News from Panama…May 2015

[COUNTRY EXPERT- JESSICA RAMESCH]

Ahoy Panama Insiders!

In the May edition of your Panama Insider monthly missive (heading to your inboxes via email as I write this), we mentioned we’d be posting an informative Q&A right here on the forum. Below you’ll find some of the questions we get the most, along with answers from me, IL Panama Editor Jessica Ramesch, and Linda Card, our Chiriqui Correspondent. Your comments, questions, and feedback are always appreciated, so don’t hesitate to post your thoughts in this thread.

Happy reading!

Jessica Ramesch
Your Panama Editor

Do you have a bank account? If so, was it difficult to get? Do people write checks? Are there debit cards?

Linda: Yes, no, yes, and yes. One of the first things we did when we moved here in 2009 was open a bank account. It’s not difficult, but banks are far more conservative here than up north and opening an account is done by a process of application. Banks require lots of documents, such as tax returns, proof of income, and sometimes proof of residence. When applying for your residence visa, I suggest you talk to your attorney about opening a bank account as it may be easier to do so through them.

I write checks to pay monthly bills and debit cards are also widely used. Most working Panamanians are paid fortnightly by direct deposit to their bank account, and they use debit cards to get cash throughout the month. So ATMs are very common, except in remote areas.

Jessica: Very good question. These days, banks in Panama are probably equally as welcoming to foreigners as they were before we ever heard about FATCA (Foreign Account Tax Compliance Act).

Over the past decade, Panama was pressured to sign Tax Information Exchange Agreements (TIEAs) with the U.S. and many other countries by organizations like the OECD (Organization for Economic Co-operation and Development), which have similarly pressured other countries. Over the past few years, the world’s traditional tax havens have all signed multiple Tax Information Exchange Agreements (TIEAs). Anyone who doesn’t have established credit, or a track record here, is going to be vetted more carefully than a local who has worked here their entire life.

That said, anyone willing to do the paperwork can get an account. All it takes it patience. Banks that are welcoming to foreigners include Scotiabank, Global Bank, and Bac Credomatic.

If you have a Panama attorney (for example, an attorney helping you obtain Panama residence), then they should be able to help you with connections or a recommendation.

Banks here are highly sought after, so rather than chasing after clients, they tend to be careful to vet potential customers in order to ensure their funds and interest in Panama are legitimate. Bankers are required by law to meet the client in person.

Bottom line, it isn’t difficult to open a bank account here once you’ve applied for residence. I think it just surprises people from the States that it cannot be done in a day or so. It takes time and a few visits to the bank. But how hard is it to pop into the bank? Easy, really.

Yes, banking or doing business in Latin America requires some patience…and understanding that different countries have different ways of doing things.

A good thing to keep in mind is that Panama is under a lot of pressure to keep banking transparent. Panama’s banking superintendency has high standards (which is how Panama came to be one of the region’s most important international banking hubs).

Can you get a cell phone plan by the month with unlimited talk, text, and data?

Linda: Yes. Cell and smart phones are ubiquitous and more common than fixed lines in homes. My husband and I each have a basic cell phone and we use prepaid cards. There are several cell/smart phone providers here and they are competitive, offering a variety of monthly and pay-as-you-go plans. Some have more complete coverage than others and it pays to shop around.

Jessica: You can do this on the cheap with $20 cell phones and pay-as-you-go plans. Or you can sign up for a contract—sometimes the better option for heavy use—which usually includes a free smart phone every so often. Local providers Movistar, Digicel, Claro, and Cable & Wireless are always competing to offer better deals, so check out all four before you decide. Take your area into account. For example, I use Movistar, known for having excellent nationwide coverage. But if I lived in the mountain town of Sora, I’d switch to Cable & Wireless, as it has the best coverage there.

We don’t expect to need our own car starting out and are satisfied with the public transit to get around David. But can we rent a car for a trip, or to transport large purchases, or furniture? Or are there delivery services for this?

Linda: Yes, there are several car rental agencies in David…and most other towns in Panama. Some furniture and appliance stores will deliver, but not all. But never fear…there are moving companies and delivery services in Panama to meet every need.

[Author]

Posts