It’s true to say that Panama has attracted its fair share of negative headlines over the years, including in terms of its business and banking sectors.
Though in 2016, the Financial Action Task Force (FATF) removed Panama from its list of high-risk countries, the country was, in early 2021, added to the European Union’s (EU) tax havens blacklist for its failure to implement economic substance requirements.
While Panama has a track record of promising to improve banking standards, but not following through on these promises, it is nonetheless a signatory to the Common Reporting Standard global banking information exchange system, as well as Foreign Account Tax Compliance Act reporting protocols. For some multinational Clients, such as an existing one I recently helped open a Panamanian corporate bank account for, these are important steps.
Our Client wanted to open an international corporate bank account for their existing Singapore company. The Singapore company provides expertise in consulting services for merchant and payment services. In addition to Singapore, the Client has businesses in the UK, as well as other parts of Asia and Europe.
The Client’s plan was to expand the business and to do so, they wanted us to secure multiple corporate bank accounts for their Singapore company.
As with any corporate bank account application that we handle, our first objective was to prepare a quality business plan. This always includes information such as the company’s activities, financial information, details on customers and suppliers and the jurisdictions in which the business operates. Once the plan had been finalised and signed off by the Client, we approached multiple banks in all the jurisdictions in which our Client would have customers, suppliers and intended business activities. Our team then provided a list of banks, that had provided preliminary confirmation of interest, to our Client.
One of these was a Panamanian bank. The Client liked the bank’s excellent online banking facilities, as well as the fact that it offered a multicurrency account.
It took about one week from the date of submitting the business plan for the Panamanian bank to complete the initial screening process for our Client. This included a request for basic due diligence documents from the directors, shareholders and bank signatories. Once that had been submitted and verified, the bank provided account opening forms, and we assisted our Client to pre-fill them. Once again, these were reviewed and signed off by the Client, and we submitted the entire account opening package to the bank.
From there, it took almost two weeks for the Panamanian bank’s internal compliance team to thoroughly review the application and complete the background and verification checks for all directors, shareholders and bank signatories. Following which, we managed to secure the account numbers. The bank officers then conducted a video conference with the beneficial owner of the business for verification purposes. This is a really important step: our Client was not required to travel to Panama to meet the bank in person. Following the video, the bank couriered the e-banking tokens to our Client’s place of residence. And the engagement was complete.
On the face of it, this was a simple engagement – opening a corporate bank account for an existing company. But these are anything but simple times. Where our Panamanian bank was happy for the Client not to travel to meet them, other banks in other jurisdictions were less accommodating and flatly denied the opportunity.
From this engagement, I learned the importance of maintaining an inventory of banks that revised their onboarding strategies based on current travel restrictions. By staying up to date on latest bank policies around travel, we can offer the most precise solutions to Clients and, crucially, save their time. Our Singapore Client was certainly grateful for this approach.
Read more about banking in Panama on our detailed webpage here.