Money
Banking and money in Panama
Panama uses the US dollar as its everyday currency, alongside its own balboa coins, so there's no exchange rate to worry about if you earn in US dollars. Opening a local bank account is slower than most people expect: banks usually want reference letters, proof of income and an in-person visit, so start early and keep your home-country accounts open.
Currency
The US dollar is legal tender in Panama. The Panamanian balboa is pegged one-to-one to the dollar and exists mainly as coins, which you'll get in change alongside US coins. Cards are widely accepted in Panama City; cash is still king in small towns and at markets.
Opening a bank account as a foreigner
Panamanian banks follow strict know-your-customer rules. Expect to provide:
- Your passport and a second form of ID
- A reference letter from your current bank, and sometimes a professional reference
- Proof of income or the source of your funds
- Proof of address
Requirements vary by bank and change over time. US citizens may find some banks more cautious because of US reporting rules. Many people find the process easier once they have residency, or with an introduction from their lawyer.
Moving money to Panama
A traditional international wire works, but bank fees and exchange margins (if you're converting from Canadian dollars, pounds or euros) add up. Specialist currency transfer services often offer better rates for larger amounts, such as a property purchase or a residency deposit. Compare the total cost, not just the fee.
Tax basics
Panama uses a territorial tax system: in general, it taxes income earned in Panama, not income from abroad. That doesn't remove obligations at home. US citizens, for example, are taxed on worldwide income wherever they live, and other countries have their own residency rules. Speak to a tax adviser who understands both countries before you move.
Common questions
What currency does Panama use?
The US dollar. Panama's own currency, the balboa, is pegged one-to-one to the dollar and is used mainly as coins.
Can a foreigner open a bank account in Panama?
Yes, but expect to provide reference letters, proof of income or source of funds and proof of address, and usually to visit in person. It often takes several weeks.
Does Panama tax foreign income?
Panama generally taxes only income earned in Panama. Your home country may still tax you, so get advice from a tax professional who knows both systems.
Planning a move? Start with the checklist.
A free, month-by-month timeline from twelve months out to your first week in Panama.