mycrew

Hi All,
I am new to this site and I hope it will be of value in my efforts to eventually move and live in Panama.
As states we are eventually going to move there so we want to buy some property first. We are planning a trip back in a couple of weeks and we are looking to open a (personal) bank account there.
One thing we are running into is the the banks are looking for local contact information. Since we do not live there we have none.

-Does anyone have experience in US citizens opening bank accounts in Panama?
-We are looking at Banistmo. Does anyone have suggestions on a better bank that has ablility to extend mortgages to non-Panamanians?
-Bank is looking for bank reference letter. Does this need to be notorized?

Any forsight would be appreciated to make the easier.

Thanks in advance.

kale

Hi,

You can use a lawyer for that, or one of the virtual office services.

I'm not a US citizen so I have no firsthand experience. But I heard of US citizens that have opened accounts with several banks without a problem.

Banistmo is owned by HSBC now. The last time I checked, Banistmo required a reference from an existing Banistmo client if you want to open an account with them as a foreigner. That might have changed though.

Credicorp Bank used to advertise at the airport that they offer mortgages for foreigners. But generally, it's a big hassle. To give you an idea, you'll need an original utility bill showing your US address, two bank references, two professional references, a credit report from the US, a copy of bank statements covering the past 2 years, tax returns or audited financial statements (also 2 years), and finally an independent appraisal of the property. And even then the bank will only finance up to 70% of the purchase price.

If you buy a new property, sometimes the developer can introduce you to a smaller bank that he knows personally and that may be more flexible. But generally, getting a loan in the US and then use the money to buy the property outright should make things much easier.

No, but it has to be an original. Most banks also require that it be addressed directly to the bank, instead of "To whom it may concern". Also, it is entirely possible that the bank will call your bank to verify the reference. Finally, most banks I'm aware of ask for two bank references from foreigners (from different banks), so you could get two just to be on the safe side.

Hope this helps.

tarzan95959

I would rethink that idea if I were you and I have lived part time in Panama for 6 years . GET A good LAWYER FIRST . You might want to look at a U.S.1040 tax form too. There is now a check box in that form to state if you have a out of country bank account . You don't check it and get caught ,you don't even want to know whats going to happen.
I use a Property Managment company , My Lawyer and my Visa Credit card to pay bills in Panama . I just wire funds to them as needed . Nice and Legal and My local Bank in the States has a letter from me stating the funds wired to Panama are used to pay house maintance cost . If the US goverment looks into my wire tranfers the bank can show them the letter . Just about everywhere in Panama they now take Visa so there is no need to walk around with a big wad of cash in your pocket .
I could talk for hours about this thread's questions ,but if you need more free "hands on" personal experience advice ,Email me .

coolandhot

If most places in Panama take Visa than can I use my Visa Debit Card in Panama, even though it is from a U.S. bank? Are there extra fees for using a foreign credit card?

tarzan95959

I really don't have that answer for you as I just use my card as a credit card .I do not pay any fee for using it in Panama . I do not see why you could not use it as a debit card as there are ATM"S all over the place.

Lalaguayaba

Please check with your bank/debit card provider, and cc issuer to determine whether or not you will be assessed international fees; some firms levy hefty fines on int'l usage, many don't...this is time to pull out the magnifying glass and read the fine print.
____________
As far as opening an account, Kale has it down correctly...it's a pain to get done, but nice to have if you have non-tourist visa status. I did not use any American paper work, i.e. tax statements, etc. to verify my bank account. I just don't like the idea of any personal information being floated around. My account history in Europe (where personal letters of reference are more common) was used to open an account.
Even though I would never advise someone to avoid paying U.S. taxes, the less the government knows, the better; as long as the countries that you bank in follow tight secrecy laws there is no way that B.B. is going to find out that you have an offshore account due to an unchecked box on the 1040.
Tarzan's advice is perfect if you don't live there full-time, if you spend the winters in Panama, por ejemplo. But if you choose to take any resident visa status, having a local bank account is a superb idea.

Cheers!

themark

I hope to be able to get a bank account in Panama. How much do the banks usually require you to deposit to open a bank account?

Lalaguayaba

Initial deposit amounts differ by bank, by visa type and personal financial circumstances. I'm sure that five different ppl on this site have five different stories about the origin of their Panamanian bank accounts.

Cheers.

coolandhot

Honestly, if you do not think you have enough to make an initial deposit, then you probably do not need a bank account. It doesn't make sense to go through all the trouble of getting a bank account to hold a little bit of cash that is so small even the bank doesn't want it.

Beyond that, Lalaguayaba's right that each bank differs.

mycrew

Hi all thanks for the feedback.

The reason for opening a bank account is not to hide money from the US. It seem appropriate to do so in preparation to obtain financing for a house or property in Panama. From speaking with some banks there it is required to have a minimum amount of money in the bank in which to make the mortgage payments pay, the bills and so forth. I am trying to get an overall picture of the whole banking then getting a mortgage process.
My plan is to buy either a piece of property somewhere and later on down the line build on it or buy a house now and use it as rental.
Having it financed in the US is not an option nor is second mortgage.

Thanks

coolandhot

Why can't you get in financed in the US or by a US bank?

Lalaguayaba

That is a personal financial question to Mycrew, and one that I'm sure they don't want to answer.
Please don't be rude.

In response to the thought of 'hiding money,' well, that's just naive. Not checking the 1040 box regarding foreign property holding is more so the I.R.S. can tax your foreign-earned income that anything else. They seem to consider the ownership of foreign property an automatic prerequisite to money laundering and drug-running, vs. rental income, which is just outrageous. So, if you live in the U.S. (or don't--but you are still a citizen, and must pay taxes, perhaps even double taxes on your foreign-earned income) and have a foreign bank account, it shouldn't generally be considered 'hiding,' but rather a form of estate planning. Of course, this is just semantics, which your lawyer will be well versed in when they help you set up your foreign corporation (a good way to reduce taxes and ease administration of held properties.)

Cheers.

themark

If a corporation, that you own, owns a property, will that count on your taxes?

Lalaguayaba

If you receive personal income from said corporation, then yes--it should. But if you choose NOT to take the income as a personal profit, and instead use said profit to invest further, it gets more complicated. The main questions are whether you feel the need to pay U.S. taxes on profit earned from a foreign-based and foreign-held corporation--if you feel the overwhelming need to pay the IRS, then by all means count it as personal income; otherwise there are completely legal means to allow you to utilize this profit without it ever actually being considered foreign-earned income.
Corporate set-ups also differ; L.L.P., L.L.C., straight Inc., etc. Who are your officers? Panamanian citizens, or other foreigners? (Always include a local, it helps a lot) What is the point of the corp? Investment? Development? A tax-shelter?
[Shelters are still legal, they just go by different names; for instance, David Letterman and Scottie Pippen both receive gov't subsides to either NOT farm on their land, or because they ranch animal herds. Do you think they need the money? Heck no, its just a creative method to reduce their tax burden.]
All of these decisions are ones that are made with the help of a good law firm, not a singular lawyer. Be wary of any individual who offers all the bells and whistles associated with incorporation, and the income and tax planning that go into working with a U.S. citizen. I am sure that there are very good attorneys unaffiliated with a firm, but the redundancy offered by large offices is a G-dsend. It just seems to lessen the possibility of a major malfunction.

For visa purposes, a lone lawyer is usually fine, as that is the only type of law that they specialize in, and they are experts; but when the dollar signs grow, and the potential for problems becomes exponential, just cover your a** with a large firm.

Cheers.

tallman33

Going with a law firm will give you more room to trust them. It is much easier for an individual to scam people than a law firm, because the law firm has a reputation to uphold.

Latortura

I have an account wth Hatfield Oak and it is an online banks and that works fine and it also has its own debit card. So far I have had no problems with it and also I can tranfer money to European banks quite cheaply.