Panama Financially

The country’s business and political leaders insist its financial system has become a paragon of integrity, and that Panama is being unfairly targeted by rich countries starved of revenue by the recession. “The US is the biggest tax haven in the world,” says Juan David Morgan, a lawyer, noting that America exempts foreigners from levies on interest. “But they want to scapegoat us because we’re visible and have a canal. It’s a double standard.”


Panama is indeed now far removed from its erstwhile financial free-for-all. Its banks are highly regulated. Opening an account requires a week of bureaucratic procedures and a respected watchdog agency monitors large transactions. Panama ranks fourth among 30 countries surveyed by the Financial Action Task Force (a body set up by the Group of Seven countries) in carrying out anti-money-laundering measures. And it taxes domestic economic activity fairly heavily, although it does leave foreign-sourced income untouched.

However, Panama has made no progress on preventing tax evasion by foreigners. To get off the OECD list, a jurisdiction needs 12 active tax-information-exchange treaties.