PANAMA Law and Practice Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
the current regulated perimeter or structured to avoid triggering an existing licence. 3.2 Set-Up Requirements Panama does not currently have a dedicated crypto- asset or VASP licence. A business does not need a licence simply because it uses blockchain, issues a regular token, operates a non-custodial interface, or provides software infrastructure. Licensing depends on whether the activity falls within an existing regu- lated sector. If the activity involves securities, financial instruments, public offerings, brokerage, investment advice, custo- dy of securities, investment funds, derivatives or mar- ket infrastructure, the SMV may be relevant. A regular crypto token is not, by itself, a security or financial instrument, but regulated securities activity carried out “in or from Panama” may require licensing. Investment funds may also fall under the SMV regime if publicly offered in Panama or managed “in or from Panama”. However, private fund structures may be available where investors are limited, offers are made privately, or participation is restricted to qualified investors. The SBP becomes relevant where the business accepts deposits, captures public funds, conducts banking activity, acts as fiduciary, or provides regu- lated trust services. Remittance rules may also apply where funds are received for transmission to third par- ties. These licences are more demanding and gen- erally involve fit-and-proper review, local operational capacity, compliance systems, governance, capital and ongoing supervision. If the product involves games of chance or activities that originate bets, including online betting, the Junta de Control de Juegos may require authorisation or a contract, together with suitability, financial, opera- tional and reporting requirements. For unregulated crypto projects, there are no crypto- specific substance, local personnel or prudential capi- tal requirements. The baseline obligations are corpo- rate and compliance-related: resident agent, annual franchise tax, corporate books, accounting records,
beneficial ownership filings, board approvals and source-of-funds documentation. 3.3 Change of Control Panama does not currently have a dedicated licence for digital asset firms. 3.4 Passporting Panama is not part of a regional passporting system, a licence granted by a Panamanian regulator authorises the relevant activity only within the scope of Panama- nian law. As a general rule, foreign crypto-asset service provid- ers may provide services into Panama without obtain- ing a local licence, provided they do not carry out a regulated activity in or from Panama. This follows from Article 18 of the Constitution, under which private par- ties may generally do what the law does not prohibit, while authorities may only act within powers granted by law. A foreign exchange, brokerage platform, wallet pro- vider or other crypto business may therefore serve Panamanian users if the activity does not involve securities, financial instruments, banking, remittance, fiduciary services, gambling or another regulated activity. The SMV has taken the position that ordinary crypto-assets are not automatically securities, money or electronic currency, and the SBP has stated that cryptocurrency exchange, purchase, sale and com- mercialisation activities are not, as such, within its supervisory scope. 4. Cross-Border Services 4.1 Marketing Panama has not formally codified a “reverse solicita- tion” doctrine. In practice, however, the concept is relevant: the risk is lower where a Panamanian cli- ent accesses a foreign platform on its own initiative, without targeted marketing, local solicitation, local representatives, local onboarding, or regulated activ- ity being conducted from Panama. The risk increases if the foreign provider actively promotes services in Panama, uses Panama-based personnel, maintains
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