Panama Banking has continued to develop over the years due to Panama’s increased political, social and economic stability and established financial services industry. Panama counts about 75 Panama banks, which include state owned, locally registered and international banking institutions (Panama offshore banks).
Panama banks are generally safe due to the strict policies and norms that Panama banks are required to meet, while the regulation of banking activities by all onshore and offshore banks has been secured by the establishment of the Panama Banking Act in 1998. The Panama Banking Act is a decree adopted by the President and Cabinet Council of Panama whereby the necessary reformations for Panama’s banking system were implemented and the Panama Banking Superintendence was formed as the main regulatory body for banking activities in Panama.
The creation of the Panama Banking Superintendence was a one of the major factors that contributed to the growth of banking in Panama. The Panama Banking Superintendence was established as a state owned self governing body with legal personality and the right to its own property, administer its funds which are separate and independent of the Central Government, approves its budget which is integrated into the national budget and employs, dismisses, names and pays its personnel. The Superintendence is supervised by the General Comptroller of Panama, though this supervision in no way should seek to interfere with the Superintendence administration. The Superintendence is liable to meeting its social security payments, insurance for education, professional risks, public services fees and import duties but is exempt from the payment of taxes, rights, charges and municipal contributions or tributes.
The Superintendence is responsible for ensuring the upkeep of the Panama banking system’s regulations, policies and efficiency, strengthen and promote conditions that would continue to develop Panama’s international financial center, win the public’s confidence and ensure that the solvency and liquidity ratios of Panama banking institutions functioning within and outside of Panama are in compliance with Panama’s banking policies, carry out the necessary sanctions for violation of the Banking Act and ensure that all Panama banking institutions adhere to both local and international banking standards in their day to day operations. The Panama bank act also regulates matters dealing with the Board of Directors of the Superintendence, establishes the prerequisites, duties and term of Directors and the Superintendent.
Panama Banks with general licenses, international licenses and representation licenses pay a banking regulation and supervision fee of 30,000, 15,000 and 5, 0000 respectively. One balboa is equivalent to USD 1.00, making these amounts the same in US currency.
Authorization to conduct banking activities within Panama or internationally, such as in the case of Panama Offshore Corporations, is granted by the Superintendence. Panama grants three (3) main types of licenses, namely, general, international and representation licenses. A General License allows Panama banking institutions to conduct banking activities both within Panama and make transactions outside of Panama. International licenses are granted for conducting business internationally from an established office based in Panama. Representation Licenses allow for the establishment of one or more Representation Offices in Panama. The banking activities carried out by Panama banks are authorized by the Superintendence.
The financial services sector in Panama is modern and one of the most successful in Latin America, with over 85 banks from over 35 countries established in Panama only. It is a secure offshore center and its economy is well driven. In fact the Panama stock exchange is one of the fastest growing.
Due to the success of Panama financial center, there are umpteen investment opportunities banking investments, capitalization financing, insurance and reinsurance.
Between 2000 and 2003, over seven laws were implemented with the objectives of dealing with money laundering and terrorism financing, for public and private Panama banking.