Skip to content
Offshore Banking

Which Country is Best for Offshore Banking in Central America?

If you’re looking for an offshore banking jurisdiction, Central America offers two great options in Belize and Panama. Either of these countries is a great choice for offshore banking in Central America. In this article, Craig Dempsey from Biz Latin Hub breaks it down.

Offshore banking in Central America is a popular choice among wealthy individuals around the world. Here at Biz Latin Hub, many of our European and North American clients ask about it.

One of the questions we often get asked, especially by people doing business in Belize or Panama, is which jurisdiction is the best choice. But the reality is, there is no hard and fast answer. The best country to choose to do offshore banking in will depend on your personal situation and which conditions suit you most.

When it comes to offshore banking in Central America, you’re essentially choosing between Belize and Panama. These two countries have the most well-developed offshore banking industries in the region. You’ll find them on most lists of global offshore banking hubs.

But before taking a look at the relative merits of Belize and Panama, it’s worth clarifying what offshore banking is, exactly. Below, we’ll take a look at that, and also note some of the factors that make a particular jurisdiction a good choice for offshore banking.

What is offshore banking?

Offshore banking is essentially holding a bank account in a jurisdiction or country that you don’t live in. Account holders can receive payments, keep money, and establish savings in multiple currencies.

Offshore accounts are particularly useful to anyone with financial interests across different countries, allowing them to better manage their commitments between jurisdictions.

Holding and managing funds through an offshore account can often be a more tax-efficient way of managing your money. They also come with the benefit of generally high levels of security and privacy.

Five things to consider when choosing an offshore banking jurisdiction

Consider the following factors when choosing an offshore banking jurisdiction:

1. Stability

Political and economic stability are both crucial factors to consider when choosing an offshore banking jurisdiction in Central America (or anywhere else).

It’s important to look into the recent history of a country, to know whether it has experienced major political or economic shifts, which could be detrimental to the security of your savings.

2. Privacy

One of the big draws of offshore banking is the privacy it provides.

While all jurisdictions insist on certain levels of reporting, you’ll want to guarantee a maintenance of your confidentiality.

For that reason, it often pays to seek out a provider in a country with a well-established offshore banking regime. They’ll be far more likely to have strong track records of protecting their customers.

3. Communication

Managing your funds may require regular communication with the provider, so you’ll want to ensure you bank in a jurisdiction where this won’t be an issue.

If you’re a native English speaker, Belize offers a key advantage as English is the official language. It’s worth noting, though, that most professionals in Latin America have a good grasp of English.

4. Currencies

Currencies are another feature to take into account. Again, based on how you’re planning to use the account, this can be more or less important.

If, for example, you only plan to hold funds and make transactions in US dollars, Panama stands out because that is the official currency. But if you plan to make payments in multiple currencies, you’ll want to make sure your provider can facilitate any type of transaction you’ll need.

5. Fees

Another element to consider when choosing an offshore bank in Central America is the fees you’ll incur. You want your money to work for you as well as possible, and part of that means not incurring huge fees.

Consider the size of any fees, how and when they’re levied, and the way you want to use your account to work out the best arrangement for you.

Belize or Panama?

Belize and Panama both enjoy the sort of longstanding political and economic stability customers are looking for. Stability is not a concern in either country.

Both also offer high levels of privacy, although any jurisdiction carries some risk. We saw this in recent years with the so-called “Panama Papers” and “Pandora Papers” leaks. But not even the Swiss banking regime – often considered the most secure in the world – can avoid this type of breach. The massive Credit Suisse leak earlier this year demonstrates this.

With communication, offshore banking in Belize comes with the major advantage that English is the native language in that country.

But anyone working in Panama’s offshore banking industry will almost certainly have a high proficiency in English.

For speakers of other languages, a provider who can communicate in your preferred language can be an important factor. This can range between providers in both countries.

When it comes to currencies, anyone seeking to hold funds and carry out transactions in U.S. dollars, or any other major currency, will find their needs met in both countries.

If you’re using less common currencies, it’s important to look into what different providers offer.

The bottom line is, when deciding between Belize and Panama, it boils down to the types of deposits and transactions you’ll engage in.

In a recent interview with us at Biz Latin Hub, Caye International Bank president Luigi Wewege highlighted this point.

Depending on the nature of the investment and the stated purpose for the business venture, one nation may offer slightly more incentives than the other,” he said.

As a banking executive in Belize who also sits on the advisory board of Fort Kobbe International Vaults in Panama, Wewege is in a prime position to comment on the relative benefits of each country’s offshore banking regimes.

Tax obligations was another key factor he raised in the interview.

This is a fine point to consider closely, especially if there is a need for the company to file annual returns. It’s important to be aware of current legislation that would impact benefits, filing update requirements, and other business operation aspects. From time to time, both nations have amended those laws and regulations.

So, when it comes to choosing which jurisdiction is best for offshore banking in Central America, as stated right at the beginning, there’s no one-size-fits-all response.

It boils down to your needs and how you plan to use offshore banking.

One thing is certain, though. With both Belize and Panama offering the security and stability offshore banking customers crave, you’re likely to find what you’re looking for in one of them.

Craig Dempsey is the co-founder and chief executive officer of the Biz Latin Hub Group, an organization dedicated to assisting investors in Latin America and the Caribbean.

Craig Dempsey

Craig Dempsey

Craig Dempsey is the co-founder and chief executive officer of Biz Latin Hub Group, an organization dedicated to assisting investors in Latin America and the Caribbean, including through recruitment and payroll outsourcing. Craig holds a degree in mechanical engineering, a master’s degree in project management, and other certifications covering logistics, personal management and government administration. Craig is an Australian military veteran and has been deployed overseas on numerous occasions. He is also a former mining executive with experience in Australia, Canada, Colombia and Peru.