Panama Compliance Report

Generated 2026-09-22

Restrictive

Regulatory Overview

Regulatory Status: Legal but heavily constrained — banking bans, trading limits, capital controls
Key Regulator(s): Ministry of Commerce and Industries, Superintendency of Banks of Panama, Bank of Panama
Primary Legislation: Be incorporated under Panamanian law (Public Registry)., URL for Law 23 of 2015 (Spanish): Link to Gaceta Oficial for Ley 23 de 2015 (Thi, URL for Law Decree 1 of 1999 (Spanish): Link to Gaceta Oficial for Decreto Ley 1, Decreto Ley No. 2 de 2008, que regula la actividad bancaria en Panamá, Entities likely fall under Law 23 of 2015., a Panamanian lawyer or law firm, Engage a Panamanian law firm to incorporate a company (e.g., a Sociedad Anónima, The National Council for Accreditation (CNA), created by Law 23 of July 15, 1997, Law 93 of 2019, regulated by Decree 840 of 2020, Executive Decree 722 of October 2020 created a Qualified Investor visa requiring, Panama's general standards framework, overseen by DGNTI and COPANIT under Law 23
Travel Rule: Adopted — Threshold: Implemented
Tax Reporting: Foreign-Sourced Capital Gains: For individuals and businesses resident in Panama, capital gains derived from the trading or sale of cryptocurrencies on foreign exchanges or with non-Panamanian counterparties are generally considered foreign-sourced income. Under the territorial tax system, these gains are not subject to capital gains tax in Panama. This is the most common scenario for crypto investors in Panama.. Panamanian-Sourced Capital Gains: If, theoretically, a capital gain from cryptocurrency could be definitively proven to originate from a source within Panama (e.g., selling crypto through a Panamanian-regulated exchange to a Panamanian counterparty, if such infrastructure existed and was deemed Panamanian-sourced), then it could potentially be subject to general capital gains tax rules.. For the sale of real estate or certain securities within Panama, the capital gains tax rate is typically 10%. However, it is highly unlikely that cryptocurrencies would be uniformly classified as "securities" for this purpose without specific legislation.. General Business Income: If an entity's primary business activity is high-frequency crypto trading within Panama, any profits might be classified as regular business income rather than capital gains, and taxed under corporate income tax rules (see below).. Conclusion: In practice, most crypto capital gains for Panamanian residents are tax-exempt due to the territorial principle.

Key Facts

aml Law 23 of April 27, 2015 (Ley 23 de 27 de abril de 2015): This is the foundational AML/CFT law in Panama. It adopted measures to prevent money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction. It established the Financial Analysis Unit (UAF) and defined "obligated subjects" (sujetos obligados), which, through subsequent interpretations and amendments, have come to include VASPs. This law sets general obligations for customer due diligence, suspicious transaction reporting, and record-keeping. Executive Decree 44 of April 15, 2016 (Decreto Ejecutivo N° 44 de 15 de abril de 2016): This decree complements Law 23, providing detailed regulations for its application, including specific procedures for due diligence, risk assessment, and internal controls for obligated subjects. Law 1 of January 5, 2024 (Ley No. 1 de 5 de enero de 2024): This is the most crucial and recent piece of legislation specifically for virtual assets. It amends Law 23 of 2015 and other related laws to define virtual assets and virtual asset service providers (VASPs), establish a licensing and supervision regime, and explicitly subject VASPs to AML/CFT obligations under the supervision of the Superintendency of Banks of Panama (SBP). This law ensures Panama's compliance with FATF Recommendation 15 on new technologies and VASPs. Role: With the enactment of Law 1 of 2024, the SBP is now the primary regulatory and supervisory authority responsible for the licensing, authorization, and oversight of VASPs in Panama. This includes ensuring their compliance with AML/CFT requirements, operational standards, and consumer protection. Role: The UAF is Panama's Financial Intelligence Unit (FIU). It is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other relevant financial intelligence to combat money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction. VASPs, as obligated subjects, must report suspicious activities directly to the UAF. For Individuals: Obtaining and verifying the identity of the customer and beneficial owner (if different from the customer) using reliable, independent source documents, data, or information (e.g., government-issued ID, passport, proof of address). For Legal Entities/Arrangements: Obtaining and verifying the legal name, legal form, proof of existence, powers that regulate and bind the entity, names of relevant persons (directors, partners), and the identity of beneficial owners (those ultimately owning or controlling more than a specified percentage, typically 10% or 25%). Understanding the Purpose and Nature of the Business Relationship: Gathering information on the customer's financial activities, expected transaction types, and the source of funds/wealth.
custody Custodial license requirements for digital assets. Segregation of client assets rules for digital assets. Insurance or bonding requirements for digital asset custodians. Cold storage mandates for digital asset custodians. A formal definition of "qualified custodian" for digital assets. Panama has a robust AML/CFT framework, primarily driven by international standards from the Financial Action Task Force (FATF). Law 23 of 2015 (Ley 23 de 2015): This law adopts measures to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction. While it doesn't explicitly mention "digital asset custody," financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) are subject to its requirements. If a crypto business falls under the scope of a DNFBP (e.g., as a money remitter, trust provider, or even a general financial service provider handling significant value transfers), it would need to comply with KYC (Know Your Customer), transaction monitoring, and suspicious activity reporting requirements. Unidad de Análisis Financiero (UAF - Financial Analysis Unit): This is Panama's Financial Intelligence Unit (FIU) responsible for receiving, analyzing, and disseminating suspicious transaction reports. Any crypto entity engaging in activities that might be considered financial services or value transfers could fall under UAF scrutiny for AML/CFT purposes.
enforcement Evolving Regulatory Framework: Panama has been discussing comprehensive cryptocurrency regulation, most notably with Bill 697, which was partially vetoed in 2022. This lack of a clear, dedicated crypto legal framework means that enforcement would likely fall under existing general financial laws (e.g., anti-money laundering, fraud), making it harder to categorize specifically as "crypto enforcement." Focus on AML/CFT: Panama was on the FATF grey list until October 2023, which heavily emphasized improving its Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regime. While this pressure indirectly affects crypto (as it's a known vector for financial crime), direct, high-profile enforcement actions against crypto entities with specific fines haven't been widely publicized as a result. Publicity Practices: Panamanian financial regulators (like the Superintendencia de Bancos de Panamá - SBP, or Superintendencia del Mercado de Valores - SMV, or the Unidad de Análisis Financiero - UAF) may not always publicize enforcement actions with the same level of detail as regulators in jurisdictions like the United States or Europe. Criminal investigations would fall under the Ministerio Público (Public Ministry), and details are often restricted during ongoing proceedings. Regulator Name: Superintendencia de Bancos de Panamá (SBP) - Banking Superintendent of Panama Entity Targeted: Financial institutions under its supervision, and the general public. Violation Type (Implied): Operating without proper licensing for financial services involving crypto, and general financial risk to consumers. Penalty Amount: Not applicable (these are warnings, not direct fines). Date: Ongoing, but prominent warnings were issued in 2022 and 2023. Outcome: Increased awareness among regulated entities and the public about the risks and the SBP's stance that crypto activities are not regulated by them and do not carry deposit insurance. The SBP has repeatedly issued statements clarifying that cryptocurrencies are not legal tender in Panama, are not regulated by the SBP, and entities under its supervision (banks) should exercise extreme caution and assess risks related to crypto assets. They have warned against financial institutions engaging in crypto activities without proper risk management and adherence to existing AML/CFT regulations.
licensing No Crypto-Specific Licensing Regime: As of late 2023 / early 2024, there is no specific "virtual asset license" in Panama issued by a dedicated crypto regulator. General Business Registration: Any company wishing to operate in Panama, including those involved in virtual assets, must still: Be incorporated under Panamanian law (Public Registry). Obtain a business license ("Aviso de Operación") from the Ministry of Commerce and Industries. Comply with general tax and labor laws. Primary Relevance: This is the most likely regulator to assert jurisdiction over virtual asset activities, mainly for AML/CFT compliance. Panama is a member of the Financial Action Task Force (FATF) and is committed to implementing its recommendations, which include regulating VASPs for AML/CFT purposes. Applicability: Exchanges, custody providers, and payment processors dealing with virtual assets are highly likely to be considered "Designated Non-Financial Businesses and Professions" (DNFBPs) or fall under an extended interpretation of "financial activities" for AML purposes. Requirement: While not a "license," these entities would need to register with the SSNF for AML/CFT oversight and comply with all associated requirements.
securities Panama has enacted Law 697 of 2021, which regulates commercial activities involving virtual assets, marking the first comprehensive legal framework for cryptocurrency in the country. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF... The law establishes a regulatory framework but does not create a specific licensing regime for virtual asset service providers as of 2025–2026, leaving the practical implementation incomplete. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF... No dedicated securities regulator has been formally empowered to oversee digital asset securities, and no specific securities licensing regime for crypto exists under Panamanian law. asamblea.gob.pa/legispan-2 There is no evidence that any entity has been licensed to conduct digital asset securities activities in Panama as of the current date. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF... The practical reality is that while legislation exists on paper, the regulatory infrastructure and enforcement mechanisms for virtual asset securities in Panama remain largely undeveloped and unproven. asamblea.gob.pa/legispan-2 The primary legislative instrument is Law 697 of 2021, officially titled "Que regula las actividades comerciales y los servicios de activos virtuales" (Which regulates commercial activities and virtual asset services), published through the Asamblea Nacional de Panamá. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF... The law was introduced as Bill 696 during the 2020–2021 legislative period, reflecting Panama's initial attempt to establish statutory recognition of virtual assets in commercial transactions. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF... The Asamblea Nacional de Panamá (National Assembly) serves as the legislative body that proposed and debated this framework, with the full legislative tracking available through the LEGISPAN system. asamblea.gob.pa/legispan-2
status Panama has no dedicated crypto-asset regulator; the Ministry of Commerce and Industry (MICI) oversees general business and investment promotion, including the Directorate of Investment Attraction and the Export and Investment Promotion Authority (PROPANAMA), established by Law 207 of April 2021, but neither is empowered to regulate virtual assets. Panama - United States Department of State The Directorate General of Standards and Industrial Technology (DGNTI), under MICI, established under Law 23 of July 15, 1997, sets product standards and technical regulations in Panama but has not issued any standards specific to crypto or blockchain technology. Panama - Trade Standards The National Council for Accreditation (CNA), created by Law 23 of July 15, 1997, handles accreditations for laboratories, inspection organizations, and certifying organizations; as of September 2021, 62 organizations had been accredited, but none are in the crypto/Web3 space. Panama - Trade Standards Panama is a WTO member and implements the WTO Agreement on Technical Barriers to Trade, including the Code of Good Practice for the Preparation, Adoption, and Application of Standards. Panama - Trade Standards Panama was removed from the FATF Grey List in October 2023, and in June 2025 the European Commission recommended removing Panama from its list of countries with strategic deficiencies in AML/CFT. Panama - United States Department of State Panama's customs system is governed by the Dirección General de Aduanas, which administers import duties on an ad valorem basis using the declared CIF value, and customs classification follows the Harmonized System adopted in 1995; there is no specific customs framework for digital or virtual assets. Panama - Customs Regulations No licensing regime exists specifically for crypto asset service providers, exchanges, or Web3 businesses in Panama; no government agency has published a framework for such licenses. Panama - United States Department of State No entity has been granted a crypto-specific license in Panama because no such licensing mechanism exists. Panama - United States Department of State
tax Foreign-Sourced Capital Gains: For individuals and businesses resident in Panama, capital gains derived from the trading or sale of cryptocurrencies on foreign exchanges or with non-Panamanian counterparties are generally considered foreign-sourced income. Under the territorial tax system, these gains are not subject to capital gains tax in Panama. This is the most common scenario for crypto investors in Panama. Panamanian-Sourced Capital Gains: If, theoretically, a capital gain from cryptocurrency could be definitively proven to originate from a source within Panama (e.g., selling crypto through a Panamanian-regulated exchange to a Panamanian counterparty, if such infrastructure existed and was deemed Panamanian-sourced), then it could potentially be subject to general capital gains tax rules. For the sale of real estate or certain securities within Panama, the capital gains tax rate is typically 10%. However, it is highly unlikely that cryptocurrencies would be uniformly classified as "securities" for this purpose without specific legislation. General Business Income: If an entity's primary business activity is high-frequency crypto trading within Panama, any profits might be classified as regular business income rather than capital gains, and taxed under corporate income tax rules (see below). Conclusion: In practice, most crypto capital gains for Panamanian residents are tax-exempt due to the territorial principle. Foreign-Sourced Income: Similar to capital gains, income earned in cryptocurrency from sources outside Panama (e.g., mining rewards from a global network, staking rewards from foreign pools, salaries paid in crypto by foreign employers, profits from crypto businesses operating exclusively with foreign clients/servers) is generally considered foreign-sourced income and is not subject to Panamanian income tax. Panamanian-Sourced Income: If cryptocurrency is earned as income from a source within Panama, it would be subject to standard Panamanian income tax rules. Up to USD 11,000: Exempt
travel rule No specific, comprehensive law for virtual assets and VASPs fully implementing the Travel Rule has been adopted and made effective. There was a significant legislative attempt: Law 69 of 2022 (Proyecto de Ley 697), which aimed to regulate the commercialization and use of crypto assets and issue specific provisions for VASPs. This law would have incorporated FATF standards, including potentially aspects of the Travel Rule. Status of Law 69/2022: This law was vetoed by the President of Panama in June 2022, primarily due to concerns about its scope, regulatory framework, and potential implications for financial stability and existing AML/CFT efforts. This means it did not become law. Current Situation: In the absence of specific crypto legislation, existing general AML/CFT laws (like Law 23 of 2015) and regulations may apply to activities involving virtual assets if they fall under the definition of financial services or other regulated activities, but this application is often indirect and does not fully address the Travel Rule's specific requirements for VAs. Since a dedicated law has not been adopted, there is no specific effective date for the Travel Rule for VASPs in Panama. Existing AML/CFT regulations have their own effective dates, but they are not tailored for the VASP Travel Rule. Without specific VASP legislation, there are no specific threshold amounts established for the Travel Rule in Panama. General AML/CFT thresholds for reporting suspicious transactions or cash transactions in traditional financial services (e.g., typically above USD 10,000 for cash transactions) exist under Law 23 of 2015, but these are not directly applicable to the Travel Rule for VAs.

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-06. View full profile