Crypto Regulation and License Status in Panama

Why Choose Panama for Crypto?

Panama offers crypto businesses a USD-denominated offshore structure with a 25% corporate tax limited to Panama-source income, no dedicated virtual-asset licence to obtain, and a Supreme Court ruling that struck down the proposed 2022 framework. As of May 2026, no successor bill has reached the floor for a vote.

Panama runs on the US dollar as legal tender alongside the Panamanian balboa and has done so since 1904. For crypto operators that means a USD-denominated holding or operating vehicle without currency conversion friction and without depending on a domestic central bank policy decision. The territorial tax principle codified in Article 694 of the Código Fiscal exempts foreign-source income from Panamanian corporate tax,^[1] so a Panama entity that earns trading, exchange or treasury revenue economically outside Panama retains no tax liability inside the country.

The defining regulatory fact is what is absent. The Asamblea Nacional approved Proyecto de Ley 697 of 2021 (“Ley de Criptoactivos”) on 28 April 2022, but the President partially vetoed the bill in June 2022 and again in January 2023 after the Asamblea re-passed a modified text.^[2] The Corte Suprema de Justicia, sitting in plenary under ponencia of Magistrada María Eugenia López Arias, declared the entire project inexequible “por razones de forma” on 6 June 2023. The Court ruled that the Asamblea had introduced amendments in second debate beyond the scope of the Executive’s objections, contrary to Article 170 of the Constitución Política.^[3] The Edicto No. 835 publishing the decision is dated 14 July 2023.^[3]

A successor, Proyecto de Ley 247, was presented to the Asamblea Nacional on 20 March 2025 by HD suplente Gabriel Solís and prohijado by the Comisión de Comercio y Asuntos Económicos on 10 April 2025.^[4] As of May 2026, PL 247 has not been approved in first, second, or third debate. The page treats it as pending legislation: noted in the Regulatory Framework below, not presented as current law.

In practice, businesses choosing Panama today are choosing it for the gap. The Sociedad Anónima under Ley 32 of 1927 remains the workhorse entity and the territorial tax stays intact. Whether that gap closes in 2026 or persists for another three years cannot be confidently predicted; the prudent planning assumption is that PL 247 (or a substitute) will eventually pass, and that any structure built today should be ready to apply for whatever Panama VASP authorisation emerges.

Panama is the right structuring jurisdiction for a defined buyer profile: founders of crypto-adjacent businesses targeting non-EU customers, treasury structures for tokens whose issuers sit elsewhere, payment-processor and OTC-desk infrastructure serving Latin American flows, and IP-holding vehicles where the substance test is satisfied outside Panama. It is not the right structuring jurisdiction for institutional custodians needing a regulator-issued custody licence (Cayman serves that), for businesses prioritising EU market access (Estonia MiCA CASP serves that), or for operators whose risk appetite requires the institutional weight of a Big-Four jurisdiction. Many operators pair a Panama vehicle with a high-risk business structuring brief delivered elsewhere.

Regulatory Framework

Panama has no dedicated crypto regulatory framework in force. Crypto operations rely on Decreto Ley 1 of 1999 (securities, applicable only if a token meets the “valor” test), Ley 23 of 2015 (AML/CFT), Ley 32 of 1927 (corporate vehicles) and Ley 129 of 2020 (beneficial-ownership registry). The SMV has confirmed in four opinions that cryptocurrencies are not securities and fall outside its perimeter.

The Four-Regulator Map

Panama has not designated a single VASP supervisor. Four regulators touch the crypto perimeter from different angles.

The Superintendencia del Mercado de Valores (SMV) regulates securities and securities intermediaries under Decreto Ley 1 of 1999. The SMV has issued four formal opinions concluding that cryptocurrencies are not “valores” under the Securities Law: Opinión 07-2018 (15 November 2018), Opinión 01-2023 (23 March 2023), Opinión 05-2023 (24 August 2023), and Opinión 04-2025 (25 August 2025).^[5][6] The Opinión 04-2025 went further, clarifying that non-custodial crypto exchange and custody facilitation does not require an SMV licence and that licensed casas de valores are prohibited from custodying crypto on behalf of clients.^[5]

The Superintendencia de Bancos de Panamá (SBP) supervises banks and other sujetos obligados financieros under Ley 23 of 2015. The SBP’s foundational public position on cryptocurrencies dates from 25 April 2018, when it issued a public communiqué declining direct regulatory authority over crypto activity.^[7] It has not asserted that authority since.

The Unidad de Análisis Financiero (UAF) is Panama’s financial intelligence unit, receiving suspicious-transaction reports (ROS) and coordinating with international FIUs. The UAF operates under the Ministerio de la Presidencia and acts as the AML enforcement node across both financial and non-financial obligated subjects.^[8]

Housed within the Ministerio de Economía y Finanzas (MEF), the Superintendencia de Sujetos No Financieros (SSNF) supervises designated non-financial businesses and professions. It administers the Registro Único de Beneficiarios Finales (RUBF) beneficial-ownership database established by Ley 129 of 2020.^[9] VASP activity is not currently enumerated in Article 23 of Ley 23 of 2015 as a sujeto obligado no financiero. The practical effect is that crypto businesses incorporated in Panama have no specific supervisor checking their AML programme, until either Ley 23 is amended to add VASPs to Article 23, or PL 247 (or a successor) creates a dedicated regime.

Legislative Status as of May 2026

As of May 2026, no Panama crypto regulation has been enacted. The two material legislative events sit on either side of the Corte Suprema ruling:

The Mulino administration (in office since 1 July 2024) has not sponsored a government crypto bill and has not signalled a position on PL 247. President Mulino attended Panama Blockchain Week (22–24 April 2025), which industry commentators read as receptive but non-committal.

Indirect Touchpoints

A token that satisfies the definition of “valor” under Decreto Ley 1 of 1999 (typically an equity, debt, profit-share, or derivative instrument) triggers full SMV jurisdiction: prospectus, registration, and casa de valores intermediary licensing requirements apply. What the SMV has not addressed in any Opinión is the boundary case of a token whose economics resemble both a payment instrument and a fund interest; the common mistake is assuming the SMV’s “not a valor” position covers all token designs. It does not. The test is applied token by token.

There is no Panama e-money or payment-systems framework specific to stablecoins. The Banking Law treats payment activity that constitutes banking activity as bank-supervised, but a stablecoin issuer that does not take deposits and does not extend credit falls outside both the Banking Law perimeter and the SMV’s Securities Law perimeter as currently interpreted.

Permitted Activities and Regulatory Treatment

Panama issues no dedicated crypto licence as of May 2026. Crypto activity is treated under four parallel perimeters: securities law (only if a token is a valor); AML obligations (only if the operator is enumerated as a sujeto obligado, which crypto businesses currently are not); banking law (only if the activity constitutes banking); and the general corporate-vehicle and tax framework that applies to every Panama company.

The Four Perimeters

What Each Perimeter Does Not Cover

What the SMV’s perimeter does not address is the boundary token: hybrid tokens with payment and revenue-share features, governance tokens with airdrop schedules, and rebasing-supply mechanisms. Practitioners structure these tokens out of Panama into clearer jurisdictions (Cayman for institutional capital, Estonia for EU CASP scope, El Salvador for the CNAD digital-asset perimeter) and use Panama only for the corporate and treasury layer.

What the UAF’s perimeter does not address is the crypto operator’s own programme: the UAF is the destination for suspicious-transaction reports, not the supervisor of the underlying AML procedures. Until VASPs are listed in Article 23 of Ley 23 of 2015 (or PL 247 enacts a dedicated regime), there is no Panama AML inspector who will review a crypto AML manual. Banks and EMIs that onboard the business apply the AML standards instead.

Activities That Can Be Conducted from a Panama Entity

Without a licence, a Panama Sociedad Anónima can conduct (subject to the perimeter caveats above): non-custodial exchange and brokerage; custody of digital assets held for non-Panama clients; OTC trading; token treasury management; IP holding for blockchain protocols; payment-processor activity that does not constitute banking; and consulting and SaaS provision.

The honest reading is that a Panama structure today is best understood as the operating layer for a business whose customers and substance sit elsewhere, not a stand-alone regulatory anchor on which a counterparty bank, institutional investor, or regulator-facing buyer can rely.

Requirements

Panama imposes no crypto-specific operating requirements as of May 2026. Standard corporate requirements apply: a Panamanian resident agent, minimum three directors, RUBF beneficial-ownership registration within 15 business days, and accounting records under Ley 52 of 2016 as amended. AML obligations apply only if the operator is a banking or DNFBP counterparty.

Fit-and-Proper Assessment

No fit-and-proper review is applied to a crypto business by any Panamanian authority because no licence is issued. The closest equivalent is the SBP’s fit-and-proper standard for shareholders and directors of regulated banks (Acuerdo 5-2008 and subsequent reforms), which is irrelevant unless the structure includes a regulated bank.

Experienced applicants nonetheless prepare a fit-and-proper-equivalent file (three-year background checks on directors and ultimate beneficial owners, source-of-funds documentation, audited financials where available), because banking-onboarding due diligence applies essentially the same standard the regulator would have applied. The work happens regardless of who reviews it.

Local Presence / Local Representation

The resident agent (an abogado idoneidad-holder or law firm) is the only mandatory local presence for a Panama Sociedad Anónima. The agent files the RUBF entry, holds the corporate book, and serves as the point of contact for any regulatory or judicial notification. Panama does not require a local director, a physical office, or local employees for an offshore-only operation.

If the company seeks an Aviso de Operación (commercial notice) to operate inside Panama, the Panamá Emprende process under Ley 5 of 2007 requires a registered local address; for offshore-only operations, the Aviso is not required.

AML/CFT and Travel Rule

Ley 23 of 27 April 2015 is the foundational AML/CFT statute, consolidated by the UAF as of April 2022.^[8] Article 22 lists sujetos obligados financieros (banks, securities firms, fiduciaries, insurance, etc.). Article 23 lists sujetos obligados no financieros: including the Colón Free Zone, real estate brokers, casinos and gambling operators, securities transport, and certain construction contractors. Crypto and VASP activity is not currently enumerated under Article 23.^[10]

There is no Panama FATF Travel Rule statute applying to VASPs. The Travel Rule applies to Panama-regulated banks under the SBP’s AML framework, and a crypto business onboarded by a Panama bank is subject to the bank’s Travel Rule procedures by extension.

Sanctions screening obligations on banks and DNFBPs cover OFAC, EU, and UN consolidated sanctions lists. A crypto business that operates through a Panama bank inherits these screening standards as a counterparty.

Application Process

There is no regulator application process for crypto activity in Panama. The setup sequence is corporate: entity formation, RUBF registration, accounting onboarding, AML readiness, and banking application. End-to-end timeline is 2–4 weeks for corporate setup plus 1–3 months for banking onboarding.

Corporate filings are made in Spanish to the Registro Público and Panamá Emprende.

Setup Process Timeline

Compliance Documentation Bridge

Jagelski & Partners’ specialist compliance partners draft Panama-specific AML/CFT manuals, enterprise-wide risk assessments, sanctions screening procedures, and KYC/KYB onboarding playbooks as part of the Panama setup engagement. The compliance documentation is the most time-intensive component of any Panama crypto setup: 2–4 weeks of specialist work that cannot be shortcut with generic templates, because banks and EMIs onboard the business against the documentation, not against a Panama regulator-issued licence.

Required Documents

Panama requires standard corporate documents for incorporation, beneficial-ownership documents for the RUBF, and accounting documents under Ley 52 of 2016 as amended. The compliance documentation set is not statutory for crypto businesses but is required as a practical matter for banking onboarding.

Corporate Documents

The pacto social (articles of incorporation), subscribed by two subscribers and notarised before a Panamanian notary, is filed at the Registro Público under Ley 32 of 1927. The minutes of the constituent shareholders’ meeting appointing directors and officers, and the share register reflecting initial subscription, are held by the resident agent. The Aviso de Operación, where applicable, is held by the company. The RUC/NIT certificate is issued by the DGI on application.

Personal Documents

For all directors, officers, qualifying shareholders, and ultimate beneficial owners: certified copies of passport and a second photo ID for each director, officer, and qualifying shareholder. Proof of residence (utility bill or bank statement, less than 3 months old). Three professional or banking references per director and ultimate beneficial owner. CV or biography for each director. Source-of-funds and source-of-wealth documentation for ultimate beneficial owners (bank statements, audited financials of operating companies, tax returns), not strictly statutory but expected by every banking onboarding workflow.

Compliance Documentation

Although Panama does not currently require crypto businesses to hold a regulator-approved AML programme, banking onboarding for a crypto-facing Panama entity is conducted against the same AML standards that a Panama-licensed financial institution would be expected to meet under Ley 23 of 2015 and the SBP’s AML acuerdos. Jagelski & Partners’ specialist compliance partners draft jurisdiction-specific compliance documentation for every Panama crypto setup. The documents below are the minimum set most banks require to onboard a Panama crypto operator in 2026.

• AML/CFT Policy Manual. Documents the firm’s AML programme: risk-based approach, customer due diligence tiers, ongoing monitoring, sanctions screening, SAR/STR escalation. The manual must cover the obligations under Ley 23 of 2015 and Decreto Ejecutivo 587 of 2015 (preventive freezing), reference the UAF as the FIU, and identify the OFAC, EU, and UN consolidated sanctions lists. Banks scrutinise the customer risk-rating methodology and the SAR/STR escalation thresholds most closely.
• Enterprise-Wide Risk Assessment. ML/TF, operational, technology, and jurisdictional risk identification and scoring for the specific Panama operating profile. It must address Panama-specific factors: the territorial tax system, the historical FATF and EU AML high-risk listings (both now lifted), the proximity to high-risk Latin American flows, and the operator’s customer-base geography.
• Risk Appetite Statement (recommended). Boundaries the firm sets on customer types, geographies, products, and transaction values. Not strictly required, but recommended because banking-onboarding teams treat its absence as a control-environment weakness.
• Sanctions Screening Procedures. OFAC SDN, EU consolidated, UN consolidated, plus jurisdiction-specific lists. The procedures must specify the sanctions provider, the screening frequency (onboarding plus daily delta), and the escalation pathway for true and false positives.
• Restricted Countries and Jurisdictions Matrix. Prohibited and high-risk jurisdiction list with enhanced-due-diligence triggers. The matrix must distinguish FATF black-list (prohibited), FATF grey-list (enhanced due diligence), and the bank’s own internal high-risk jurisdictions.
• Transaction Monitoring Framework. Rules, thresholds, escalation, and detection scenarios for crypto-specific flows: unusual structuring across multiple wallets, links to mixers or sanctioned addresses, sudden volume changes, and counter-party concentration. Calibrated to the firm’s actual customer profile, not a vendor template.
• Travel Rule Implementation. Originator and beneficiary information capture and exchange protocol for transactions above the applicable threshold. Panama has no statutory Travel Rule for VASPs, but banks and counterparty VASPs apply the FATF Recommendation 16 standard.
• SAR/STR Procedures. Suspicious-activity escalation pathway terminating at the UAF. Reportes de Operación Sospechosa are filed with the UAF through its electronic submission portal; the procedure must specify escalation triggers, the timeline to filing, documentation retained, and the prohibition on tipping off.
• KYC and Client Onboarding (KYB included). Tiered onboarding procedures for individuals and corporate customers, specifying documents collected at each tier, the verification standard, source-of-funds thresholds, screening checks, and ongoing review frequency.
• Compliance Monitoring Programme. Annual review schedule and testing methodology for the AML programme: quarterly transaction-monitoring sample testing, semi-annual sanctions screening testing, annual programme review, with management-information reporting to the board.
• Data Protection Policies. Aligned with Panama’s Ley 81 of 2019 on personal data protection, regulated by Decreto Ejecutivo 285 of 2021, covering data-subject rights, the data-protection officer role, breach-notification, and cross-border data transfer arrangements.

Business Plan and Financial Projections

3-year financial projections covering revenue model, cost structure, key customer assumptions, and capital-adequacy analysis. The business plan must identify the operating jurisdictions (Panama plus operational substance jurisdictions), the customer-base geography, the product set, and the team’s track record.

Technology and Operational Documentation

IT infrastructure description, cybersecurity programme summary, custody procedures (where applicable), key management procedures (for businesses holding digital-asset keys), business continuity plan, and incident response plan. Panama does not require a DORA-equivalent ICT rulebook, so technology documentation is calibrated to banking-onboarding expectations rather than a regulator-set standard.

Costs and Pricing

Total year-1 cost for a Panama crypto setup ranges from USD 8,000 to USD 25,000, covering entity formation, resident agent, accounting, RUBF filing, AML compliance documentation, and the annual tasa única of USD 300. There is no government licensing fee because there is no licence; the cost stack is corporate and AML-readiness.

Total Cost Summary (Year 1)

Government Fees (Year 1)

Year-2 Maintenance

Year-2 maintenance is materially lower than year 1 because the compliance documentation is a one-time spend that maintains with quarterly and annual reviews. Realistic year-2 budget: USD 4,000–12,000, covering tasa única (USD 300), resident agent retainer (USD 300–1,500), accounting (USD 1,000–4,000), AML programme reviews (USD 1,500–4,000), and any Aviso de Operación recurring tax.

The honest cost-comparison reading is that Panama is materially cheaper than Cayman (where the VASP licence carries an application fee plus annual fees in the high four to low five figures USD, plus higher annual maintenance), comparable to BVI for offshore setup, and substantially cheaper than any EU MiCA CASP jurisdiction where the licence carries an application fee and annual supervision fee in the five-to-six figures EUR.

Timeline

End-to-end Panama crypto setup runs 6–16 weeks: 2–4 weeks for corporate setup and RUBF filing, 2–4 weeks for AML compliance documentation (in parallel), and 4–12 weeks for banking onboarding (the long pole). There is no regulator authorisation timeline because no licence is granted.

Experienced applicants start banking pre-qualification before incorporation is complete, because a 4–12-week banking onboarding window on top of a 2–4-week corporate setup is operationally unworkable for most businesses if run sequentially. The compliance documentation must be ready when the bank requests it, not drafted reactively.

Taxation

Panama applies a 25% corporate income tax to Panama-source income only, exempting foreign-source income under the territorial principle codified in Article 694 of the Código Fiscal. ITBMS (VAT) of 7% applies to local sales above USD 36,000 annual turnover. No specific DGI guidance on crypto income has been issued as of May 2026.

Corporate Income Tax

The standard corporate income tax rate is 25% on Panama-source taxable income (Article 699 of the Código Fiscal).^[1] Taxpayers with gross income above USD 1.5 million face an alternative minimum tax computed at 4.67% of gross taxable income; the higher of the standard liability and the alternative minimum tax applies (CAIR: Cálculo Alterno del Impuesto sobre la Renta).

The territorial principle codified in Article 694 exempts foreign-source income from Panamanian tax. For a Panama entity earning crypto trading, exchange, or treasury revenue economically generated outside Panama (e.g., through customers outside Panama, trades executed on non-Panama venues, and counterparties outside Panama), the resulting income is treated as foreign-source and not subject to the 25% rate.

The territorial principle is the substantive tax advantage Panama offers, but it is not a blanket exemption. The DGI applies a substance-and-source test: income from activities performed inside Panama is Panama-source even if the customer is foreign, and income from activities performed outside Panama is foreign-source even if the customer is Panamanian. A Panama crypto operator with Panama-resident developers and Panama-located operating substance does not get a blanket 0% rate on its foreign-customer revenue.

Other Taxes

Crypto-Specific Tax Guidance

The DGI has not issued specific public guidance on crypto income, mining income, or token issuance tax treatment as of May 2026. Crypto income earned by a Panama entity follows the general territorial framework: Panama-source crypto income is taxed at 25%; foreign-source crypto income is exempt.

The April 2025 Towerbank-Alcaldía convenio permitting voluntary municipal-tax payment in crypto (see Banking below) is a payment-mechanism arrangement, not a tax-treatment ruling.

CARF and CRS Implications

Panama signed the OECD CARF Multilateral Competent Authority Agreement on 2 December 2025 as signatory 43 on the OECD list,^[15] and the Addendum to the CRS-MCAA on the same date. First effective exchange under CARF is expected for the 2027 reporting year (2028 exchange year) under the OECD’s 67-jurisdiction commitment timeline, subject to Panama’s domestic implementation legislation.

Ongoing Compliance & Post-Registration

Panama entities maintain accounting records (Ley 52 of 2016 as amended by Ley 254 of 2021), submit accounting to the resident agent annually by 30 April, file RUBF updates within 5 business days of any beneficial-ownership change, and pay the annual tasa única of USD 300. No crypto-specific regulator reports apply.

Annual Obligations

Substance Requirements

Panama does not apply a general economic-substance regime in the way BVI or Cayman do. Substance rules apply only to entities relying on specific regimes:

• SEM (Sede de Empresa Multinacional) under Ley 41 of 2007, requiring local employees and physical presence
• EMMA (Multinational Manufacturing Services) under Ley 159 of 2020
• Treaty users (where a tax treaty’s principal-purpose test or limitation-on-benefits clause requires substance)

A generic crypto-operating Panama company that does not rely on SEM, EMMA, or treaty protection is not subject to a substance test.

Reporting Discipline in Practice

What the DGI’s published guidance does not address is the practical sequencing of accounting submission, tax filing, and resident-agent record refresh; operators new to Panama frequently miss the 30 April resident-agent submission deadline because it precedes the income-tax return deadline by 1–2 months. Building the accounting workflow to close the books by 31 March each year is the practical workaround.

Banking

Banking access for crypto businesses in Panama is restrictive in practice, although no statute prohibits it. Local Panama banks apply enhanced due diligence to crypto-facing applicants; most operators run a parallel strategy combining selective Panama banks, international EMIs, and regional Latin American banking. The dollarised system removes currency conversion friction but does not lower onboarding bars.

The Asociación Bancaria de Panamá has publicly maintained a cautious posture on crypto-business banking.^[16] Local Panama banks apply enhanced due diligence to crypto-facing applicants, often involving extended source-of-funds review, customer-base geography analysis, and AML documentation review. The de-risking reflex amplified by Panama’s historical FATF grey-listings (lifted October 2023) and EU AML high-risk listing (lifted July 2025) is fading, but local banking access for a crypto business remains binary: either the bank’s risk appetite includes the customer profile, or it does not.

One public-record exception sits inside Panama itself. On 23 April 2025, the Alcaldía del Distrito de Panamá signed a convenio with Towerbank International and its fiduciary Towertrust enabling voluntary municipal-tax payment in BTC, ETH, USDC and USDT, with conversion to USD before the funds reach the municipality.^[17] The arrangement is a municipal-payment mechanism, not a banking-onboarding doctrine; it does not signal that every Panama bank is now crypto-friendly, but it does signal that the regulatory backdrop is not hostile.

Practical Architecture

What the banking application process does not capture is the operational reality of running a Panama crypto entity day to day. Most operators rely on a multi-layer architecture rather than a single account: selective local USD accounts (USD, EUR, GBP) for tasa única, accountant fees, resident-agent retainers and Panama-source receipts; international EMIs licensed in EEA jurisdictions for working capital and customer flows; regional Latin American banking for fiat liquidity to LatAm corridors; and stablecoin treasury rails (USDC, USDT) for cross-border settlement that bypasses correspondent banking. A single-account strategy is rarely viable.

How Jagelski & Partners Helps

Through Jagelski & Partners’ partner network, businesses placed more than fourteen billion euros in client turnover across banking and EMI relationships in 2025. The network includes EMIs in EEA jurisdictions, regional Latin American banks comfortable with crypto-adjacent profiles, and specialist crypto-friendly correspondent providers. Jagelski & Partners is paid by the institution, not by the client. We do not mark up institutional banking or EMI pricing. We do not charge an onboarding fee.

For Panama, where there is no licence to present, the banking introduction itself does the underwriting, and banking access is the entire operational foundation. Which Panama banks, EEA EMIs and regional Latin American institutions will engage a crypto profile is a moving map, not a published list. Learn about our Banking service →

FATF Status & International Standing

Panama is currently clear of all major international AML watchlists. The Financial Action Task Force removed Panama from its “Jurisdictions under Increased Monitoring” list on 27 October 2023, and the European Commission removed Panama from the EU AML high-risk third-country list via Delegated Regulation (EU) 2025/1184 of 10 June 2025, published in the Official Journal on 9 July 2025.

FATF Status

Panama was placed on the FATF grey list in June 2019 following identified strategic AML deficiencies. The grey-listing prompted a multi-year remediation programme coordinated by the MEF, UAF, SBP, and Procuraduría General. Panama exited the grey list at the FATF Plenary in Paris on 27 October 2023, alongside Albania, the Cayman Islands and Jordan, on the basis that Panama had substantially completed its action plan and addressed the underlying technical and effectiveness deficiencies.^[18]

Panama remains a member of GAFILAT (the FATF-style regional body for Latin America) and is subject to GAFILAT’s mutual-evaluation cycle. As of May 2026, Panama is not under FATF increased monitoring and has not been re-listed.

EU AML High-Risk Third-Country List

Panama was listed in the EU’s high-risk third-country list under Article 9 of Directive (EU) 2015/849, referenced by Delegated Regulation (EU) 2016/1675. The European Commission tabled a delisting in March 2024, which the European Parliament initially rejected (along with Gibraltar and the UAE) on sanctions-circumvention grounds. The Commission re-tabled the delisting in June 2025; Panama was formally removed via Commission Delegated Regulation (EU) 2025/1184 of 10 June 2025, published in the Official Journal on 9 July 2025. The MEF’s official confirmation states that the Commission has announced the removal of Panama from the high-risk list.^[19]

OECD Transparency and CARF

Panama signed the OECD Multilateral Competent Authority Agreement on the Crypto-Asset Reporting Framework (CARF-MCAA) on 2 December 2025, becoming signatory 43 on the OECD list as of 3 March 2026.^[15] Panama signed the Addendum to the CRS-MCAA on the same date. First effective CARF exchange is expected for the 2027 reporting year subject to domestic implementation legislation.

EU Market Access

A Panama crypto entity does not confer EU passporting rights. MiCA contains no third-country equivalence regime; there is no mechanism for the European Commission to recognise a non-EU licence as equivalent to a MiCA CASP authorisation. MiCA Article 61 permits third-country firms to serve EU clients only when the client initiates contact entirely on their own initiative. ESMA’s “Guidelines on reverse solicitation under MiCA” (ESMA35-1872330276-2030, applicable from 27 April 2025) interpret this exemption restrictively: any form of EU-targeted marketing, EU-language website content, geo-targeted advertising, app-store availability in EU markets, or use of EU-based influencers constitutes solicitation that voids the exemption.^[20] The exemption is designed for isolated contacts, not systematic EU market access. For a detailed analysis of what constitutes solicitation and the documentation requirements, see Reverse Solicitation Under MiCA →.

Advantages and Limitations

Panama trades regulatory institutional weight for cost, speed, and territorial-tax efficiency. The advantages are real for operators whose customers and substance sit outside Panama; the limitations matter most for operators needing a regulator-issued authorisation for institutional counterparty or EU market access.

• ✓ No dedicated crypto licence required. No application fee, no minimum capital threshold, no regulator-set timeline, no fit-and-proper review.
• ✓ Territorial tax system. Foreign-source income is exempt from Panamanian corporate tax under Article 694 of the Código Fiscal. Panama-source income is taxed at 25%.
• ✓ USD as legal tender. No currency conversion friction; the entire correspondent banking and accounting infrastructure runs in USD.
• ✓ Fast and inexpensive setup. 2–4 weeks end-to-end for entity formation and corporate filings; total year-1 cost USD 8,000–25,000.
• ✓ FATF and EU AML clear. Removed from FATF grey list October 2023; removed from EU AML high-risk list July 2025. International correspondent banking relationships have largely normalised post-delisting.
• ✓ CARF and CRS participation. Panama is signatory to both the CRS-MCAA Addendum and CARF-MCAA (December 2025), aligning with the OECD transparency standard that institutional counterparties expect.
• × No regulator-issued authorisation. Counterparties and institutional investors who require a regulator-issued crypto authorisation will find Panama insufficient. Mitigation: structure Panama as the operating or treasury layer alongside a regulator-issued authorisation in another jurisdiction (Cayman VASP for institutional custody; Estonia MiCA CASP for EU CASP scope; El Salvador CNAD PSAD for the Latin American institutional buyer).
• × No EU passporting. A Panama entity cannot market crypto-asset services to EU clients without breaching MiCA. Mitigation: Operators targeting EU clients can obtain a separate CASP authorisation in an EU member state (full market access via passporting) or, for isolated genuinely unsolicited contacts only, may fall within the narrow reverse solicitation exemption under MiCA Article 61.
• × Local banking access is restrictive. Panama banks apply enhanced due diligence to crypto applicants; account opening can fail on customer-base geography or sector grounds. Mitigation: pre-qualify across the Jagelski & Partners banking network before incorporating, and plan a multi-layer banking architecture from day one (selective Panama account, international EMI, regional LatAm bank, stablecoin rails).
• × Legislative uncertainty. PL 247 (or a successor) may pass and create a regulatory regime that retroactively requires AML, capital, or supervisory upgrades. Mitigation: build the AML compliance documentation to FATF Recommendation 15 standard from day one, regardless of current statutory obligation, so any future authorisation regime can be entered without restructuring.
• × Reputational distance. Panama still carries reputational weight from the 2016 Panama Papers and historical AML listings, even though both lists are cleared. Some institutional counterparties retain a “Panama policy” that excludes Panama-domiciled entities. Mitigation: position Panama as a structuring or treasury jurisdiction, with operating substance and customer-facing brand located elsewhere; for institutional fund-raises, lead with the substance jurisdiction, not the holding entity.

How Panama Compares

Panama, Costa Rica, El Salvador and the Cayman Islands form a four-jurisdiction Central American and Caribbean cluster with sharply different regulatory postures. Panama and Costa Rica share the no-dedicated-licence posture; El Salvador has a real CNAD-led licensing regime; Cayman has the institutional-weight VASP Act. Estonia anchors the EU-MiCA comparison.

Compare every crypto jurisdiction side by side →

The Panama-Costa Rica comparison is the closest peer pair on the matrix. Both jurisdictions sit in the regulatory-status-and-structuring quadrant rather than the licence-acquisition quadrant. The differentiator is geography and infrastructure: Panama runs on USD as legal tender; Costa Rica runs on the colón with USD as a parallel currency, and has Bill 22.837 advancing through first debate (1 July 2025).

The El Salvador comparison flips the framing. El Salvador’s Ley de Emisión de Activos Digitales (LEAD), in force since 1 February 2023, creates a real PSAD/PSB authorisation regime supervised by the CNAD; more than 70 digital-asset service providers have been licensed.^[21] For operators wanting a real Latin American authorisation, El Salvador is the credible peer; Panama is the lighter-touch operating layer.

When Panama Is the Right Choice

Choose Panama if:

• Your operating substance, customer base, and counterparties sit outside Panama
• USD-denominated structure is operationally important
• A regulator-issued authorisation is not required by your institutional counterparties
• You want the territorial-tax efficiency without the cost of a regulated jurisdiction
• You can wait for PL 247 (or a successor) to settle the regulatory question rather than pre-committing to a regime

Consider alternatives if:

• Institutional custody at scale is required, consider Cayman VASP (Phase 2 licence in force since 1 April 2025)
• Material EU customer base is intended, consider Estonia MiCA CASP (full passporting to 30 EEA states)
• A regulator-issued LatAm authorisation matters for institutional credibility, consider El Salvador CNAD (PSAD/PSB licences under LEAD)
• Costa Rica’s similar profile is preferred for geography or banking access, consider Costa Rica crypto regulation

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Common Mistakes in Panama Applications

Panama’s common mistakes are different from licensed-jurisdiction common mistakes because there is no application to a regulator. The errors operators most often make are mis-reading the territorial tax test, under-investing in compliance documentation, treating reverse solicitation as a viable EU strategy, and missing the 30 April resident-agent accounting deadline.

• Treating territorial tax as a blanket exemption. Operators assume that incorporating in Panama automatically means 0% tax. Under the DGI substance-and-source test (see Taxation above), a Panama crypto operator with Panama-resident developers, Panama-located management, or Panama-based customer-support generates Panama-source income on the portion of revenue attributable to those activities.
• Under-investing in compliance documentation because no regulator reviews it. Banks and EMIs read the AML manual, enterprise-wide risk assessment, and KYC/KYB procedures even though no Panama regulator does. Operators who treat compliance documentation as a low-priority work item find their banking applications stall at the documentation-review stage, sometimes 6–10 weeks into the process.
• Treating MiCA Article 61 reverse solicitation as a primary EU market-access strategy. Reverse solicitation is an exemption for isolated client-initiated contacts, not a marketing channel. Operators who direct EU-language marketing, EU-targeted advertising, or EU-based influencer programmes at EU prospects and then claim reverse solicitation when an EU customer signs up are exposed to MiCA enforcement and ESMA referral. The exemption is designed for the customer who finds you by themselves, not for the customer you found through a campaign.
• Missing the 30 April resident-agent accounting submission deadline. Ley 254 of 2021 requires every Panama entity to submit accounting records to its resident agent by 30 April of the following year. Operators frequently miss this because it precedes the income-tax return deadline. Penalties run from USD 5,000 to USD 1,000,000.
• Ignoring PL 247 risk in long-horizon planning. A Panama crypto structure built today assumes the regulatory landscape stays as-is. If PL 247 (or a successor) passes in 2026 or 2027 and enacts a VASP authorisation regime, existing operators may need to apply for the new authorisation within a transition window. Operators who built compliance documentation only to the minimum banking-onboarding standard find themselves underprepared for a full regulator submission.
• Confusing Panama with Panama Papers reputation. Some institutional counterparties retain blanket “Panama policies” that exclude Panama-domiciled entities, even post-delisting. Operators who lead institutional conversations with the Panama holding entity rather than the operating substance jurisdiction find the conversation closing before the merits are heard.

Frequently Asked Questions

References