Forex Trading Business in Panama

By: Ronald Edwards

Before we start let me say that if you are a consumer playing the Forex this article is not for you but rest assured the Panama Stock Brokerage companies we refer clients to will be able to meet all your Forex trading needs using an online platform or through a live broker. Check here for more information on our stock brokerage accounts with a fully licensed Panama Stock Broker.

Setting up a Forex business in Panama is not easy. It is true that Forex is not licensed in Panama. You can get a Panama Stock Brokerage Firm License but the licensure involves a $400,000 deposit plus other things. This of course gives you the credibility but what you will find is many of the banks in Panama will not open an account for a licensed stock broker. The major problem is getting the bank account where you can receive funds from the clients.

Banking Issues - The first problem is Money IN - Money Out. The preceding phrase describes what is commonly viewed as money laundering. We are talking about say $600,000 coming into the bank account on Wednesday and $550,000 leaving the account on Friday. This is a normal Forex scenario that evolves from a client wiring you funds to invest for them. The funds come in and then you need to invest them right away. It is well known that classical money laundering is tied to illegal activity but the banks around the world do all view money in and money out transactions to be suspicious. The banks in any jurisdiction also worry about the correspondent bank questioning such activities. No bank can operate with international wires without correspondent banks. When you see a bank that provides wiring instructions with its own SWIFT number that SWIFT goes to the correspondent bank. Most banks will not process an international wire without listing a correspondent bank in case they have trouble pushing the wire directly to the SWIFT number. If you are an older established account with substantial residual balances such activities should not be a problem but if the account is new then the bank will become suspicious and ask a lot of questions as to source of funds and the nature of your business. If they then understand you to be a Forex Firm without a license even though a license is not required to be legally compliant, they will generally close your account. The fact that you are unlicensed means you are not regulated and the bank could be sued by some of your clients if there was an allegation of fraud, misuse of funds, churning, etc. The bank weighs the profit made from your account against the liability of a lawsuit and remember the bank has deep pockets so generally the bank will close the account. We did not say the bank will grab or hold your funds. Generally they will return the last wire that tripped the alarm and ask you how you want to receive your remaining funds if any.

Panama Financial Investment Company - We have a solution that will work for some of you smaller operations. We create a Panama Financial Investment Company through which you supply stock certificates to each of your investors. Now you do not have arms length clients, you have people buying shares in this company. Obviously this is only going to work for those of you that have a small customer base. Now the company is investing its own money which removes the liability from the bank. You would be the signatory on the account, receive a resolution from the board of directors to open the account and a general power of attorney. It would be mandatory to have your investors sign waivers and so spell out the relationship and how everything is going to be operated in this document. The financial institution will want to see these documents, also copies of the stock shares etc. Of course all of this must be documented to the bank and we assist with this. Our fee for this is $4995.00

Larger Forex Traders - The above solution is not feasible if you have large numbers of clients. It is possible we can assist in getting you an account with an EU institution going through a Panama Financial Institution, essentially giving you a sub-account wrapping it with Panama Bank Secrecy. There would be a number of variables involved like countries of clients, your country, age of business, volume, capitalization, available references personal and business, etc. The due diligence will be serious. Contact us for further information. Our fee for this would be $4995.00 and would include the formation of the appropriate Panama Corporation.






For more information, please visit:

email at: panamalegal@hush.com

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