A Modern Tale of Banking in Panama

May 9, 2017              

When I arrived in Panama, I simply wanted to fix my Banvivienda account so that the annual fees for maintaining my business entity could be paid from the account. As usual, the plan morphed into something else. My friend suggested that it might be better to move the business account from Banvivienda to Tower Bank and not use a checking account (since I don’t write checks against the account anyway).

I needed a bank reference letter to open the new business savings account at Tower Bank. That required a visit to Banvivienda. While there, I decided to pull out $10,000 from the business account to move it to Tower Bank. I was being charged $10.70/month to have the business checking account at Banvivienda…I was throwing money away.

Paying to Withdraw Money from the Account

Since I didn’t have any checks for the account, I had to speak to a customer service representative and request a bank check, which I took to the teller to pull out the cash. At the same time, I requested the bank reference letter. I was told it would be a few days before it would be ready. The bank check cost me $15.

My friend needed to go to the bank on a particular day the next week, so I held the cash until then.  When I went back to Banvivienda to try to close my business account and extract the rest of the cash, they surprised me by requiring  a letter from the President and Secretary of my company requesting the closure of the account.

It’s Not Easy to Close a Business Account

At the time, I thought the President and the Secretary of my company in Panama were people in my attorney’s office. So, I needed to request the letter from my attorney. That is the way the company was originally set up. To further complicate matters, a digital version of the letter via email would not work. The original letter had to be given to Banvivienda.

Being creative and seeking to avoid the need for a letter from the company, I asked Banvivienda about shifting all the money from the checking account to my personal account, which is a savings account. Then, they wouldn’t be able to extract $10.70/month from the account. The customer service rep told me that the account would then go negative and the bank would continue to pursue me to collect the money. Scratch that idea.

Time was running out; I only had 3 more days in Panama and I had doubts about getting this all done while there. I was going to have to bite the bullet and let them extract $10.70/month from my account until I could return and get the letter from my attorney. On the bright side, the reference letter to open the new account at Tower Bank was ready.

Opening a Business Account at Tower Bank

We left Banvivienda and went to Tower Bank to start the process of opening the business savings account there. My primary banker at Tower Bank was on vacation so we were directed to another banker whose English was not as good as my primary banker.

My friend advised me that I would be required to provide the articles of organization to Tower Bank so I sent them to the banker, who, unknown to me at that time, was on vacation. When I found out she was on vacation, I didn’t have my PC with me so I had to figure out, on the spot, how to send the document from my phone to the banker who we were now talking to. I got it done!

She happily received the reference letter from Banvivienda. She then said the President and the Secretary of the company would need to come in to fill out a bunch of forms! We told her we would wait and talk to my primary banker when she returned to the office Thursday. We were hopeful that I could simply get a letter from my attorney giving me the authority to fill out the forms for the account.

That’s as far as we got with that task on that day.

It’s Hard to Make a $10,000 Deposit in Cash These Days

Then there’s the matter of the $10K I withdrew from Banvivienda the previous week. I wanted to deposit it in Tower Bank before leaving Panama. It would have been nice to put it in the business account, but the account takes a while to open so it would not be open before departing. Therefore, I filled out a deposit slip to put it into my personal account with Tower Bank.

The bank clerk paused while looking at the computer screen. She walked away to talk to someone and came back. A banker came over and asked where the money had come from. I said I withdrew it from another bank in Panama. She asked for the receipt and I said I did not have it with me. I explained that I had withdrawn the money before the weekend and the receipt was at home.

She then made some phone calls and was able to process my deposit. She pointed out that I had a limit set of $400/month for the maximum amount I could deposit into the account per month. We later asked our primary banker if we could change the limit and were told that it’s based on my income. That amount doesn’t make sense based on my income, but my primary banker is going to look into raising it.

Success! The Business Account at Banvivienda is Closed

I sent an email to the attorney who set up my business in Panama and is the resident agent for it, explaining my dilemma. About 28 hours later, he responded with a letter from the directors (him and some other staff at his office) directing Banvivienda to close the account. It turns out I am the President and Secretary of the business so I was the one who needed to sign the letter.

I filled in the bank account number in the letter and printed it. I also printed a copy of a registry document my attorney had sent showing that I am the president and secretary of my company. This must have been the change that was made to the business when I was applying for residency.

I brought the letter and document to Banvivienda. The customer service rep had me sign the letter and she closed the account. I had already moved all the money out of the account into the personal account earlier that day.

I took another copy of the registry document to Tower Bank so that I would be able to fill out the forms for opening the business account there. This was on Thursday, and my primary banker was back from vacation.

A Savings Account to Earn Higher Interest at Tower Bank

My friend remembered that there is a type of account that you can open with $10,000 which will earn a higher interest rate. She thought that was a business account. We asked about it and learned that it was a special personal savings account that would pay the higher rate and you had to bring in new money to get the higher rate. My banker said the $10,000 I had deposited two days earlier would count as new money. Whew! She opened the account and moved the money over.

Opening the Business Account at Tower Bank

Next, it was time to start the process of opening the business savings account. I had some trouble figuring out how to fill out the forms so she just had me sign all the forms and said she would complete them.

Once I had finished with the forms she provided, I recalled that a form had been left out the previous year when I opened my first account at Tower Bank. I mentioned that, and told her it was a form related to FATCA. I had to send the original completed and signed form back to them last year, which costs money. I didn’t want to have to do that again.

She figured out what form I was talking about and brought a copy for me to fill out and sign. I have high hopes that there won’t be any delays in opening this account. I was told that a business account generally takes about 15 days to open.

The $10,000 Deposit Comes Back to Haunt Me

Later that afternoon, my friend got a phone call from my primary banker at Tower Bank. It turns out they still needed to see proof of the $10,000 withdrawal from Banvivienda. She said I could scan in the withdrawal receipt and send it via email so we wouldn’t need to make another trip to the bank.

When I got home and looked for the withdrawal slip, I couldn’t find it! I was trying to keep the paper laying around to a minimum. I had thrown away the withdrawal slip. So, I had created another challenge to be overcome.

It was too late to go to Banvivienda that day and I was leaving to return to the U.S. the following afternoon. I tried logging into my account at Banvivienda, but the account had been closed and I could not get a print out of the withdrawal that way. We determined we would go to Banvivienda the following morning as soon as the bank opened and request proof of the withdrawal.

The next morning, we were at Banvivienda 20 minutes after it opened. All my luggage was in the car. The customer service rep was very efficient and printed out a statement showing the withdrawal from the account. She also printed information from the system which showed that I was associated with the account, since it was an account in the name of my business.

We took these documents over to Tower Bank and it wasn’t open yet. I went back to the car to wait.  Spotting  the security guard inside the door, I got out and walked back to the door, intending to give the guard the documents. As I walked up to the door, the other banker who we had worked with to make the $10,000 deposit appeared at the door! I was able to give the proof to her and asked her to give it to my primary banker.

I had succeeded in spite of many obstacles.

Useful Information in Case you Want to Bank in Panama

I want to share this with you because I have not seen anyone else write about banking in Panama at this level of detail.   I believe you need to know this if you intend to open up a bank account there. I learned that every “i” must be dotted and every “t” must be crossed, especially when it comes to depositing a large amount of cash.

You also  must be able to give them an address in Panama to open accounts at Tower Bank. I am very lucky in that I have a very helpful friend who lives in Panama and allows me to use her address and her phone number for this purpose. She was invaluable, driving me to the banks for the countless visits we made. I am truly beholden to her.

I also want to share the name of my attorney with you. I am very pleased with him. He has been very responsive and reliable over the years. He is the attorney who set up my business and is the resident agent for it. His name is Jorge Sanchez and the company he works with is Panama Estate (http://www.panamaestate.com.pa/). I highly recommend him if you need an attorney in Panama to set up a business or assist with a real estate transaction.

I welcome your comments and questions in the comment section under each article.

Yours in prosperity,
Sophia Hilton (A Savvy Woman)


A Modern Tale of Banking in Panama — 2 Comments

  1. Thanks for all the info on your site. I’m considering getting out of Dodge (Illinois) and have been focusing on Panama. I too am looking to diversify investments and minimize political risks and get a second passport/citizenship.

    Did you ever end up investing in the Mango farm? It is of interest to me as an investment that would lead to residency and citizenship in 5 years.

    • Hi Rich,

      Thanks for writing.

      No, I decided against the mango farm in Panama. Since I already have residency in Panama, I was looking at it purely as an investment. I decided that, if something went wrong with the operations of the farm, it would leave me with a piece of land in the middle of nowhere that I paid way too much for. It would make sense if you’re using it to get residency, though, unless you can get it another way. I think you would be better off using the program I used to get residency and it does qualify for citizenship in 5 years. It’s referred to as the “Friendly Nations Visa.”

      I’m currently in Uruguay, for a two-week visit. I looked at small plots of land (about 5 hectares) and am considering investing in something like this in Uruguay. I will be writing about Uruguay in the coming weeks. I’ve learned that it is easy to get residency in Uruguay and if you wait the five years (three if married) to get citizenship, you do not need to renounce your other citizenship. They allow dual citizenship!


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