Panama signed another Tax Information Exchange Agreement (TIEA) the other week. So what does this mean? Panama has signed several of these in the past. According to lawmakers such as US Senator Carl Levin, the previous agreements were not sufficient and Panama needs to achieve further transparency.

Panama is desperately awaiting US approval of the Free Trade Agreement signed by the two countries in 2007 and will therefore agree to pretty much anything requested by the US. Year after year Panama has expected the agreement to be approved, but President Obama has yet to submit the treaty to Congress. While the Free Trade Agreement is a huge deal in Panama, it is less of a priority in the US. While US exports to Panama are not insignificant at USD 4 Billion, the US exports more to China in three weeks than it does to Panama in a year.

I have seen reports by some offshore incorporators dismissing the new TIEA as irrelevant as long as you have “compliant offshore structures”. What they typically mean is that you should engage their services to form several layers of legal structures, such as bearer share corporations owned by private interest foundations.  The reality is that nobody, and much less an American, should ever consider “hiding” untaxed money in a Panamanian bank. The bank secrecy was always a cosmetic feature in Panama. If a Panamanian bank has a slightest indication that you might be under investigation of any kind, including for tax evasion, they are likely to freeze your assets first and ask questions later, even though tax evasion is not even currently a crime in Panama.  Anyone touting Panama as a replacement for Switzerland has been watching the wrong movies.

It should also be considered that any US person who holds an account outside the US with a balance above USD 10,000.00 at any given time is required to file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS. It does not matter how many legal structures one would put between the US person and the account ownership. The bank will always require identification of the final beneficial owner. FBAR reporting applies even you would assign nominee directors, shareholders, signatories and all the rest. Any type of control or access to the funds will subject you to the FBAR reporting requirement.  Any attempt to conceal the ownership of funds may very well lead to accusations of money laundering even if the closest you ever got to money laundering was forgetting a five dollar bill in your pants before washing them.

Accounts subject to FBAR reporting include bank accounts, brokerage accounts, mutual fund holdings, trust accounts and any other type of non-US financial accounts. Failing to file FBARs can be a criminal offence subject to fines of up to $500,000 and prison terms of up to ten years. In civil FBAR cases each non-willful FBAR violation draws a $10,000 fine and each willful violation the greater of $100,000 or 50% of the amount in the account. Each year you failed to file counts as a separate violation.

The FBAR reporting requirement is of course not in any way specific to bank accounts in Panama, but reading about offshore providers dismissing the Panama-US TIEA made me think it was time to remind about this rather relevant requirement.

Michael Magnusson is a contributor on Bankers Press and author of several books including the International Bestseller “The Land Without A Banking Law – How to Start a Bank with a Thousand Dollars”. Visit for further information and book descriptions.


New Zealand is generally perceived as a high tax country and consequently has not been a target in the international campaign against offshore tax havens. However, New Zealand offers secretive zero tax structures for offshore activities and perhaps even more remarkable, the legal framework allows for virtually anyone to start a bank without being subject to any capital or qualification requirements. (more…)


Offshore Tax Havens still issue International Banking Licenses
and capital requirements start as low as $25,000.00 for a restricted license issued in a highly respected financial centre.

Regulatory changes during the past few years have left only a few jurisdictions which still issue licenses for new bank startups. Some countries have stopped accepting new applications altogether while others have decided to issue licenses only to branches of internationally established banks. The few jurisdictions which do in fact welcome new private bank startups offer very reasonable qualification and capital requirements.  Minimum capital requirements start as low as $25K for a restricted Class B Banking License and from $250K for an unrestricted international license. Please visit for further details.


Banks4Sale.Com  has launched a listing service for Onshore and Offshore Banks for Sale. Visit


Banking4Bankers just added a new interesting feature on their website. You can now request a Custom Proposal document describing the “Bank in a Box” concept based on your specific needs and conditions. You fill out a short form describing your anticipated financial activities, the type of customers you are planning to serve and their general geographical location. After submitting the form you will receive a Custom Proposal document describing all the different components of the “Bank in a Box” concept offered by Banking4Bankers such as the Online Banking Software, Card Issuing, Correspondent Banking, Offshore Legal Entity etc. Please visit for further details.


Auckland Skyline

The Financial Service Provider Register (FSPR) has registered 7,900 Financial Service Providers (FSPs) since the opening of the Register in August 2010. Any person or entity offering financial services in or from New Zealand must be registered in the FSPR. (more…)


How to Connect to SWIFT

SWIFT has made it easy to connect to its messaging platform by introducing SWIFT Alliance Lite. You can now become a SWIFT member without any setup fees and at a monthly cost as low as EUR 200.00.

What is SWIFT?

SWIFT or the Society for Worldwide Interbank Financial Telecommunications is an international banking transaction organization with its headquarters in Belgium. Besides the headquarters, the branch offices of SWIFT are located in all major financial centers around the world. SWIFT defines itself as a ‘member-owned’ co-operative that provides the financial world to secure its business transactions with ‘speed’ certainty and confidence’. (more…)


Swedish Trust Companies – Sophisticated Asset Management

Panama City – Panama (Bankers Press) March 18, 2010 — Overseas Clearing Corporation (OCC), the leader in offshore financial company formation and online banking software systems recently announced the availability of its new turn-key EU Trust Company package. (more…)