PANAMA Law and Practice Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
a local office, targets Panamanian residents, or per- forms regulated functions from Panama. 4.2 White Labelling In Panama, an operator cannot simply “borrow” or rent another entity’s licence through a white-label arrangement. A white-label model may be used for technology, branding, outsourcing, or distribution, but it does not allow an unlicensed firm to conduct regu- lated activity in Panama in its own name. Where the activity is regulated, the licensed entity must remain the real operator: contracting with clients where required, controlling onboarding and compli- ance, supervising outsourced functions, maintaining records, and remaining accountable to the regulator. The unlicensed party should be limited to technology, branding, referral, or operational support, unless it is separately licensed. In securities matters, the SMV will look at substance over form. If a foreign or unlicensed party is effectively performing brokerage, dealing, order routing, place- ment, advisory, custody, or similar services from Pan- ama, a licensing issue may arise even if the structure is labelled as “white-label”. For crypto, using an SMV-regulated securities firm as a white-label channel is sensitive where the crypto activity falls outside the firm’s authorised securities business. For online gaming, the position is stricter: a foreign operator cannot rely on another operator’s licence to offer or operate games in Panama. DeFi is not currently subject to a specific licensing, registration, or supervisory regime in Panama. Under the principle of legality, activities not expressly pro- hibited are generally permitted, and Panamanian law does not prohibit or specifically regulate the develop- ment, deployment, or use of DeFi protocols. Accordingly, non-custodial DeFi activities such as lending, borrowing, decentralised exchanges, swaps, vaults, staking, liquidity provision, and similar pro- 5. Decentralised Finance 5.1 Ability to Use DeFi
tocol-based models may generally be operated or accessed from Panama without authorisation from a financial regulator. This is consistent with the SMV’s position that crypto-assets, as such, are not securities or securities instruments. The analysis changes if the token or product is, in substance, a security, derivative, investment product, or gambling-adjacent activity. In those cases, securi- ties, gaming, AML, consumer, tax, or foreign-law rules may become relevant. CeFi platforms require a more careful analysis because they may involve custody, fiat on/off ramps, broker- age, exchange, derivatives, lending, staking, or yield- generating services. While Panama does not cur- rently have a dedicated crypto-asset service provider regime, the business model, client base, flow of funds, custody structure, and marketing must be reviewed to confirm whether any licensing, AML, banking, securi- ties, gaming, or foreign regulatory exposure arises. 5.2 DeFi Structures DeFi structures are permitted in Panama provided the project does not carry out a regulated activity such as securities intermediation, investment advice, cus- tody of securities, banking, remittance, fiduciary ser- vices or gambling. There is no DeFi-specific licence, registration regime, capital requirement or substance requirement. The most common structure uses a Panamanian Pri- vate Interest Foundation as the top vehicle to hold treasury assets, intellectual property and governance- sensitive rights. The foundation is useful because it has separate legal personality, no shareholders and a separate patrimony, making it suitable as a legal wrap- per for protocol governance or DAO-style arrange- ments. Panamanian corporations are also commonly used as operating companies, front-end operators or token issuance vehicles. A corporation may run the website or interface, publish Terms of Use and Privacy Policy, contract with service providers, collect interface or subscription fees, or act as the token issuer under private sale documentation.
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