Panama vs Bahamas: Which Residency Gives Your Offshore Banking the Freer Swim?

Written by Alex Mérida, Private-Wealth Adviser & BorderPilot contributor

Few topics divide the yacht-deck circle more than the question: “Panama or the Bahamas for my next residency?”
Both countries pair postcard-perfect waters with laws that make balance sheets purr, yet they solve the relocation puzzle in very different ways.
After two decades escorting founders, fund managers and the occasional retired rock guitarist through global paper-trails, I’ve distilled the comparison into five decisive angles:

1. Residency paths and time-lines
2. Banking privacy vs. compliance obligations
3. Tax-residency repercussions back home
4. Lifestyle, cost and airport connectivity
5. Strategic fit for different client profiles

Grab an espresso—this is the concise, numbers-first briefing I give before anyone wires the first retainer.

1. Residency Paths Compared

Panama: immigration as a customer journey

Panama treats residency applications much like it treats canal traffic—structured lanes, predictable tolls, and plenty of pilots to guide the way.

Anecdote: A fintech founder I advised last year cleared the FNV entirely remotely until the final passport-stamping flight. His comment afterward: “Felt like opening a premium credit-card account, just more notarised PDFs.”

Bahamas: residency as a privilege

The Commonwealth of the Bahamas frames residency less as immigration and more as an invitation to the club house.

There’s no retirement-specific scheme—pensioners simply apply under Annual Residence or EPR if they buy.

Speed tip: Applications flagged “GOV/R” (greater than USD 1 m investment) are placed in the fast-lane, often processed in under eight weeks.

Paperwork & “Apostille drag”

Both Panama and the Bahamas are Hague Apostille Convention members. If you’re Canadian or Australian and haven’t navigated apostilles before, skim our primer “How to apostille Canadian documents for EU use”—the same logic applies here.

2. Banking Privacy & Compliance

The global backdrop—CRS, FATCA and de-risking

Since the Common Reporting Standard (CRS) went live, offshore secrecy now resembles a gated community with glass walls. Both Panama and the Bahamas exchange account data automatically with most partner jurisdictions (the U.S. is treated under FATCA).

My rule of thumb: • Privacy today = cautious confidentiality + lawful tax transparency
• Any structure pretending CRS doesn’t exist is a future headache in litigation discovery

Panama’s financial toolkit

1. Dollarised economy—no FX risk opening USD accounts.
2. Bank types
   • General licence (e.g., Banco General)
   • International licence (e.g., CrediCorp Bank) servicing non-residents
3. On-boarding—expect:
   • In-person meeting (post-COVID video calls accepted by two banks I know)
   • Bank reference + source-of-funds dossier (20–30 pages is normal)
4. Privacy quirks
   • Bearer shares banned after 2015, but foundations still popular for estate planning.
   • Resident agent (local lawyer) holds the corporate book; registries are private but accessible to competent authorities.

Compliance grade: B+ (tightened a lot after the “Papers” scandals but still SME-friendly).

Bahamas’ banking allure

1. Sophisticated private-bank cluster—branches of Julius Bär, UBS, and niche family-office boutiques.
2. Multi-currency accounts—USD, EUR, CHF, even BTC custodial services via regulated “Digital Asset Businesses.”
3. On-boarding
   • Almost always in-person for HNWIs; Zoom option rare.
   • Net-worth threshold: some desks want USD 3 m+ investable.
4. Privacy quirks
   • Smart funds and Segregated Accounts Companies seal beneficial-owner registers from public view.
   • Trust law modernised 2020—allows “purpose trusts” with no beneficiaries (handy for philanthropic vehicles).

Compliance grade: A- (OECD white-listed, but U.S. correspondent banks occasionally close local institutions—keep a Plan B).

“Confidentiality is now about who can see, not if they can see.”
— Memo to clients, 2023

3. Tax Residency Implications

Panama: territorial tango

– Income sourced outside Panama = 0% income tax
– Dividends from Panamanian companies to non-residents = 0% withholding
– VAT (ITBMS) 7%; hits local consumption only
– Substance: to be tax resident, you need either 183 days / year or a “centre of vital interests” clause. Many FNV holders avoid becoming tax-resident by limiting days on the ground.

CFC headaches?
– For Canadians, Panamanian passive-income companies often fall under “FAPI” rules—distribute or face accrual taxation.
– Spaniards face the “tax haven black-list” unless their Panamanian company has >50% active revenue.

Bahamas: zero is the new normal

– No income, capital-gains, estate or corporate tax; just property stamp duty (10 % one-off)
– Value-Added Tax 12 %—mainland consumption again
– Tax residency test: 90 days in the Bahamas and less than 183 in any other single country, plus proof of closer connection (lease, utilities). Clients often hit 120 days to stay safe.

Home-country anti-avoidance?
– UK tax residents planning to break domicile still need the £2 m capital contribution and 3-year non-resident rule.
– Germans face Sec. 8 AStG—no automatic CFC but watch “Zwischengesellschaft.” Our comparison with the Balkans digs deeper in “Georgia vs Serbia: best base for low-tax nomads.”

The wildcard: U.S. persons

Both Panama and the Bahamas comply with FATCA Model 1 IGA. Expect W-9s, 30-page account questionnaires and an IRS 90-22 hangover if balances exceed USD 10k aggregate. Residency choice doesn’t remove Form 8938.

4. Lifestyle and Flight Access

Cost of living snapshot (USD monthly for a couple)

Panama wins for value. The Bahamas wins for bragging rights (and hurricane shutters).

Flight connectivity

Panama’s Tocumen (PTY) is the hub of the Americas:
• 88 direct destinations, daily non-stops to Madrid, Amsterdam, Istanbul, São Paulo, LAX, JFK, Toronto.
• Private-jet FBO with hangarage half the Miami cost.

Bahamas’ Lynden Pindling (NAS):
• 24 year-round destinations; seasonal taps to London Heathrow.
• Charter seaplane culture—easy hops to Exuma or Florida.
• Tip: keep a Schengen visa handy; many routes connect via Miami or London.

Safety, schooling and soft factors

Panama
+ Cosmopolitan, 25 % expat population
+ John Hopkins-affiliated Punta Pacifica Hospital
– Traffic equals a Real-Madrid home game, daily
– Humidity flattening your Italian loafers 10 months a year

Bahamas
+ English language, British legal heritage
+ Island-time vibe; crime largely confined to certain Nassau suburbs
– Imported goods markup: saw a USD 19 box of cereal last month
– Hurricane Dorian memory keeps insurance premiums lofty

5. Which Jurisdiction Fits Which Client?

Client personas

1. The Scale-Up Founder (liquidity event in 18 months)
   • Needs fast PR, low cost base, regional HQ.
   • Likely outcome: Panama Qualified Investor, with a Panamanian holding vehicle for LATAM expansion.

2. The Family-Office Patriarch (USD 25 m++ liquid, yacht in Fort Lauderdale)
   • Prioritises Tier-1 private banking, trust structuring, and easy Florida hops.
   • Likely outcome: Bahamas Economic PR, property on Albany or Lyford Cay, plus a Private Trust Company.

3. The Semi-Retired EU National (remote board seats, dividend income)
   • Wants territorial taxation, Schengen proximity not crucial.
   • Likely outcome: Panama FNV, 120 days residency, retain EU health coverage with portable Cigna plan.

4. The Crypto Whale
   • Looks for regulatory clarity on digital assets.
   • Bahamas enjoys a Digital Assets and Registered Exchanges (DARE) Act; Panama still wrestling with vetoed crypto bill.
   • Likely outcome: Bahamas digital-asset business licence + residence card.

Case Studies From My Desk

Case 1 – Panama: Bootstrapped SaaS Exit

• Nationality: Australian
• Timeline: Visa filed Feb 2023, PR granted Oct 2023
• Banking: Opened corporate and personal account at Banistmo; USD 1 m revolving line at 5.9 %.
• Tax: Spent 90 days in Panama, 150 in Colombia (non-resident there). Paid zero personal income tax 2023.
• Pain point: Needed apostilled criminal record within 90-day validity; Australian Federal Police processing almost derailed schedule.

Case 2 – Bahamas: Multi-generational Wealth Shift

• Nationality: U.S. & British dual citizen family
• Timeline: Property purchase USD 3.2 m in Old Fort Bay; EPR granted four months later.
• Banking: Julius Bär Bahamas booked assets; set up Purpose Trust holding Delaware LLC.
• Tax: Children already UK non-dom; patriarch filed 8854 to expatriate U.S. citizenship—yes, the exit tax hit but future gains now zero in Bahamas.
• Pain point: Hurricane insurance USD 48k/year; solved via parametric policy with 30-day payout.

Decision Checklist

Action Steps (Pre-Flight)

1. Build your KYC bundle—passport, utility bill, CV, source-of-funds narrative. Aim for 40 MB of PDFs.
2. Order apostilled police clearance and birth certificate (validity windows: Panama 180 days; Bahamas 6 months).
3. Schedule exploratory Zoom with two lawyers per jurisdiction—compare fixed-fee vs. retainer models.
4. Visit for a week. Tour banks before beaches; first impressions at the teller window usually override glossy brochures.
5. Run a BorderPilot simulation to model 183-day calendars, CFC exposure and exit-tax triggers.

The Bottom Line

Panama is the Swiss Army knife—affordable, versatile, and comfortable to pocket. The Bahamas is the Rolex—pricier, heavy on the wrist, but sends an unmistakable signal at the bar of the Ocean Club.

Which one guards your capital best? Only a data-driven residency plan—calendars, cash-flows, compliance—will tell. Start sketching yours now, free, inside BorderPilot. Your future self (and likely your heirs) will thank you.