Panama Merchant Accounts

Panama E-Commerce Merchant Accounts

In today’s world, business is conducted both physically (at a store front), as well as through the internet via E-Commerce. Panama banks offer merchant accounts for both storefronts and e-commerce. Internet merchant accounts facilitate credit card transactions over the internet. If you operate an online business and do e-commerce, and you wish to do it from Panama, there are solutions for you.

We offer introductions to banks that provide online Merchant Account services for those clients who use a Panama Corporation with a Panama Bank Account.

Establishing an Internet e-commerce business in Panama requires the following:

1. Incorporate a Panama corporation. Our fee for the setup of a corporation is US$1,450 which includes all government taxes & fees, and it takes 5 business days.

2. Get a Panama business operations permit. The cost for processing this is US$500, and it takes a few days.

3. Establish a Panama bank account where the proceeds of your online credit card transactions can be deposited into. Our fee for Bank Account Introduction services is $700.

4. Establish your corporation’s Website offering your products or services.

5. Establish an online internet merchant account through our recommended Panama banks or merchant processors. Our fee for the bank introduction and assistance in setting up a merchant account for your business will depend on the time it takes for the entire process, which depends on what type of business you will be operating. Please contact us for a quotation.

Please note that the banks in Panama require that the signatories on the bank and merchant accounts must be residents of Panama, and have an actual business operation in Panama, with a local business operation permit.

NOTICE TO US PERSONS: US persons (citizens or residents of the United States) must report their world-wide income, regardless of whether or not they have residency in Panama or any other jurisdiction. Panama banks will automatically report US persons personal and/or corporate account information to the US tax authorities. US persons cannot use a Panama bank and/or merchant account to operate an otherwise US business without reporting and paying US taxes. If you are a US person, we do not offer Panama merchant account processing assistance, unless you can prove that you are in compliance with US tax reporting.


Internet Merchant Account Processors:

Merchant account processing services are provided by a bank, merchant processor or a third party processor to the merchant. Services include authorization of credit cards, settlement of funds through the bankcard associations, depositing of funds into checking accounts, merchant billing, and account activity reporting.

Panama has a handful of banks that offer merchant account processing services. The one we recommend for you will depend on your particular products, services or business model. Please note that most banks and merchant services providers do not accept certain types of high risk businesses, such as pornography, fire arms / guns or gun accessory sales, online gambling, or sales of addictive substances, etc. The banks in Panama are very conservative, and will require extensive due diligence on your product or service, references, and business practices before approving your account.

Cards & Currencies:
Our recommended Merchant Processors can process all major credit cards.


The merchant processing service functions under the SSL (Secure Socket Layer) system which codifies the information and this security system is one of the most advanced in the market today. It consists of one secure connection between the merchant and the processor, which guarantees that the information is never lost or reproduced to other parties.

For additional security the Merchant Processor requires that you obtain a digital commercial security certificate for your website forms.

Requirements for Set Up of a Merchant Account:

a. Corporate Bank Account:
This is where the proceeds from the merchant account transactions will be deposited.

b. ID and Financial References:
Passport of all beneficial owners and signatories, plus a second ID such as drivers license, and at least 1 financial reference letter (original, dated within 3 months) is required.

c. Professional References & Proof of Source of Funds:
At least 1 professional reference letter (original, dated within 3 months) is required to open the account. The bank will request all the due diligence covering source of funds including previous tax returns, or financial statements, etc.

d. Letter Describing Your Business or Business Plan:

A letter or business plan should be provided with the following information:

1. Summary of your business activities.
2. Description of products and/or services sold online.
3. Jurisdictions your company currently doing business in.
4. Year your company was incorporated.
5. Previous or expected business volume (annual
revenues, sales, etc.).
6. Estimated charge-back percentage.
7. Website URL that will be used for selling your product or
8. Jurisdiction where the site is hosted.
9. Photocopy of passport for all company directors,
officers, and legal representatives or signatories of
the account.

Merchant Account FAQs:

Q: What is merchant account processing?
A: Merchant account processing services are provided by a bank or a third party processor to the merchant. These services include authorization of credit cards, settlement of funds through the bankcard associations (MasterCard, Visa, etc.), depositing of funds to checking accounts, merchant billing, and account activity reporting.

Q: How do I get a merchant account?
A: The first step is to establish a Panama corporation. Next, you will need to establish a bank account for your corporation. Finally, the merchant account is established through one of our recommended banks or merchant processors. The application process can be extensive, and requires that you complete the necessary documentation and meet personally with the bankers in Panama.

Q: What credit card types can I accept?
A: Through our recommended banks or merchant processors, you can accept all major cards.

Q: How long does the application approval process take?
A: You can start accepting credit cards after the application is accepted and your merchant account is activated. The application process takes from 4 to 8 weeks, depending on whether all of the necessary documentation is complete.

Q: Can I start accepting credit cards immediately?
A: Not until your account is approved and activated.

Q: How will I get paid for credit card transactions?
A: Funds are automatically transferred to your business bank account via an electronic wire transfer after a transaction has been “captured” and settled for payment. The time frames for payments range with each merchant processor, some pay within 72 hours, others within 2 weeks. Please note that certain “hold-backs” (generally a small percentage of the transactions, around 5 to 10%) may apply, depending on the risk level of your business. The “hold-backs” are released after a certain time period, generally within 30 to 180 days (depending on the risk evaluation performed by the merchant processor).

Q: Are there any taxes to be paid in Panama?
A: Yes. There is an annual flat corporate franchise tax of $300 for all Panama corporations. Also, all Panama corporations with business operations permits must file an income tax declaration in Panama.  VAT or sales taxes (7% is the current sales tax rate) may apply for sales made to the Panamanian market. However, Panama has a territorial tax system whereby only income earned from the sale of products or services inside of the territory of Panama is taxed locally (25% corporate tax rate on net income after expenses, plus 10% for dividends withholding tax), and all income earned from sales to people outside of the territory of Panama is NOT taxed in Panama, although that income still must be reported on an annual Panama tax declaration, and there is a 5% dividend withholding tax on net income derived from sources outside of Panama.

Q: Is there paperwork to sign?
A: Yes, applications will need to be signed at the bank, when you submit the required documentation. Once final approval occurs (normally between 4-8 weeks after the merchant processor receives the original paperwork) you will then be able to begin processing. In most cases a personal visit will be required to make the introduction to the bank or merchant processor.

Q: Will I need to purchase additional equipment?
A: No. All you need is a web browser and Internet access to utilize the Virtual Point Of Sale (POS) terminal. Use this to authorize/settle transactions, view orders, manage recurring billing etc.

Q: Will I receive statements?
A: Yes. Our recommended banks or merchant processors offer Internet-based statements and reporting, that gives you online access to review your daily sales, financial history, and other pertinent account information.

Q: What type of bank account do I need?
A: A business checking or savings account is required.

Q: If I am a new start up company without a credit history, will my company get approved?
A: There are no strict credit requirements. Any business can be approved as long as it fits within the activities or products that are permissible by the bank or merchant processor and the owners and signatories have provided all the required documentation.

Q: I need a merchant account for processing online gambling transactions for my online casino. Can I be approved?
A: No. None of our recommended banks or merchant processors are currently offering accounts for online gambling or gaming businesses.

Q: I already have a retail merchant account. Why do I need another one?
A: Financial institutions and card Associations have different criteria for evaluating the potential risk involved in credit card transactions where the card is not physically presented to the merchant. This type of business is typically referred to as “card not present” or “MO/TO” (mail order/telephone order). For this reason, a separate merchant account may be needed.

Q: What is a payment gateway?
A: A payment gateway is a service that gives merchants the ability to perform real-time credit card authorizations from a web site over the Internet. The Gateway is an encrypted channel that passes the transaction securely from your customer’s computer to the financial institutions to capture the authorization and approval. Once the transaction is complete, the information is sent back through the Gateway to complete the order and provide you with verification. The Gateway offers many administrative features such as: viewing orders, keeping sales tax records, account maintenance, etc.

Q: How do I get my gateway set up?
A: Our recommended banks or merchant processors provide you with a complete turnkey solution. When you apply and are approved for an account, the gateway will be set-up by following the procedures that the bank or merchant processor provides.

For further information about Panama Merchant Accounts and our Fees, please contact us.

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