In this article, we’re exploring the Panama banking scandal. We’ll also share the potential challenges, global market shifts, and the risks of banking in Panama that foreign non-residents should be aware of before applying to open accounts here.
This article is part of our free series on the risks of banking in Panama. You can access this series right now by using the link above.
In addition to detailed account opening guides, this free series on Panama banking also discusses the largest banks in Panama, Panama opening requirements, the costs of banking in Panama, and much more. Use the link above to start exploring all of your free Panama banking content right now.
Alternatively, use the table of contents to continue exploring more information on the Panama banking scandal.
Table of Contents
- What Is the Panama Banking Scandal?
- What Are the Challenges of Opening Accounts With Panamanian Banks?
- Frequently Asked Panama Banking Questions
- Do You Want to Open a Panama Bank Account?
What Is the Panama Banking Scandal?
The Panama banking scandal refers to the Panama Papers leak in 2016. Confidential documents held by the Panamanian law firm Mossack Fonseca were leaked, exposing illegal offshore financial activities of Global figures, including celebrities and politicians.
These documents revealed evidence that these Global figures, clients of Mossack Fonseca, were using shell companies for tax evasion, money laundering, and hiding assets. Because of this scandal, international investigations were initiated and stricter regulatory measures were implemented.
Panama has been a constant target for international regulators since the 2016 Panama Papers scandal. The issues raised have little to do with banking and instead with the complaints raised by regulatory bodies centered around reporting, activities carried out by the legal profession, and tax evasion.
How Has the Banking Scandal Affected Offshore Banking for Non-Residents?
Because of the increased scrutiny of banking regulations due to Panama’s banking scandal, the financial infrastructure and banking system of Panama have affected account holders, incoming and outgoing transactions, and even correspondent banking relationships.
It’s important to note that Panama is currently listed on the three most impactful blacklists, including FATF greylist, EU blacklist, and the UK blacklist. These lists matter because they can impact how you send and receive transactions to and from Panama.
Panama is usually suitable for individuals looking to transact with countries that do not actively participate in these lists or are members but ignore these lists. The most common example would be the United States, which supports Panama due to the economic relationship between the two countries and, in particular, the Panama Canal.
Offshore banking in Panama for non-residents, as you can see, does come with some challenges. We share these challenges, specifically related to account opening, in more detail below.
What Are the Challenges of Opening Accounts With Panamanian Banks?
Opening bank accounts with Panamanian banks as a foreign non-resident can be very challenging. It’s important to note that your citizenship and residence can influence which challenges impact your account opening. This is especially true if you come from a country that is on an international watchlist or is otherwise restricted.
Here are nine common challenges non-residents face when opening bank accounts with Panamanian banks.
Panama Account Opening Challenges
- Very few Panama banks accept foreign non-resident clients
- Most (not all) Panama banks require an in-person meeting
- Panama banks are notorious for requiring stacks of paperwork
- Certain documents may need to be translated
- Certified documents are often required
- Bank reference letters are usually required
- Not all bankers are familiar with foreign clients
- Limited account opening support in English
- Getting bankers to respond on time is challenging
These challenges do not exist at all Panamanian banks. These challenges do exist, however, at many of the mainstream banks that most individuals consider opening accounts with. Bank selection is an important factor to consider when choosing where to open a bank account in Panama as a foreign non-resident.
If you are interested in learning more about banking in Panama, don’t forget to visit our comprehensive guide on banking in Panama, available in the link above.
Alternatively, if you would like to explore all of your offshore banking options, download our free guide and compare Panama to some of the top banking jurisdictions available.
Do You Want to Explore All Your Offshore Banking Options?
Frequently Asked Panama Banking Questions
Below are a few of the most common questions we receive from people exploring the Panama banking scandal. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Did the Panama Papers Reveal?
The Panama Papers scandal of 2016 revealed evidence Global figures, including celebrities and politicians, were using shell companies for money laundering, tax evasion, and to hide their assets.
What Happened to Mossack Fonseca?
Mossack Fonseca, the Panamanian law firm that assisted their clients in establishing shell companies to hide their assets and avoid paying taxes, closed their doors within two years of the Panama Papers investigation.
Do You Want to Open a Panama Bank Account?
If so, you can access GlobalBanks IQ and start the process of applying in Panama in a few clicks.
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To learn more about opening accounts with GlobalBanks IQ, use the link in the top menu. Or, contact us directly with any questions!
