issue and credit or debit card to a corporate or foundation account. This comes from the banking superintendent. The person needs to open a personal account and get the card issued in their personal name. They do not issue any card in the name of a corporation or foundation.

Panama Banks Require Bank Reference Letters (Suspicious Transactions)– The Panama banks all require at least one bank reference letter. Contrary to what our competitors like to write this can be construed as a suspicious transaction in many countries. Those knocking this comment generally are unable to open bank accounts for people without the bank reference letters. The banks are not going to tell you that the reference letter request is a suspicious transaction. It is a no brainer that you want the letter to open an offshore bank account.

A lot of banks have stopped issuing these bank reference letters for this reason. They do not want to keep doing the paperwork related to these bank reference letters and suspicious transaction reports. Why else would the bank not want to write a five-minute letter for you? We prefer our clients to avoid obtaining bank reference letters at all. The Panama bank has to call the bank issuing the bank reference letter and speak to the person who signed the letter. You better believe the person at the bank that wrote the letter will make a notation of the verification call somewhere in the records. We have other banking options where such a letter is not required (Hong Kong, Belize, etc). Some banks require two or even three bank reference letters in Panama.

Panama Banks Require ID Documents to be Apostilled – It is uncommon to see an offshore bank require documents to be notarized and then Apostilled. The Apostilles in the USA work for the State Government. They are generally in the Department of State for that State. Again they will want to know what the Apostille is being used for. Think suspicious transaction. In countries other than USA the Apostille is a private party like a notary. None of the banks outside of Panama will ask for an apostille.

Panama Bank Customer Service – Panama Bank customer service generally is not what is expected of a bank by people from North America, Europe and Asia. First off Panama is a Spanish-speaking nation. The bank employees may or may not speak English. Then the amount of English they speak can vary. Their online banking is most often in Spanish. The customer service people are in the habit of seeing people live in the bank. They will not answer the phone while they are with a person in that this is considered to be rude. Often there will be three or four people waiting to see the customer support person. Thus forget the phone.

Emails may or may not get answered. You must rely on the online banking to see if a wire came in or was sent out. For some this is ok, for others they get upset. Hong Kong and Belize have English as their official language. There customer support is similar to North America or Europe. The online banking is in English. With Hong Kong and Belize you can bank in multiple currencies while Panama is on the USD. To learn more about Hong Kong banking go here:

Hong Kong Bank Accounts and Hong Kong Corporations

To learn more about Belize banking go here:

Bank Account in Belize

Panama Corporation – We still like the Panama Corporation. They are anonymous bearer share corporations. The owners name is not in any public registry or database. The owner is the one who physically has the share certificates. The share certificates can be made out in blank, made out to a person, made out to a corporation, trust or foundation. The corporation must be formed and filed by a lawyer. The lawyer by law must know the identity of the client but this information stays with the lawyer and is privileged attorney client information. We ask for a notarized passport and driver license, no reference letters of any sort are required. The government of Panama could request this information on a criminal matter but this is something rarely ever seen.

The interesting thing about Panama Corporations is that they can be transferred to another person or corporation, trust, foundation etc without having to report this transfer to the lawyer or the Panama government. This means no one ever really knows who owns the corporation including the lawyer who formed the corporation and the government of Panama. We use the Panama Corporation to open the bank account in Belize, which we think is an excellent package for security, privacy, convenience and customer support from the bank. For more information on Belize go here:

Bank Account in Belize

Panama Foundation – Panama Foundations are anonymous in that the owners name is not in any public registry or database. In fact technically there is no owner for a Panama Foundation. The foundation itself cannot engage in business directly but can own corporations that do engage in business. The foundation can use a trust as its beneficiary to make things more confusing for a financial enemy to follow. We still like Panama Foundations.

Panama Tax Treaties – Panama has resisted signing any tax treaties for information sharing to date. They say they will not sign any, just double taxation treaties. The OECD, which is the organization behind the tax treaties, is only interested in treaties that allow for information sharing pertaining to taxes. Simply signing double taxation treaties will not appease the OECD. On the other hand about 35 nations have not signed any OECD tax treaties and have not expressed any intent to do so. It appears most unlikely that there will be any blacklisting of nations not signing tax treaties since there are so many non-participating nations. Some of the countries not signing the OECD treaties are: Cuba, Venezuela, Brazil, Bolivia, Ecuador, Suriname, Ghana, Guatemala, Egypt, Iran, Saudi Arabia, Hong Kong, Russian Federation and others. So at this time Panama has not entered into any TIEA agreements (Tax Information Exchange Agreements).

Mutual Legal Assistance Treaties – Panama is in Mutual Assistance Treaties (MLAT) including one with the USA. This is for sharing information in criminal cases. A criminal case has to be on file in the country requesting the information. The information request is slow, burdensome and goes through diplomatic channels. The procedure does not allow for fishing expeditions. The MLAT is not supposed to be used for tax only offenses. If the tax offense involves fraud, tax fraud, conspiracy, money laundering etc it could be used for information and even to freeze an account, ultimately. This makes a lot of people uncomfortable with the Panama Banks.

http://www.panamalaw.org