Constantly Moving Targets
I remind you often that you should take action to set up a flag offshore as soon as an opportunity that interests you to do so presents itself. Wait…and the rules can change, meaning the opportunity can disappear. In today’s offshore arena, the only constant is that everything–policies, requirements, restrictions, etc., to do with banking, establishing residency, obtaining citizenship, figuring tax obligations, structuring the ownership of assets, etc.–is a constantly moving target.
This week one of the banks we’ve been recommending in Panama as a place where foreigners, including Americans, could still open a bank account has changed its policy. Foreigners are still welcome, but only if they have been legal residents in Panama for at least two years. This is the new requirement for opening a personal bank account. A non-resident foreigner can still open a private banking account, but the minimum account balance is US$250,000.
Most banks in Panama require foreigners to be able to show some “connection” to the country before they’ll open a personal account for them (an investment in a piece of real estate, for example, or a residency visa). It’s not a government requirement but a banking one. Unibank had been an exception. Since its opening two years ago, it had not required any such proof of some local connection. That changed this week.
With this single administrative decision, Unibank has moved from one end of the spectrum to the other…from being perhaps the easiest place in Panama for a foreigner to open a bank account to, effectively, dismissing foreign accounts altogether. If you’ve opened an account at another bank (as you’d have to do if you needed one today, not two years from today after you’ve been living in the country long enough to meet Unibank’s requirements), you’re not likely to bother moving it to the bank that originally denied you. So, again, Unibank seems to have decided it no longer cares about having foreign clients.
What about those foreigners who already have accounts at the bank? For now, they are okay. However, I wouldn’t be surprised if Unibank eventually decides to close any account for which the account-holder can’t present a residency card.
Sticking with Panama for examples of recent changes affecting anyone interested in diversifying some aspect of his life here, I told you in May about the new residency permit option set out in an Executive Decree issued that month. That decree was hastily done and didn’t include the U.K. on the list of nationals eligible for the new residency option. Many British citizens wrote in to ask why. The answer was that those drafting the thing had simply forgotten to include the U.K. on the list. Nothing more to it than that.
Is The Panamanian Government Actually Rectifying?
The Panamanian government rectified that oversight with an addendum dated June 13 (about a month after the original decree had been issued) that added both the United Kingdom and South Korea to the list of eligible countries (which now number 24 in total).
Still, the decree leaves a lot to the imagination of Panama’s department of immigration. In other words, a great deal is not specified. That said, the good news is that, if you’re from one of the 24 countries on the list, this new decree is probably the simplest option for obtaining legal residency in this country right now.
And, to return to my point, if that is an agenda item for you, you should move quickly to apply under this decree and process your residency application. There’s no telling when the option, which seemed to land out of the sky, might be reconsidered or recalled. Remember, this is nothing more than an Executive Decree. President Martinelli woke up one morning and decided to issue it. He could change his mind as easily…or, more likely, his successor could.
You never know when or how your options for planting a flag will change. That’s why taking action is critical once you find an option that works for you. Think about any particular opportunity too long, and you take the very real chance that it could be taken off the table.