Crypto license in Panama

Panama has taken a unique stance toward cryptocurrency: activities like token issuance, trading, and promotion are legal yet operate without a dedicated regulatory framework. In 2021, Panamanian lawmakers introduced Bill No. 697 to integrate crypto into the economy. That bill, passed by the National Assembly in April 2022, would have regulated cryptocurrency use and allowed Bitcoin and other tokens as payment for any commercial transaction. However, President Laurentino Cortizo partially vetoed Bill 697 over Anti-Money Laundering (AML) concerns, and the Supreme Court ultimately struck down the bill in 2023 as unconstitutional. As a result, Panama entered 2024 with no specific crypto law in force, leaving the sector in a de facto “legal gray area” – crypto business is permitted, but no comprehensive legislation explicitly governs it.

Despite this uncertainty, Panama’s appeal as a Latin American crypto hub has grown. The country is an international business center with a service-driven economy (notably in banking, logistics, and finance). It leverages a territorial tax regime and multiple free zones to attract foreign business. Critically, foreign-sourced income isn’t taxed in Panama, meaning global crypto trading revenue can be earned tax-free through a Panamanian entity. Business incorporation is quick and straightforward – registering a company can take as little as two weeks, with no physical presence or local shareholders required. Panama also uses the U.S. dollar as legal tender, eliminating currency exchange risk for crypto firms operating internationally. The government has signaled a fintech-friendly approach, encouraging blockchain innovation and welcoming crypto entrepreneurs. In 2025, new legislative efforts (discussed later in this guide) aim to modernize Panama’s crypto rules and solidify its status as a regional hub for digital assets. In short, Panama currently offers a permissive environment with minimal red tape, making it an attractive base for startups and established companies seeking a foothold in the Latin American crypto market.

What Is a Panama Crypto License?

In practice, a “Panama crypto license” refers not to a formal permit (since Panama has no mandatory crypto licensing regime at present) but rather to the establishment of a Panamanian corporate entity to conduct crypto-related business. Unlike many jurisdictions that require special authorization for crypto exchanges or wallet providers, Panama allows these businesses to operate under a general corporate structure without a dedicated license. Essentially, once you incorporate a company in Panama, that company can engage in cryptocurrency activities by default, provided it complies with broader financial regulations. The term “crypto license” in Panama thus means obtaining legal status for your crypto venture via company registration, rather than receiving a government-issued certificate. This approach is recognized internationally – a Panamanian Sociedad Anónima (S.A.) corporation is a well-established legal vehicle that signals your business is organized under Panama’s laws.

It’s important to note that no specialized regulatory body or vetting process currently exists for crypto ventures in Panama. In contrast to countries where a financial authority must approve a crypto license application, Panama does not require such approval for crypto businesses. The absence of a formal license, however, does not exempt companies from general law: crypto firms must still adhere to Panama’s existing legal and compliance requirements (discussed below). In summary, obtaining a “Panama crypto license” today typically means registering a Panamanian company and meeting standard corporate obligations, which then allows you to legally operate a crypto exchange, wallet service, token issuance platform, or other virtual asset service without further licensing. This simplified regime offers ease of entry, though companies should be prepared to self-regulate on issues like AML and consumer protection in the absence of detailed government rules.

Who Needs a Panama Crypto License?

Any cryptocurrency or blockchain business aiming to leverage Panama’s favorable environment would pursue this route. If you are launching a crypto exchange, trading platform, custodial wallet service, crypto ATM network, token issuance (ICO/STO) project, or a fintech offering related to digital assets, incorporating in Panama can confer legal legitimacy to your operations. Both startups and established companies choose Panama to base their crypto operations, especially when serving an international customer base. Because Panama imposes no special license, crypto entrepreneurs can quickly establish a fully legal entity and begin business activities such as exchange of cryptocurrencies, facilitating peer-to-peer trades, providing wallet custody, or offering blockchain-based financial services. Even foreign companies may set up a Panamanian subsidiary or branch to take advantage of local benefits and expand into Latin America.

You would need a Panama crypto setup if you intend to operate from Panama or under Panamanian jurisdiction in any of the following scenarios:

• Crypto Exchange or Brokerage: To run an online cryptocurrency exchange or brokerage platform from Panama, you incorporate a Panamanian S.A. and use it as the operating entity. Panama allows such exchanges to function without obtaining a separate exchange license (unlike in stricter jurisdictions). This is ideal for exchanges targeting users globally while enjoying Panama’s tax and banking advantages.

• Wallet and Payment Services: Companies providing digital wallet applications, crypto payment processing, or remittance services can base in Panama. Since wallet providers and payment processors are not subject to crypto-specific licensing, they can operate under a normal company license, though they must still follow general AML rules.

• Crypto ATM Operators: Firms installing crypto ATMs or kiosks in Panama or other countries can incorporate locally. There is no special permit required to handle crypto ATM services as long as the corporate entity is in good standing and compliant with financial laws.

• Token Issuers and Blockchain Startups: Startups launching token sales (ICO/STO), building decentralized applications, or providing blockchain-based financial products often register in Panama to benefit from the business-friendly climate. Panama’s legal system lets companies freely issue digital tokens or cryptocurrencies as part of their business, since such activities aren’t prohibited (tokens are generally not classified as securities by Panamanian regulators).

• Fintech and Investment Platforms: Investment funds or fintech platforms dealing in crypto assets can also choose Panama. They might do so to avoid heavy regulation elsewhere, with the understanding that Panama’s regulators (like the Superintendence of Banks or of Securities) do not currently treat crypto activities as within their direct oversight. (If a crypto business veers into activities that resemble traditional banking or securities – for example, offering interest-bearing crypto accounts or tokenized stock trading – then those regulators may assert jurisdiction under existing law. In such cases, additional licensing like a banking or securities license could be required, but pure crypto transactions themselves remain unregulated in Panama.)

Scope of Permitted Activities

Under Panama’s current regime, a properly registered company can engage in the full spectrum of cryptocurrency-related activities, as long as those activities are lawful (e.g. not involving fraud or other crimes). There is no restrictive list of permitted vs. prohibited crypto activities – in fact, the absence of crypto-specific regulation means Panamanian companies are generally free to pursue any crypto or blockchain business model by default. Key activities explicitly or implicitly allowed include:

• Cryptocurrency Trading and Exchange: Buying, selling, and exchanging digital assets (Bitcoin, Ethereum, tokens, etc.) is legal for both individuals and companies. A Panamanian company can operate an online crypto trading platform or exchange without a separate exchange license. Users in Panama or abroad can trade on such platforms, and there is no law capping trading volumes or types of coins. (Standard fraud and anti-crime laws still apply, of course.)

• Payment Services in Crypto: Companies can use crypto to pay for goods and services by mutual agreement. Panama does not yet recognize crypto as legal tender, but it places no ban on using crypto as a means of payment between parties. In fact, proposed legislation seeks to explicitly recognize Bitcoin, Ethereum, and stablecoins as accepted payment methods for any transaction if parties consent. Even ahead of that law, businesses in Panama are already free to accept crypto payments for products or services. Notably, the Panama City government has moved to accept Bitcoin for certain municipal payments like taxes and fees, indicating growing acceptance in the public sector.

• Crypto Custody and Wallet Services: Providing custody of crypto assets, operating online or hardware wallet services, and related custodial activities are allowed. Because wallet providers are considered Virtual Asset Service Providers (VASPs) (in a broad sense) but face no special license requirement, a Panama-incorporated firm can legally offer secure storage or custodial solutions to customers. They must simply ensure they follow general data security and AML practices (there is no local mandate on how wallets must operate).

• Mining and Staking: Cryptocurrency mining (including operating mining farms or facilities) and staking operations are permitted. Panama has no legislation restricting crypto mining, so companies can mine and sell cryptocurrencies under the normal business rules. Any power usage or environmental regulations would be the same as for other data center or industrial operations. Staking (running validator nodes, etc.) is also unregulated and can be done freely by companies or individuals.

• ICO/Token Issuance and Crypto Fundraising: Launching a new cryptocurrency or token (such as through Initial Coin Offerings or token sales) can be done by a Panamanian entity. There is no securities law classification for utility tokens in Panama – regulators have indicated digital assets are outside the securities market’s scope – so selling tokens to the public from Panama is not an activity that requires a securities prospectus or license. That said, outright fraud is still illegal, and if a token clearly represents a share or bond, it could draw scrutiny under existing laws. In general, though, blockchain entrepreneurs can issue and market tokens from Panama relatively freely.

• Crypto Advisory, Marketing, and Other Services: Ancillary services like crypto investment advisory, crypto education platforms, blockchain software development, or marketing of crypto products are all permitted. These fall under normal business services. For instance, running a crypto investment consulting firm or a crypto gaming platform (like a blockchain game or NFT marketplace) out of Panama is fully allowed – there is no additional license or restriction as long as the company is properly formed.

Benefits of a Panama Crypto License

Choosing Panama for your crypto venture offers numerous advantages, from cost savings to operational freedom. Below are the key benefits of a Panama crypto license (i.e. running a crypto business via a Panamanian company):

• No Special License Required – Easy Market Entry: Panama imposes no mandatory licensing or prior approval for crypto businesses. This dramatically reduces bureaucratic hurdles and lead time. Entrepreneurs can incorporate and start operating quickly, without the lengthy application processes or strict eligibility criteria found in other jurisdictions. The streamlined entry speeds up time-to-market for new exchanges or platforms.

• Low Incorporation and Operating Costs: The cost of setting up and running a company in Panama is relatively low. Company incorporation fees are only a few thousand euros, and annual maintenance costs (government fees, agent, etc.) are modest. There are no paid-up capital requirements and no expensive license renewal fees. This cost efficiency is a major draw for startups and cost-conscious firms. It allows companies to allocate more budget to development and marketing rather than compliance overhead.

• Favorable Tax Regime: Panama’s territorial tax system is extremely advantageous for crypto ventures. Only income earned within Panama is subject to corporate tax (at 25%), while foreign-sourced income (including international crypto trading or services provided to overseas customers) is completely tax-exempt. In practice, a crypto exchange serving users outside Panama would pay 0% tax on those earnings. Additionally, capital gains from crypto transactions are tax-free in Panama unless such trading is your regular business activity (in which case it’s just treated as business income). There is also no VAT (sales tax) on cryptocurrency transactions or services, which helps reduce costs for both the company and its customers. Overall, Panama offers one of the most crypto-friendly tax environments globally.

• US Dollar Economy: Panama uses the U.S. dollar as its official currency (alongside the Panamanian Balboa which is pegged 1:1 to USD). Crypto businesses benefit from operating in a stable, inflation-proof currency with no exchange rate risk for any USD-pegged stablecoins or fiat dealings. This simplifies banking and accounting, especially for companies raising capital or transacting in USD. There’s no need to convert revenue into another currency to use it locally, which is a significant practical advantage.

• Privacy and Asset Protection: Panama offers strong corporate privacy. Shareholders and ultimate beneficial owners (UBOs) of Panamanian companies are not publicly disclosed, providing a layer of confidentiality. Only directors’ names appear on the public registry. This means founders and investors in a crypto venture can remain anonymous in public records, which is valued in the crypto space. Additionally, Panama’s legal system has historically been friendly to offshore asset protection, and Panamanian entities are recognized internationally as legitimate business structures, aiding in securing partnerships and accounts abroad.

• No Minimum Capital or Local Partner Requirements: Panama does not impose any minimum paid-in capital for company formation. You can incorporate with a nominal share capital (e.g. USD 1,000 or less) without any issue. Moreover, you do not need a local shareholder or local director (directors can all be foreign persons). This flexibility makes incorporation simpler – a single foreign founder can own 100% of the company, and professional nominee directors can be hired to fulfill the three-director rule if needed (see Requirements section). The lack of local ownership requirements and capital hurdles lowers barriers to entry considerably.

• Quick Incorporation and Expansion: Setting up a Panamanian S.A. is fast and efficient. With the help of experienced law firms, the incorporation process typically takes around 1–2 weeks. All documentation can be done remotely through powers of attorney and local agents – no travel to Panama is required. Once established, the company can open international bank accounts, sign contracts, and operate globally. Panama’s central location (connecting North and South America) and well-developed professional services sector also make it an ideal hub to expand into other Latin American markets. From one Panama base, crypto firms can reach users across the Americas.

• Government Support and Innovation Climate: The Panamanian government has shown an encouraging stance toward crypto and fintech. Officials have promoted legislation to integrate blockchain in government and to embrace digital payments, signaling that Panama wants to be a crypto-friendly jurisdiction. There is ongoing modernization of laws to provide clarity while keeping Panama attractive to tech businesses. This progressive attitude, combined with the country’s stable political environment, gives businesses confidence that Panama will continue to support innovation (e.g., by not suddenly banning crypto). Panama’s approach is often seen as balancing innovation with pragmatic regulation, aiming to foster growth while meeting international standards.

• Access to Banking and Financial Services: While banking for crypto companies can be challenging worldwide, Panama’s status as a banking hub (especially in USD transactions) can be leveraged. Several local banks and international banking units operate in Panama. By complying with suggested AML standards, crypto companies have been able to open corporate bank accounts in Panama or elsewhere to support their operations. Panama’s integration with global finance (it’s not a sanctioned country and works with international banks) can make it easier to process fiat payments than it would be for an unregulated entity in a less established jurisdiction. Additionally, payment processors and merchant services are available, and firms like SBSB offer assistance connecting crypto businesses to these financial services.

• Appealing to Startups and Established Firms Alike: For startups, Panama offers a low-cost sandbox to build and iterate without heavy compliance costs, which is crucial in early stages. For established companies, Panama can serve as a tax-efficient regional headquarters or a vehicle for certain business lines (for example, an exchange might base international operations in Panama for tax optimization). The overhead savings and regulatory freedom can improve profitability. As noted by experts, Panama provides a straightforward path with low ongoing expenses and confidential ownership, which appeals to both small and large players looking to reduce operational overhead.

Disadvantages and Limitations

While Panama’s crypto-friendly approach has many upsides, it also comes with certain drawbacks and limitations. Companies should weigh the following factors before choosing Panama:

• Lack of Regulatory Clarity (Legal Grey Area): The flip side of “no crypto law” is that Panama offers little in the way of official regulatory guidance or investor protections for crypto. Operating in a legal grey area can create ambiguity – for instance, there is no clear governmental recourse if something goes wrong, and rules can change with new laws. This uncertainty may concern some investors or partners. As of 2025, Panama’s crypto regime is in flux (with new laws pending), so the ground rules could evolve quickly. Companies must stay agile and informed. In short, the absence of a dedicated framework means you won’t have the formal recognition or “badge” of being a licensed entity, which can be a reputation issue in the eyes of some counterparties.

• Perception and International Reputation: Because Panama does not issue a government crypto license, a Panamanian crypto company might be perceived as less regulated or less accountable compared to a company licensed in, say, Europe or the U.S. Some institutional clients, payment processors, or banking partners prefer dealing with licensed entities for compliance reasons. Thus, Panama’s cost advantage comes at a potential cost of lower regulatory recognition. Businesses driven by international reputation might lean toward jurisdictions with formal licenses, while those prioritizing cost efficiency choose Panama. This is a strategic trade-off: you gain flexibility but may need to work harder to demonstrate your compliance standards to skeptical partners.

• Banking and Payments Challenges: Although Panama is a banking hub, banks globally often approach crypto companies with caution. In Panama, there is no law forcing banks to serve crypto businesses, so opening an account can be tricky. Many crypto companies must meet stringent due diligence and sometimes provide a large initial deposit to get banking services. For example, some local banks require a minimum deposit of $30,000 for remotely opening a corporate account for a crypto-related company. Others might insist on a personal meeting or higher balances. Also, international banks might scrutinize transfers from a Panama entity due to the country’s offshore reputation. So while banking is possible, it may involve extra costs and compliance work. Companies should be prepared with excellent AML policies to persuade banks – the lack of a regulatory license means the burden is on the company to prove itself trustworthy.

• AML/KYC Compliance Is Still Essential: Panama’s government does not mandate specific crypto KYC/AML procedures by law for unregulated crypto activities. However, in practice you cannot ignore AML/KYC – it becomes a de facto requirement to do business. Banks, payment providers, and even customers will expect your exchange or platform to have robust identity verification and anti-money laundering controls. So, while Panama won’t audit your AML program (unless a new law comes into effect), you must self-regulate to international standards. This private compliance burden can be significant. Essentially, Panama gives you freedom, but with freedom comes responsibility: you should implement systems comparable to regulated exchanges to avoid becoming a haven for illicit activity, which could get you blacklisted by financial partners.

• Governance Requirements (Three Directors): Panama’s corporate law requires at least three directors on the board of a corporation (Sociedad Anónima). This is more onerous than some jurisdictions (for instance, Costa Rica only requires one director for a similar setup). As a result, if you don’t have three trustworthy people internally, you’ll need to appoint nominee directors, often through a law firm, which adds to cost (one firm quotes ~€3,980 per year for three local nominee directors). Managing a board of three is also slightly more complex administratively. That said, this is a relatively minor drawback – many consider it a small trade-off given Panama’s other benefits. Still, it’s a compliance formality to be aware of: board resolutions and company decisions must involve the appointed directors, so you need those positions filled from day one.

• No Formal Consumer Protection or Recourse: Unlike regulated environments, Panama currently has no specific consumer protection rules for crypto users (no guarantee fund, no required disclosures or risk warnings mandated by a regulator). If a Panamanian crypto exchange were to fail or lose customer funds, there is no crypto-specific legal recourse for customers beyond general contract or fraud law. This may make some users hesitant to trust an exchange simply on the company’s jurisdictional credentials. In essence, the credibility of a Panama-based crypto business rests entirely on the operators, not on any governmental oversight. Companies need to build trust through their own transparency and security measures, since they cannot point to a license as proof of vetting.

• Potential Future Regulation: While the lack of regulation is a benefit now, it also means Panama’s rules could tighten in the near future. The National Assembly is actively considering new crypto laws (like Bill 247 in 2025). If such laws pass, existing companies might have to comply with new licensing or registration requirements to continue operating. This isn’t so much a disadvantage as a caution: the regulatory loophole Panama currently enjoys is likely temporary. Companies should be ready to adapt and possibly obtain a license or meet new standards when the law changes. The environment is relatively stable for now, but one should keep an eye on legal developments to avoid surprises.

• Requirement to Self-Educate and Obtain Legal Guidance: With no single regulator guiding crypto businesses, companies in Panama must often consult legal experts to navigate compliance. For instance, you may need legal opinions to assure partners that your activities are unregulated but lawful (some service providers offer local legal opinions on crypto activities at a fee). This DIY approach to compliance means spending on good lawyers and advisors who understand both local law and international expectations. The cost and effort of staying compliant is shifted to the business, rather than being clearly defined by a licensing regime.

Requirements for Obtaining the License

Even though there isn’t a literal license to apply for, there are several requirements and prerequisites to establish a crypto business in Panama. Essentially, these boil down to company formation requirements and basic compliance setup. Below are the key requirements for obtaining what is informally called a Panama crypto license (i.e., forming a Panama crypto company):

• Panamanian Corporation (Sociedad Anónima): You must incorporate a Panamanian company, typically a Sociedad Anónima (S.A.), which is the equivalent of a corporation. This involves drafting Articles of Incorporation (with company name, purpose, share structure, etc.) and registering the company with the Panama Public Registry. Most crypto businesses choose the S.A. form for its flexibility and privacy. Other forms like an LLC or foundation exist, but the S.A. is standard for commercial enterprises.

• Shareholders: At least one shareholder is required (it can be an individual or a legal entity). Panama allows 100% foreign ownership, so the shareholder(s) can be non-Panamanian. Shareholder information is kept private (not on public record). There is no upper limit on number of shareholders. Typically, the incorporation lawyers will ask for KYC documents of each beneficial owner/shareholder (passport copy, proof of address, bank reference, etc.) to comply with due diligence standards.

• Directors: Three directors (or more) must be appointed to the board of the corporation. This is a firm legal requirement in Panama. Directors can be of any nationality and need not reside in Panama. Often, law firms provide nominee directors to fulfill this requirement, especially if the actual owners do not have three persons to act. The names of directors will appear in the public registry, but they can be replaced later if needed. It’s important to have trustworthy directors (or nominees bound by agreement) because they have legal authority to manage the company. In practice, nominees will sign powers of attorney giving control back to the owners. Panama also requires the appointment of a President, Secretary, and Treasurer (which can be among the directors; one person can hold two positions, but there must be at least three individuals in total).

• Local Registered Agent: Panama law mandates that every company have a Registered Agent who is a Panamanian licensed attorney or law firm. This agent’s name and address are filed with the Public Registry. The registered agent acts as the official liaison, receiving any legal notices or government correspondence on behalf of the company. In practice, the law firm that helps you incorporate will serve as the registered agent (typically for an annual fee). This requirement ensures there is a local point-of-contact for the company. The agent will also usually provide the registered office address for the company in Panama.

• Business License (Commercial Notice): After incorporation, the company should obtain a commercial license (Aviso de Operación) if it will carry on commercial activities. This is a general business operating permit issued by the Ministry of Commerce and Industries. It’s a straightforward registration that can be done online through Panama’s business portal. The incorporation service provider often includes obtaining this license in their package. For a crypto business, the license category might be “technology services” or similar, since there isn’t a special crypto category. This license formally allows the company to engage in commerce and will be needed, for example, to open a local office or bank account.

• Tax Identification Number: The company must register with the tax authorities to obtain a Tax ID (RUC, Registro Único de Contribuyentes). Even if the company doesn’t expect to pay taxes (due to only foreign income), having a tax ID is necessary for things like opening bank accounts, signing contracts, and issuing invoices. The RUC is obtained from the DGI (Dirección General de Ingresos) and is often processed by the same lawyer or agent after incorporation. It basically puts the company on record with the tax office.

• No Minimum Capital: There is no minimum paid-in capital requirement in Panama. You can declare any amount as authorized capital in the Articles (many choose USD 10,000 as a standard). You do not need to deposit this capital in a bank or show proof of funds to the registry. (However, note that when opening a bank account, you will likely need to show some initial deposit or capital – e.g., the bank might want to see $5,000 or $10,000 deposited to activate the account, and as mentioned before, some require up to $30k for crypto-related accounts.)

• Fit-and-Proper and Background Checks: While Panama does not conduct a regulatory fitness test on crypto business owners, the registered agent and banks will perform due diligence. This means owners and directors should generally have clean personal backgrounds (no serious criminal records, especially not financial crimes). You will typically need to provide a police clearance certificate or sworn affidavit of no criminal record for each beneficial owner and director as part of the KYC process. Additionally, banks or certain service providers may ask for a professional reference or resume to understand your business experience, especially if you are doing an ICO or financial services.

• AML/KYC Internal Policies: Legally, Panama doesn’t force unregulated companies to have AML/KYC policies, but in practice you should have them. If you plan to operate an exchange or any VASP, you will want to draft internal AML/KYC policies, user terms, privacy policies, etc. not only to manage risk but also because banks or partners might ask for them. Many law firms offer packages to help draft these documents (for example, website Terms of Use, Privacy Policy, AML Policy, etc., often for an additional fee). While not a formal requirement to register the company, these policies are essential for operational readiness and will be needed when onboarding customers or integrating with payment channels.

• Compliance Officer (Recommended): Again, not legally mandated unless the new law passes, but if you are setting up a sizeable operation, it’s prudent to appoint a Compliance Officer/MLRO in your company who oversees AML procedures. This person could be one of the directors or a dedicated hire/outsourced service. It demonstrates commitment to compliance and will be useful when communicating with banks or regulators in the future. Under pending regulations, having a compliance officer might become a formal requirement for VASPs.

• Proof of Funds: If you are hiring a firm to open a bank account, you will typically need to show proof of source of funds for the initial capital or expected transactions. This could be financial statements, personal bank statements of founders, or revenue projections for the business. This is not required by the government for incorporation, but practically required for banking. It’s wise to prepare a simple business plan or executive summary of your project, which many banks ask for to understand the nature of the crypto business (especially to ensure it’s not a money laundering front).

To summarize the requirements: Forming a Panama crypto company mainly requires fulfilling standard company law requirements (3 directors, local agent, etc.) and preparing the documentation to meet due diligence checks. The Panama crypto license requirements are relatively light – one shareholder suffices, three directors must be appointed, and there’s no statutory capital or specific crypto regulation to satisfy at incorporation. The heavy lifting is mostly in gathering KYC documents and setting up internal policies to operate soundly. Below is a checklist of core steps and requirements for clarity:

1. Company Name Reservation: Choose a unique company name (plus two alternates) to be checked and reserved.

2. Execute Articles of Incorporation: Sign the incorporation papers (usually via power of attorney through your lawyer). Include company purpose broad enough to cover crypto activities.

3. Appoint 3 Directors and Officers: Decide on directors, president, secretary, treasurer. (Use nominee services if needed.)

4. Provide KYC Documents: Supply certified passport copies, proof of address, bank reference letters, and possibly financial statements for all owners/directors. These are for the registered agent’s file and banks.

5. Registered Agent & Office: Engage a Panamanian law firm to act as agent and provide the legal address.

6. Incorporation Filing: The agent files the company with the Public Registry. Pay the government incorporation fee (usually included in service fee).

7. Obtain Corporate Documents: Once registered, obtain certified copies of the Public Registry certificate, Articles of Incorporation, and share certificates. Apostille these documents if you will use them abroad (for example to open foreign bank accounts).

8. Tax ID and Business License: Register the new company with the tax authority (RUC) and obtain the commercial business license (these may require an in-country address and a brief description of business).

9. Open Bank Account (Optional at this stage): If needed, proceed to open a corporate bank account in Panama or another jurisdiction. Prepare a business plan, initial deposit, and complete bank due diligence forms. This often requires the documents from steps 7 and 8.

10. Set Up Accounting & Compliance Infrastructure: Arrange for bookkeeping/accounting services (especially if you expect transactions) and draft AML/KYC policies and other compliance documents. These are important for running the business even if Panama law doesn’t ask for them outright. Also consider hiring a compliance officer or outsourcing compliance advisory.

Meeting the above requirements will ensure your Panama entity is properly established and ready to engage in crypto business. Compared to licensing in other countries, you’ll notice no need to submit detailed business plans or undergo background checks by a regulator – the process is mainly administrative. Once the company is formed, it’s up to you to run it in compliance with law and best practices, as Panama won’t micromanage your crypto activities under current rules.

Process and Timeline

Starting a crypto company in Panama is a multi-step process that can be completed in a relatively short timeframe. Here’s a step-by-step look at how the process unfolds and the estimated timeline for each stage:

1. Incorporation of the Company (Week 1–2): You begin by preparing the incorporation documents through a Panamanian law firm. This includes choosing the company name, defining the share structure, and appointing directors. The law firm will file the Articles of Incorporation with the Public Registry and pay the requisite fees. Once filed, the company is usually registered within a few business days. At this point, the company legally exists. Estimated time: Panama’s registry is efficient; incorporation can often be completed within 5–10 business days assuming all information and KYC documents were provided quickly.

2. Issuance of Corporate Documents (Week 2): After registration, the Public Registry issues a Certificate of Incorporation (Registro Público certificate) confirming the company’s details. The law firm obtains certified copies of this and the filed Articles. The firm will also prepare the company’s share certificates, stock ledger, and minutes of the first board meeting (which appoint officers, etc.). If you’re a foreign founder, you’ll typically need these documents apostilled (an international notarization) so you can use them abroad. Obtaining an apostille in Panama might add a few days. Estimated time: Collecting and apostilling documents should take 1 week or less after incorporation.

3. Obtaining Tax ID and Licenses (Week 2–3): The next step is to register the company with the tax authority (DGI) to get a Tax Identification Number (RUC). The law firm can do this in a day or two by submitting forms to the tax office. Simultaneously, you apply for the commercial business license (if needed) which can sometimes be done online in a day. These registrations are generally quick, but if additional information is required, it could take a few extra days. Estimated time: Several business days for both, often completed by the end of week 2 or into week 3.

4. Bank Account Opening (Week 3–6, in parallel): Opening a corporate bank account for a crypto-related company can be the most time-consuming step, and it often proceeds in parallel to the above. If you choose a local Panamanian bank and opt for remote opening, you’ll need to submit all corporate docs, plus detailed forms and due diligence. Banks will review your business plan, compliance policies, and the owners’ background. Estimated time: It varies – some banks might approve in 2–3 weeks, others can take longer or even require a physical meeting. The PDF from SBSB suggests that with their assistance a remote account could be set up in about 3–4 weeks after incorporation. Note that this step can overlap with others; you can start the bank account application once you have the corporate documents without waiting for the tax ID (though the bank will eventually need the tax ID too).

5. Nominee Director Arrangements (Week 1–3): If you are using nominee directors, the law firm will arrange their appointment at incorporation. The nominees will sign any necessary declarations or powers of attorney right after the company is formed to ensure you (or your trusted person) have operational control. This doesn’t add much time but is an important process administratively. It should be wrapped up by week 2 along with incorporation.

6. Internal Setup and Deployment (Week 4 onward): While waiting for the bank account or immediately after, you will be setting up your operational infrastructure: deploying your exchange platform or service, integrating payment processors, etc. You’ll also finalize internal policies and perhaps test your compliance procedures. By the time the bank account is active and funded, your Panama entity is ready to transact. If everything goes smoothly, a crypto startup could be fully operational within 4–6 weeks of project kickoff.

To illustrate, here is a typical timeline for a Panama crypto company project:

• Day 1: Sign engagement with law firm, provide KYC docs and company details.

• Day 3-5: Company name reserved and Articles of Incorporation signed.

• Day 7: Company incorporated and registered.

• Day 10: Corporate documents certified; Tax ID and business license applications submitted.

• Day 15: Tax ID obtained; commercial license issued.

• Day 15: Bank account application submitted (if not already).

• Day 21-30: Bank conducts due diligence, may ask follow-up questions or additional documents (e.g. source of funds proof).

• Day 30: Apostilled documents delivered for international use (if needed).

• Day 35-42: Bank account approved and ready for initial deposit (timeline can vary).

• Day 42: Company begins live operations (trading platform launched or first transactions processed).

Total estimated timeline: roughly 1 to 2 months. In many cases, core setup is done within the first month, especially if banking is straightforward or if the company uses payment processors abroad instead of a local bank. The incorporation itself is very fast – the longest pole tends to be ensuring compliance for banking. The process can be expedited by preparing all documentation in advance and promptly responding to any inquiries.

One should also factor in time for document gathering on the client side (e.g. obtaining certified passport copies, references) – delays in that can push the timeline. However, as noted in the SBSB materials, the timeframe largely “depends on the speed at which the client provides the documents”. With proactive planning, Panama offers a quick launchpad for crypto businesses compared to many other jurisdictions.

Costs, Taxes, and Fees

One of Panama’s key advantages is the affordability of setting up and maintaining a crypto business. Below we break down the major cost components and the tax regime for a Panama crypto company.

Incorporation and Licensing Costs

Forming a company in Panama and equipping it for crypto operations involves certain one-time and recurring costs. The following table summarizes typical costs (in euros) based on service provider data and official fees:

Table: Key Panama Incorporation and Service Costs