PANAMA Law and Practice Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain Blockchain-related projects are increasingly viewing Panama as a jurisdiction where they can innovate in a legal environment that is not yet specifically regu- lated. In practice, this means using existing corporate, commercial, tax, intellectual property, and compliance frameworks to structure operations while the coun- try continues to consider a dedicated virtual assets regime. Over the past 12 months, market practice has become more sophisticated. Projects are no longer focused only on whether a token can be issued from Panama. They are now looking at how a Panamanian structure can support a platform front end, hold and manage treasury assets, own and license intellectual prop- erty, contract with development companies, docu- ment service arrangements, and interact with users, exchanges, banks, neobanks, and local or offshore service providers. The most common use cases currently being evalu- ated include real-world asset tokenisation, platform front ends, protocol treasuries, intellectual property holding and licensing structures, prediction markets, and vault management structures, including mod- els through which institutional players interact with decentralised finance. A structure increasingly seen in practice uses a Pana- manian private interest foundation as the top vehicle for treasury, and governance-sensitive assets, as well as intellectual property, with Panamanian corporations acting as token issuers and platform or front-end operators. A separate development company then builds and maintains the technology under a devel- opment or services agreement. This model allows the foundation to hold treasury and intellectual property assets, while the operating companies and develop- ers perform commercial functions. A notable recent development is the entry of more specialised service providers with real operation- al capacity, including legal, accounting, corporate
administration, compliance, anti-money laundering, treasury support, banking co-ordination, and tech- nical development providers. This has also encour- aged a move away from purely nominee director- based governance. The use of independent directors with experience in blockchain, financial technology, treasury, compliance, and cross-border platform risk has expanded, helping to strengthen decision-mak- ing, banking credibility, economic substance, board records, risk oversight, and regulatory defensibility. The main issues likely to affect blockchain use in Panama over the next 12 months are uncertainty over the future regulation of virtual asset service provid- ers (VASPs) and the implementation of Panama’s new economic substance regime under Law No 526 of 28 May 2026, “which modifies and adds provisions to the Tax Code relating to income tax and economic substance for certain foreign-source passive income”. Law 526 applies to entities incorporated or domiciled in Panama that form part of a multinational group and obtain foreign-source passive income, including dividends, interest, royalties, capital gains, real estate capital income and other movable-capital income. For blockchain structures, this may affect holding, treasury, intellectual-property, licensing, token-rights and foundation/SPV arrangements where Panama is used to receive or manage passive foreign-source income but the structure lacks adequate local sub- stance, including qualified human resources, prem- ises, local strategic decision-making, risk assumption, operational expenses, governance records, service- provider oversight and Panama-based management or control. Non-compliant entities may be treated as non-qualified entities and, exceptionally, become sub- ject to a 15% tax on net taxable foreign-source pas- sive income. On the securities side, the Superintendency of the Securities Market ( Superintendencia del Mercado de Valores , or SMV) continues to take a fact-specific approach. The relevant question is not whether block- chain is used, but whether the activity involves a secu- rity, public offering, intermediation, custody, invest- ment management, brokerage, advisory service, or other regulated securities-market activity. The latest relevant development is SMV Opinion No 01-26 of 29 April 2026 on prediction markets, where the SMV
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