Banking & Finance in Panama: How To Open Bank Accounts After the Panama Papers

Why has opening a bank account in Panama become so difficult?

Opening a bank account in Panama is difficult because banks must comply with strict international transparency rules (OECD CRS, FATCA) and local anti-money laundering laws that were tightened after the Panama Papers. Banks now treat every new foreign client as a high-risk onboarding, requiring detailed documentation, clear economic justification, and extensive background checks.

Before 2016, many banks in Panama took a more flexible approach to foreign clients, especially if they were referred by intermediaries. The Panama Papers changed that environment dramatically, triggering:

• Closer scrutiny from the OECD, FATF-style bodies, and foreign regulators
• Implementation of Law 23 of 2015 and related regulations on anti-money laundering and terrorism financing
• A "de-risking" strategy by many banks, which simply reject clients from higher-risk countries or complex structures instead of spending compliance resources

Today, banks must perform enhanced due diligence on non-residents and legal entities, confirm tax residency, verify ultimate beneficial owners, and understand the real business activity. If your documentation is incomplete, inconsistent, or your profile seems hard to explain, many banks simply decline the relationship rather than negotiate.

How do OECD CRS and FATCA affect foreigners and Americans banking in Panama?

OECD CRS affects most foreign clients because Panamanian banks now automatically report account information to the tax authorities of your country of tax residence. FATCA adds an extra layer for U.S. citizens and green card holders, making many Panamanian banks reluctant to accept American clients or imposing higher thresholds and more paperwork.

OECD Common Reporting Standard (CRS)

• Panama committed to CRS and started automatic exchange of information for foreign tax residents.
• Banks must identify your tax residency (or residencies) and collect tax identification numbers (TINs).
• Account balances, interest, dividends, and certain other income are reported annually to the Panamanian tax authority (Dirección General de Ingresos), which shares the data with your home country.
• This makes anonymous or undeclared offshore accounts essentially impossible for compliant banks.

FATCA for U.S. persons

• Panama signed a Model 1 Intergovernmental Agreement (IGA) with the United States to implement FATCA.
• Panamanian banks must identify U.S. persons (citizens, green card holders, certain U.S. residents) and report their account data to the Panamanian tax authority, which forwards it to the IRS.
• Banks require U.S. clients to complete IRS forms (typically Form W-9) and sign waivers allowing reporting.
• Because FATCA compliance is costly and risky, some banks have adopted a "no U.S. persons" policy or require higher minimum balances and more detailed documentation from Americans.

Practical impact on account opening

• More forms: expect self-certification of tax residence, FATCA and CRS forms, and tax numbers.
• Fewer choices: not all banks will accept U.S. clients or clients from certain high-risk countries.
• More questions: banks want to know why you picked Panama, how you earned your money, and how you will use the account.

What is the difference between a personal and a corporate bank account in Panama?

A personal account in Panama is opened in your individual name and is mainly assessed based on your personal income, tax status, and background. A corporate account is opened for a company (often a Panamanian corporation or foreign entity) and faces deeper scrutiny of ownership, business activity, and economic substance.

Both types require heavy documentation, but corporate accounts demand more structure: corporate documents, shareholder details, contracts, invoices, and a clear business plan. The table below summarizes the main differences.

What documents do you need to open a personal bank account in Panama?

To open a personal bank account in Panama, you typically need a valid passport or ID, proof of legal stay if you are a resident, proof of income, at least one or two bank reference letters, and a completed due diligence form. Non-residents usually face higher documentation standards and may need apostilled and translated documents.

Core personal documents

• Identification: Valid passport for foreigners, or Panamanian cédula for citizens and permanent residents.
• Immigration status: Copy of your residence permit, visa, or application receipt if you are obtaining residency (for "friendly nations" or other programs).
• Proof of address: Utility bill, lease agreement, or bank statement showing your residential address (in Panama or abroad), often not older than 3 months.

Financial and compliance documents

• Bank reference letters: One or two letters from existing banks confirming account tenure, average balances, and good standing.
• Proof of income:
  • Employees: recent payslips and employment letter indicating salary, position, and start date.
  • Self-employed: tax returns, accountant letters, or financial statements.
  • Retirees: pension award letters, Social Security letters, or proof of regular retirement income.
• Source-of-funds explanation: A simple but detailed narrative describing how you accumulated your savings, plus supporting documents (e.g., property sale contract, inheritance documents).
• Tax information: Self-certification of tax residence and provision of tax identification numbers (TINs) for CRS; FATCA forms for U.S. persons.

Language, legalization, and format

• Foreign documents may need apostille or consular legalization depending on the country of origin.
• Banks usually require Spanish translations prepared by a sworn translator in Panama for key documents.
• Most banks prefer recent documents, typically no older than 3 to 6 months.

Timeline and common obstacles

• With a complete, clean file, expect 2 to 4 weeks for a decision.
• Red flags include: unexplained cash deposits, inconsistent income vs savings, use of tax havens, or politically exposed person (PEP) status.
• Many applications are delayed or rejected because bank reference letters are missing, vague, or not aligned with declared income and assets.

What documents do you need to open a corporate bank account in Panama?

To open a corporate bank account in Panama, you need full corporate documentation, identification of all shareholders and ultimate beneficial owners, detailed proof of business activity and source of funds, bank reference letters, and often a business plan or financial projections. Non-resident or international structures require extra evidence of economic substance and legitimate cross-border operations.

Corporate legal documents

• Incorporation documents:
  • For Panamanian companies: public deed of incorporation and certification from the Public Registry (Certificado de Registro Público).
  • For foreign companies: certificate of good standing or registry extract, apostilled and translated, plus registration in Panama if required.
• Bylaws and shareholder structure: Updated bylaws, share register, and documentation showing who owns and controls the company.
• Board resolution authorizing account opening and appointing signatories.

Beneficial owners and key persons

• Identification documents (passport or ID) for:
  • All shareholders with a significant participation (often 10 - 25 percent or more, depending on the bank)
  • Ultimate beneficial owners (UBOs), even if they sit behind another company or trust
  • Directors and account signatories
• Proof of address and bank reference letters for UBOs and signatories, similar to personal accounts.

Business activity and economic substance

• Business plan: A concise description of activities, target markets, counterparties, expected volumes, and why Panama is the right banking center.
• Contracts and invoices: Sample or existing agreements with clients and suppliers to support the declared business model.
• Financial statements:
  • Existing companies: last 1 - 3 years of financial statements or tax returns.
  • New companies: projected income and expenses for the first 12 - 24 months.
• Substance evidence where relevant: office lease, local employees, local service providers, or explanation if the company is a holding or investment vehicle.

Source of funds and ongoing flows

• Detailed explanation of:
  • Initial deposit: where the starting capital or assets come from, supported by contracts or statements.
  • Expected monthly flows: typical size and countries of incoming and outgoing transfers.
• Banks will be cautious if most flows involve sanctioned, high-risk, or uncooperative jurisdictions.

Time and cost expectations

• Approval often takes 4 to 8 weeks or more, depending on complexity and responsiveness.
• Some banks charge a compliance or account opening fee, often between USD 250 and 1,000 for corporate accounts.
• Legal fees for preparing the file and coordinating with the bank commonly range from USD 1,500 to 3,000+ for straightforward structures, increasing with complexity.

What are bank reference letters in Panama and how do you obtain them?

Bank reference letters in Panama are formal statements from your existing banks confirming your relationship, account standing, and general conduct as a client. Panamanian banks treat these letters as a key part of your credibility, so obtaining strong, clear letters from reputable banks is crucial.

Typical content of a bank reference letter

• Name of the account holder (individual or company) and account number (sometimes masked partially).
• Length of the banking relationship, often expected to be at least 1 - 2 years.
• General description of account behavior: "operated in a satisfactory manner" or "in good standing."
• Approximate average balances or a qualitative reference to "average balances maintained."
• Bank contact details and signature of an authorized officer, usually on letterhead.

How to request a bank reference letter

1. Check your current bank's policy: Some banks have standard formats or online request forms.
2. Explain the purpose: Indicate it is for opening an account in Panama so they know the stakes.
3. Confirm format requirements: Request the letter on official letterhead, signed in ink, and sometimes stamped.
4. Consider multiple letters: If you work with more than one bank, obtaining 2 references can strengthen your file.

Common issues and how to avoid them

• Some institutions refuse to provide balance information; in that case, ask for a qualitative statement about satisfactory operation instead.
• Letters that are too generic or vague may not satisfy Panamanian banks; ask your bank to specify the relationship duration and clarify "good standing."
• Make sure names and passport or company details in the letter match exactly the details in your application and documents.

How does proof of income and source-of-funds analysis work in Panama?

Proof of income and source-of-funds analysis in Panama involves showing how you earn money now and how you accumulated your existing wealth, using concrete documents like payslips, tax returns, contracts, and sale agreements. Banks then assess whether your declared profile is consistent with your assets, expected transactions, and risk level.

Proof of income

• Employees:
  • Employment contract or employer letter stating salary, role, and start date.
  • Recent payslips (usually 3 - 6 months).
  • Tax returns where relevant to show declared income.
• Business owners / self-employed:
  • Corporate financial statements and tax filings.
  • Key contracts with customers or suppliers.
  • Invoices and proof of payments received.
• Investors / retirees:
  • Brokerage statements, dividend reports, or portfolio statements.
  • Pension or annuity letters, Social Security statements.

Source of funds and source of wealth

• Source of funds is about the money that will pass through the account:
  • Explain what payments you expect, from whom, and for what.
  • Provide supporting contracts, invoices, or rental agreements.
• Source of wealth is about how you built your current net worth:
  • Property sale: provide sale deeds and bank receipts.
  • Business sale: share share purchase agreements and closing documents.
  • Inheritance: show wills, probate documents, or notarial deeds.

Why this analysis is strict post-Panama Papers

• Law 23 of 2015 and regulations from the Superintendencia de Bancos de Panamá require banks to understand and document clients' economic background.
• Banks face heavy penalties and reputational risk for onboarding clients with unclear or suspicious funds.
• If your explanations are vague, unsupported, or inconsistent, the easiest solution for a bank is to decline the relationship.

How can a legal introduction or introducer lawyer speed up bank compliance in Panama?

A legal introduction from a reputable Panamanian law firm can speed up bank compliance by pre-screening your profile, helping you assemble a strong documentation package, and presenting your case directly to the right bank officers. Banks are more comfortable when a known local professional has already done basic due diligence and can vouch for your legitimacy.

What a strong legal introducer actually does

• Pre-assessment:
  • Reviews your nationality, business activity, and goals to match you with banks that accept similar profiles.
  • Flags risks early (e.g., complex structures, high-risk countries, PEP status) and proposes mitigations.
• File preparation:
  • Helps you obtain properly formatted bank reference letters and proof of income.
  • Ensures apostilles, translations, and dates satisfy bank policies.
  • Drafts clear source-of-funds and business activity descriptions in Spanish where needed.
• Direct presentation to the bank:
  • Submits your file to a dedicated account officer or compliance contact rather than a generic front desk.
  • Answers follow-up questions in "compliance language," avoiding misunderstandings and unnecessary delays.

Why banks value a legal introduction

• Panamanian banks operate in a high-regulation environment and rely on "know your introducer" as part of their risk management.
• When a well-known firm introduces you, the bank assumes that basic checks were already performed and that the firm will not risk its reputation on a problematic client.
• This does not bypass compliance, but it often leads to faster review, clearer communication, and higher approval rates for legitimate clients.

When an introduction is almost essential

• You are a non-resident with no previous ties to Panama.
• Your company structure involves multiple jurisdictions, trusts, or holding entities.
• You are American, a national of a high-risk country, or a politically exposed person (PEP).
• The account is for a business in a sensitive sector (crypto, online gaming, remittances, etc.), where banks require very detailed compliance comfort.

Which local laws and authorities regulate banking and compliance in Panama?

Banking and compliance in Panama are mainly regulated by the Superintendencia de Bancos de Panamá under the Banking Law (Decree Law 9 of 1998 and amendments) and the anti-money laundering framework in Law 23 of 2015. These local rules operate alongside international regimes like FATCA and the OECD Common Reporting Standard, shaping how banks handle account opening and monitoring.

Main Panamanian authorities

• Superintendencia de Bancos de Panamá (SBP):
  • Licenses and supervises banks in Panama.
  • Issues agreements (Acuerdos) and circulars detailing due diligence standards and reporting duties.
• Unidad de Análisis Financiero (UAF):
  • Receives suspicious activity reports from banks and other obligated entities.
  • Coordinates national efforts against money laundering and terrorism financing.
• Dirección General de Ingresos (DGI):
  • Receives CRS and FATCA data from banks and exchanges it with foreign tax authorities.

Key statutes and regulations

• Decree Law 9 of 26 February 1998 (Banking Law), as amended by Law 42 of 2008:
  • Defines banking licenses, prudential rules, and supervisory powers.
• Law 23 of 27 April 2015:
  • Sets the legal framework for preventing money laundering, terrorist financing, and related offenses.
  • Imposes customer due diligence and reporting obligations on banks, lawyers, and other entities.
• Regulations and Agreements of the SBP:
  • Detail how banks must perform KYC, identify beneficial owners, monitor transactions, and retain records.
• FATCA IGA and CRS implementation rules:
  • Require identification and reporting of foreign tax residents and U.S. persons to the DGI.

Practical impact on clients

• Every new account involves a documented KYC file, risk rating, and (if necessary) enhanced due diligence.
• Banks must keep your records updated, so they may request new documents periodically or when your activity changes.
• Failure to respond to information requests can lead to account freezes or closures.

When should you hire a Panamanian banking lawyer or compliance expert?

You should hire a Panamanian banking lawyer or compliance expert when your profile is anything more than very simple, or when you need a corporate or non-resident account. Professional help becomes critical if you are American, operate cross-border businesses, use holding structures, or have a complex income or wealth history.

Situations where expert help adds real value

• Non-resident individuals who have no local history and need a first account.
• Corporate structures with multiple shareholders, foreign entities, or trusts.
• Clients from higher-risk countries or industries that receive extra scrutiny.
• U.S. persons dealing with FATCA and a limited pool of willing banks.
• Clients with prior compliance issues, rejected applications, or accounts closed elsewhere.

What to look for in a Panamanian advisor

• Proven experience with banking introductions and current relationships with several local banks.
• Clear explanation of their process, expected timelines, and realistic chances of success based on your profile.
• Transparent fee structure that distinguishes between initial assessment, file preparation, and ongoing support.
• Ability to coordinate tax and legal considerations in your home country so that banking is part of a coherent overall strategy.

Cost-benefit considerations

• Professional fees (often USD 1,000 - 3,000+ per mandate) can seem high, but failed or repeated applications also have a cost in time and reputation.
• A stronger, well-prepared first application usually has a higher approval rate than multiple weak attempts at different banks.
• For corporate or higher-net-worth clients, professional support is often the difference between getting banked and being permanently "derisked" by the local system.

What are the practical next steps if you want to open a bank account in Panama?

The practical next steps are to define your goals (personal vs corporate, resident vs non-resident), select an appropriate bank with local guidance, assemble a complete documentation set, and submit a well-prepared file, ideally through a legal introducer. You should also align your tax and residency strategy so your Panamanian banking is fully consistent with your obligations at home.

Step-by-step roadmap

1. Clarify your goal
   • Personal account for living in Panama, saving, or receiving income.
   • Corporate account for a Panamanian or foreign structure, trading, or holding assets.
   • Decide whether you will pursue Panamanian residency, which can ease onboarding.
2. Engage a local lawyer or advisor for a preliminary assessment
   • Share your nationality, tax residence, business activity, and approximate asset level.
   • Get feedback on which banks are more likely to consider your profile.
3. Collect and prepare documents
   • Request bank reference letters from your current banks.
   • Gather proof of income, tax returns, contracts, and any documents showing source of wealth.
   • Arrange apostilles and sworn translations into Spanish where needed.
4. Work with your advisor to build a clear narrative
   • Prepare concise explanations of your background, your business, and your reasons for banking in Panama.
   • Ensure all documents are consistent with that story.
5. Submit through a legal introduction and respond quickly to bank queries
   • Your lawyer presents your file to selected banks and follows up with compliance teams.
   • Provide any additional documents or clarifications within days, not weeks, to avoid losing momentum.
6. Plan for ongoing compliance
   • Expect periodic requests for updated documents (proof of address, tax forms, financials).
   • Keep your declared tax residence and actual behavior aligned to avoid reporting inconsistencies.
   • Inform your bank proactively if your business model or transaction volumes change significantly.

Approach Panama not as a place for easy, anonymous banking, but as a serious regional hub where well-prepared, transparent clients can still build strong banking relationships. With the right strategy and documentation, both individuals and companies can successfully open and maintain accounts despite the tighter post-Panama Papers environment.