offshore bank accounts and tax havens incorporations

Panama Bank Secrecy Laws

Panama is the "new Switzerland". Switzerland was once known for numbered bank accounts, but today these types of accounts are no longer available. Panama does not have numbered accounts, but it does have the next best thing. Panama has bearer share corporations which can own a bank account. These corporations have no ownership records. The person in possession of the share certificates owns the corporation, and thus the bank account.

Who's name is on the bank account?

Someone has to sign on the bank account. Every corporation has one or more people with signing authority on its bank accounts. This does NOT mean they are the owner of the funds. It merely means the corporation has assigned them the responsibility of managing the bank account. The beneficial owner of the bank account is the corporation, not the signatory. Take Walmart for example. Walmart has certain employees who are authorized to sign on one or more of their many bank accounts. Walmart is the beneficial owner of the money, while the signatory is just an employee. If the employee were to be sued because someone slipped on his/her driveway walmart's money is not at risk. Similarly the employee does not claim walmart's money on his/her taxes.

I understand I am just a signatory on the bank account and the bearer share corporation owns the money but I still want to know who can find out I sign on the bank account and how?

Panama has strong bank secrecy laws, both on paper and in practice. Here are some of the more relevant sections of Panamanian banking law:

Article 74 of Decree 238 prevents the Panama banking commission from conducting investigations on individual banking clients. Any information it uncovers while doing its regulatory operations cannot be revealed to any person or authority, unless subpoenaed by a Panama court order. Anyone found violating this order is subject to Article 101 which states: " Any person who furnishes information in violation of this Cabinet Decree, or who violates any of the prohibitions established in it, for which no specific punishment is provided for, shall be subject to a monetary fine as determined by the Banking Commission, without prejudice to applicable criminal and civil liabilities."
Article 65 of Cabinet Decree 238 regulates how the National Banking Commission gets access to banking information and documents. It clearly states that the Commission may only inspect the books of the bank in general and cannot single out individual bank accounts. This includes both deposits and securities held by the bank. Again this can only be broken by a court order.
Now look at Article 170. "Any person that in the course of his occupation, employment, profession or activity obtains knowledge of confidential information that in the event of being made public could inflict damages, and such person discloses that information without the consent of the concerned party; or in the case that disclosure of such information were not necessary to safeguard a higher interest, shall be punishable by imprisonment of 10 months to 2 years or a comparable fine, and the inability to practice his occupation, employment, profession or activity for not more than 2 years."

Now that we have established that the signatory's privacy is protected by Panama bank secrecy laws, there are still a few loose ends to tie up.

Under what circumstances will a Panama court allow banking secrecy protection to be lifted?

In today's world there are 3 reasons in which your banking secrecy can be violated no matter what jurisdiction your bank in. They are severe criminal activity like terrorism, money laundering and drug smuggling. Tax evasion is NOT a crime in Panama, and no court in Panama will allow your banking secrecy to be violated for tax related issues. (Under no circumstances are we recommending you commit tax evasion in your home country.)

What about MLAT (Mutual Legal Assistance Treaty)?

Panama is a member of this treaty. Since 9/11 all jurisdictions that can move funds in and out the North America and Europe are in this treaty. At first this treaty looks dangerous, but on further investigation it is not so bad and here is why:

To comply with a request the following conditions must be met:

The activity under investigation must be a crime in BOTH countries. (again tax evasion is not a crime in Panama)
The requesting country MUST show that there is no other way for it to obtain this information and that without this information it cannot successfully prosecute the case.
The requested information must be specific. No fishing expeditions.
The requesting country must file a criminal case in its NATIONAL courts. Minor criminal cases usually are not brought into the NATIONAL courts

After all these conditions are met, the request is sent through diplomatic channels (which are slow). Panama then considers the request. Panama does not like to break its banking secrecy laws. Panama may then ask for more information or clarification or do its own investigation into the matter to see if the matter warrants breaking banking secrecy. Many of these request are NOT honored by Panama. Basically the matter needs to be serious by Panama standards. Panama can deny the request on any of the grounds listed above.

Panama will not and does not comply with information requests unless the matter is a serious criminal activity. The proceedings are slow and often end in the request being denied.

What about Tax Treaties?

PANAMA DOES NOT PARTICIPATE IN ANY TAX TREATIES PERIOD, nor does it recognize tax related investigations as criminal. As such, Panama will not disclose your financial information for any tax related reasons.

For setting up Corporate Bank Accounts with our primary correspondent banks in Panama, we charge a set up fee of US$700.

For setting up Corporate Bank Accounts with other banks in Panama, we charge a set up fee of US$1000. If you know of a particular bank that you would like to set up an account at, you simply notify us and we can assist you in setting it up .

* Time frames for setting up accounts with banks other than our primary correspondent bank may take longer due to additional documentation that may be required.

About Panama Banks:

Panamanian Banks are of the most stable banks in the world, being home to the second largest international banking center in the world next to Switzerland. Panama also has the best bank secrecy laws available in the world today.

There are approximately 150 international banks in Panama. We have relationships with a variety of international banks in Panama through which we open corporate accounts for our clients. However, we mainly open corporate accounts for our clients through our primary correspondent banks, with whom we have excellent working relationships.

All of our clients are handled by the Private Banking Departments of our primary correspondent banks. A bilingual, English and Spanish speaking Private Banking Official is assigned to each account, and our client is provided with that persons contact information for direct communication for executing banking transactions.

The banks in Panama offer very attractive interest rates*. Our primary correspondent banks offer up to 6.5% annual interest on USD savings accounts, and up to 8.5% annual interest on USD time deposits (Certificates of Deposit).

*Quoted rates on checking and savings accounts may; change without notice, vary depending on the LIBOR (London InterBank Offering Rate), be subject to minimum deposits and/or minimum balance requirements and/or certain terms for CD's.

Online Banking:

Internet access to your corporate bank account is offered through our primary correspondent banks, as well as through most of the other banks in Panama. Panamanian banks use the most up to date online security technology so your banking information is 100% secure and confidential.

Our primary correspondent banks offer secured credit cards (Visa or MasterCard). Our firm charges a processing fee of US$100 for assisting in setting up of secured credit cards.

Secured credit cards require that the client place a security deposit in an amount equal to 150% of the credit limit chosen for their credit card. The security deposit is frozen in the corporate bank account (or CD/time deposit) until the card is closed, although the funds still earn interest while in the security deposit. As the credit card is used, the bank will automatically debit the entire monthly balance of the credit card charges from the remaining corporate bank account balance at the end of the monthly credit card billing cycle.

Annual fees for credit cards start at US$50 or more according to the type of credit card chosen. Silver, Gold, Platinum, and Airline miles credit cards are available for earning airline flight miles for credit card usage. American Express is also available through certain banks.

Debit cards are offered for corporate bank accounts through one of our correspondent banks in Panama. Debit cards have the "Clave" symbol on them, and can be used at any point of sale or ATM that accepts "Plus" or "Interlink" cards (accepted world-wide). The banks annual fees for debit cards are US$15. There are no per transaction fees for ATM cash withdrawals, although there may be fees associated with point of sale transactions, depending on the merchant you purchase from.

Most banks in Panama offer time deposits (certificates of deposits, or "CD's"), which are referred to as "Plazo Fijo", in Spanish. Each banks rates vary according to their banking regulations, business practices, etc. Under Panamanian law, the minimum amount for a time deposit at a Panamanian bank is US$10,000. Some of our correspondent banks offer up to 8.5% annual interest on USD time deposits (Certificates of Deposit).

*Please note that for deposit amounts over US$500,000.00, we are able to negotiate special deposit rates, depending on the amount and term. We generally charge a small one time commission (percentage fee) for negotiating special rates for our clients.

Savings Accounts:

Through our primary correspondent bank, Savings Accounts available. Interest rates vary depending on the deposited amount.

Checking Accounts:

Through our primary correspondent bank, there are two types of Checking Accounts available:

A. International Checking: This account is useful for those who need an offshore bank account with internationally accepted USD checking facilities. The checks from this account are accepted around the globe.

B. Local Checking: This account is useful for those who wish to operate an actual business within Panama, and need an account for making USD payments to any local person or business in Panama. However, the checks from this account are only valid for deposit or compensation locally within the Republic of Panama.

*Fees are subject to change without prior notice. We do not guarantee the accuracy of the above published fees.

** Acceptable deposits are USD cash, USD Checks (personal or bank certified checks), or wire transfers. Unacceptable deposits are money orders, travelers checks, double endorsed checks, foreign items/thrift withdrawal orders, returned checks, and checks referring to more than one account number.

A. Photocopy of passport for each signatory. The photocopy of passport should be Notarized, and must include the photo of the person, the personal details (passport number, etc.), the signature, and the most recent entry/exit stamps (if any). The photocopy should be clear and legible.

B. Two (2) Financial Reference Letters. The financial reference letters can be from any banks, brokerage firms, or credit unions. The letter should be on the financial institutions letterhead, and should include the signature of an official, and the contact information (address, telephone, fax, email, etc.). There is no specific format that the reference letter must be written in.

C. Two (2) Professional or Commercial Reference Letters. These reference letters can be from your attorneys, accountants, financial consultants, or any company(s) that you have a business relationship with. The letters should be on the professionals (or company's) letterhead and should include the signature of the professional (or company representative), plus their contact information (address, telephone, email, etc.). There is no specific format that the reference letters must be written in.

D. Company Profile Letter. The company profile should explain the general business activities of the company including: type of business activity, regions/jurisdictions of business activity, main business partners names, general purpose of the bank account, expected average balance, expected average monthly turnover (in USD), general banking services required or expected for the near future, and any specific requests.

E. Signed Account Applications. If you wish to be the signatory on the account, then you must sign the original bank account applications. As account signatory, you will have the power to execute all types of banking functions with your corporate account.

* Documentation requirements are subject to change without notice.
** Banks other than our primary correspondent bank may require other documentation.

For those clients that prefer to remain 100% anonymous without revealing their personal names to the bank, we offer nominee signatory services for additional confidentiality. In this case, we will provide one of our nominee directors as signatory for your corporate account. When you need to execute a transaction through your corporate account, you simply contact us with your request, and we will process it for you. We charge a US$1000 (or 1%, which ever is higher) annual administration fee for nominee signatory services.

Below we have included bank account set up procedures for our primary correspondent bank (Please note that set up procedures may be different if dealing with other banks):

A. Submit an Online Application - Click on "Order Now", and complete an online application, then hit "submit".

B. Submit Payment - Payment can be made by Bank Wire Transfer, Western Union Money Transfer, E-Gold, USD Check, or USD International Money Order.

C. Receive Documents - Once we receive payment, we will forward you the corporate documents and account applications for your signature (account applications are only included if you wish to be signatory on the account). You should sign the account applications where indicated, and forward them back to us along with the required documentation.

D. Account is Set Up - When we receive the signed applications, the account applications will be completed with the corporate information, and forwarded to the bank. The account number will generally be provided within 7 to 10 business days from the date the documents are submitted to the bank.

E. Begin Using Account - Once we receive the account number, we will send you the complete account protocol for making deposits, executing wire transfers, contact information of the bank, etc.

Panama offshore bank account

Who's name is on the bank account?

I understand I am just a signatory on the bank account and the bearer share corporation owns the money but I still want to know who can find out I sign on the bank account and how?

Under what circumstances will a Panama court allow banking secrecy protection to be lifted?

What about MLAT (Mutual Legal Assistance Treaty)?

What about Tax Treaties?