February 1, 2001
The free circulation of the US dollar and the corresponding absence of exchange controls helped Panama to develop as an important financial center. Panama has never imposed controls for the import or export of any type of currency. Remittance of funds abroad are only subject to certain withholding taxes when the funds come from operations that are taxable within the country and only the income produced from operations made within the territory of Panama is subject to income tax.
The country's original 1970 banking law was strengthened in 1998 and the banking industry shifted from a rather self-regulated system to one that is intent on adopting and following the Basle Committee Rules of
Panama's Superintendency of Banks is helping the country's banking system adopt and follow an internationally accepted regulatory framework.