Panama as an offshore banking center has strong bank secrecy and confidentiality protection laws. An account may be opened in the name of an anonymous corporation with the details kept secret and accessible only to the bank. The third party can get access to client information, if he/she gets an order of Panamian court that is only given out, in case the serious crimes, such as money laundering and drug trafficking are committed. Panama is tries to reduce number of cases client information is given away to sustain an image of an offshore banking center that is devoted to ensuring high levels of confidentiality.
Opening personal bank account is much simpler in Panama than opening a corporate one. However personal offshore banking account has serious disadvantages. Most countries require reporting accounts owned overseas and it is easy to track such account through money transfers in and out of your offshore account that will be labeled under your name. This destroys your attempts to keep the account confidential.
Contrary to personal accounts corporate accounts are shielded by corporate name. In other words, transfers are made from the name of some corporation shareholders of which are unknown.
Panama banks are highly reputable due to conservative and careful lending practices they use. There is no central bank in Panama, therefore there is no moral hazard for banks. They know that if they lend not in a very careful way, they may go bankrupt and there is no one to come and bail them out. In addition, Panama banks do not engage in sub prime mortgage business that makes the system even more stable.
Interest rate on Panama offshore banking deposits is comparable to their onshore counterparts. In some cases interest rates make 7%, while average interest rate is 4.5%. Interest income is tax free in Panama and this make Panama banking even more attractive.
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