How to get a crypto license in Panama step-by-step

If you are a crypto founder looking for a straightforward, cost-effective licensing route, Panama offers one of the most accessible frameworks. This guide explains how to get a crypto license in Panama step-by-step, covering costs, timeline, and compliance. Consulting24 has obtained over 500 crypto licenses globally and delivers directly in Panama, Estonia, and Lithuania, while advising on other jurisdictions.

Panama's crypto license is not a MiCA-authorised regime but a bespoke service provider licence under the Panama Financial Innovation Law (Law 697 of 2023). It allows virtual asset service providers (VASPs) to operate legally from Panama with a flat fee of EUR 6,000. There is no minimum capital requirement, and foreign-sourced income is tax-exempt. This makes Panama an attractive hub for crypto exchanges, payment processors, and wallet providers.

Below we break down every step, from eligibility to banking, so you can decide if Panama fits your business. For personalised advice, contact Consulting24 via WhatsApp or book a consultation.

What is a Panama crypto license?

The Panama crypto license, officially a 'Virtual Asset Service Provider (VASP) License', is issued by the Panama Financial Innovation Authority (AFIP) under Law 697. It regulates entities that exchange, transfer, custody, or issue virtual assets. Unlike EU MiCA licences, Panama imposes no minimum capital and offers a flat EUR 6,000 fee. The license is valid for two years and renewable. It covers services like crypto-to-fiat exchange, wallet custody, and token issuance (subject to securities law).

Panama is not a member of the EU, so its regime is independent of MiCA. This gives flexibility but also means no passporting rights. However, for founders targeting Latin American markets or seeking a tax-efficient base, Panama is a top choice. Consulting24 handles the full application process, from company setup to license submission. The license is designed for businesses that want a simple, low-cost regulatory framework without the heavy capital demands of Europe.

Who needs a Panama crypto license?

Any business offering virtual asset services to Panamanian residents or operating from Panama needs this license. Typical applicants include:

• Crypto exchanges (centralised or peer-to-peer)
• Payment processors handling crypto transactions
• Wallet providers (custodial and non-custodial)
• Token issuers (if tokens are not securities)
• OTC desks and brokerage services

If your business model involves holding customer funds, facilitating transfers, or exchanging crypto for fiat, you likely need a VASP license. Panama does not license mining or software development per se, but if you offer related services like mining pools or staking-as-a-service, you should check with AFIP. Consulting24 can help you determine if your activities are licensable. For example, a crypto ATM operator would need to confirm if the license covers physical kiosks, as AFIP may require a separate permit.

License type and regulator

The regulator is the Panama Financial Innovation Authority (AFIP), created under Law 697. The license is a single category: Virtual Asset Service Provider (VASP). There are no sub-classes like in Lithuania or Estonia. However, the scope of activities must be clearly defined in the application. AFIP assesses each case based on business model, AML/CFT policies, and beneficial ownership.

Panama does not have a separate exchange license; the VASP license covers exchange, transfer, custody, and issuance. If you plan to offer derivatives or securities tokens, you may need additional registration with the Panama Securities Commission. Consulting24 advises on such overlaps. AFIP is known for a pragmatic approach, but it expects thorough documentation. The regulator also collaborates with the Financial Action Task Force (FATF) to ensure compliance with international standards.

Cost and timeline

The total cost for the license itself is EUR 6,000 flat, as per the brief. Additional costs include company incorporation (around EUR 1,500-2,500) and legal/compliance documentation (EUR 3,000-5,000). The timeline from company setup to license approval is typically 3-5 months, depending on AFIP's workload and the completeness of your application. Ongoing costs include annual compliance (AML officer, audits) and license renewal every two years (fee not yet published, but estimated EUR 3,000-5,000). Consulting24 provides transparent pricing with no hidden fees. For a precise quote, contact us.

Capital requirement

Panama imposes no minimum capital requirement for a VASP license. This is a major advantage compared to EU jurisdictions: Lithuania requires EUR 125,000 for exchange services, Estonia EUR 12,000-100,000, and MiCA member states EUR 50,000-150,000. Panama's zero-capital policy reduces the initial financial burden. However, you must demonstrate sufficient operational funds to cover AML compliance, IT security, and business continuity. Consulting24 recommends a minimum paid-up capital of EUR 10,000-20,000 to satisfy AFIP's substance requirements, but this is not a legal minimum. In practice, AFIP expects that the company has enough resources to operate for at least six months without revenue. This can be shown through a business plan and bank statements.

Tax treatment

Panama operates a territorial tax system. Income earned outside Panama is tax-exempt. For crypto businesses, this means that revenue from non-Panamanian clients is not subject to corporate income tax. There is no capital gains tax on crypto trades, and no VAT on digital services. However, income sourced within Panama (e.g., from Panamanian residents) may be taxed at 25%. Most crypto licenses target international clients, so the tax advantage is significant. Consulting24 advises structuring your business to maximise territorial benefits. Note: Panama has no tax treaty network, so withholding taxes may apply on outbound payments. You must still file annual tax returns, even if no tax is due. The tax year ends December 31, and returns are due by March 31.

Allowed activities

Under the VASP license, you may conduct the following activities:

• Exchange between virtual assets and fiat currencies
• Exchange between one or more forms of virtual assets
• Transfer of virtual assets (on behalf of clients)
• Custody or administration of virtual assets
• Participation in and provision of financial services related to an issuer's offer or sale of virtual assets

Activities not covered include issuing securities tokens (requires securities license), operating a crypto ATM network (may require additional permit), and providing lending/borrowing platforms (likely requires banking license). Consulting24 can help you scope your activities precisely. For instance, if you plan to offer staking as a service, you need to confirm whether AFIP considers it custody or a separate service. The license also does not cover derivatives or margin trading; those would fall under securities regulation.

Step-by-step process

1. Company incorporation: Register a Panama corporation (Sociedad Anónima) with a local registered agent. Consulting24 handles this. You need at least three directors (can be same person) and a resident agent. The company must have a physical address in Panama.
2. Document preparation: Draft AML/KYC policies, business plan, risk assessment, and organisational structure. Must comply with FATF standards. The AML policy must detail customer due diligence, transaction monitoring, and record-keeping procedures.
3. Appointment of local representatives: You need a local AML officer and a legal representative in Panama. Consulting24 can recommend providers. The AML officer must be a Panama resident with relevant experience.
4. Submit application: File the license application with AFIP, including all documents and the EUR 6,000 fee. The application must include a sworn statement of beneficial ownership.
5. Due diligence: AFIP conducts background checks on directors, shareholders, and beneficial owners. Expect requests for additional information. This can take 4-8 weeks.
6. Approval and issuance: If approved, you receive a license valid for 2 years. You must then maintain compliance and submit periodic reports. The license must be renewed before expiry.

The entire process takes 3-5 months. Consulting24 manages each step, from company setup to liaison with AFIP.

Banking and payments

Opening a bank account for a Panama crypto company can be challenging due to de-risking by traditional banks. Options include:

• Local Panama banks (e.g., Banco General, Bancolombia) - require strong compliance history and may ask for a minimum deposit of USD 5,000-10,000.
• International banks in Panama (e.g., HSBC, Citibank) - more open to crypto if you have a license, but have higher minimum balances.
• EMI accounts (e.g., Mercury, Brex) - easier but may not accept Panama entities. Some EMIs like Dukascopy or Bankera accept licensed VASPs.

Consulting24 can introduce you to banking partners who accept licensed VASPs. Alternatively, consider a payment processor like Stripe or Coinbase Commerce for fiat on/off ramps. Panama has no capital controls, so moving funds is straightforward. However, you must ensure that your bank account is in the company's name and that all transactions are compliant with AML regulations. Some banks may require a minimum of six months of operation before opening an account.

Benefits of a Panama crypto license

• Low cost: Flat EUR 6,000 license fee, no minimum capital.
• Tax efficiency: Territorial tax system - foreign income tax-free.
• Speed: 3-5 months approval, faster than many EU jurisdictions.
• Flexibility: Single license covers multiple VASP activities.
• No residency requirement: Directors can be non-residents.

Compared to Lithuania or Estonia, Panama is cheaper and faster, but lacks EU passporting. For global or Latin American focus, Panama is ideal. Additionally, Panama has a stable dollarised economy (uses USD as currency) and no exchange controls. The country also offers a straightforward company incorporation process with no minimum capital for the corporation itself.

Compliance and trust

Maintaining a Panama VASP license requires ongoing compliance: annual AML/CFT training, transaction monitoring, and submission of suspicious activity reports. You must appoint a local AML officer and conduct periodic audits. AFIP may conduct onsite inspections. Failure to comply can result in license suspension or revocation. Consulting24 provides compliance support, including AML policy updates and audit preparation. General guidance, not legal advice. Always consult a qualified lawyer. The compliance burden includes keeping records of all transactions for at least five years, reporting any suspicious activity within 24 hours, and updating risk assessments annually. AFIP also requires that the company's IT systems meet security standards, including encryption and multi-factor authentication.

Common mistakes

• Incomplete documentation: Missing AML policies or business plan leads to delays. Ensure all documents are translated into Spanish if required.
• Underestimating substance: AFIP expects a local office and staff, even if minimal. A virtual office may not suffice.
• Ignoring tax obligations: Even with territorial tax, you must file annual returns. Late filing incurs penalties.
• Choosing the wrong jurisdiction: Panama is not for everyone - compare with Czech Republic or Poland if you need EU access.
• Not using a professional: DIY applications often fail. Consulting24 has a 98% success rate. Another common mistake is not properly identifying beneficial owners; AFIP requires disclosure of all individuals with more than 25% ownership.

Alternatives and comparison

Panama vs. other popular jurisdictions:

Panama is best for cost-sensitive founders targeting non-EU markets. For EU passporting, consider Lithuania or Estonia. For a full comparison, see our jurisdictions page. Consulting24 delivers directly in Panama, Estonia, and Lithuania; for other jurisdictions we advise and coordinate. Note that Dubai's VARA license is more expensive and has stricter requirements, but offers access to the Middle East market. Panama remains the most affordable option for a standalone license.

Why choose Consulting24?

Consulting24 has obtained over 500 crypto licenses worldwide, with a dedicated team in Panama, Estonia, and Lithuania. We provide end-to-end support: company incorporation, document preparation, application submission, and post-license compliance. Our Panama service includes a flat fee of EUR 6,000 for the license, with no hidden costs. We also offer ongoing compliance monitoring and renewal assistance. Contact us via WhatsApp or book a consultation to start your Panama crypto license journey.

Related jurisdictions

Mardo Soo · CEO, Consulting24Personally advises on jurisdiction selection. 500+ crypto licenses across Estonia, Lithuania & Panama. LinkedIn →

General guidance, not legal advice. Rules and fees evolve — we confirm current requirements for your case.