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Financial licenses in Panama, everything you need to know
Panama has
built a solid reputation as a financial destination in Latin America. This
small Central American country is one of the best banking, financial, and
corporate centers in the whole world.
Its unique
banking system and the presence of the Canal has turned Panama into a financial
hub and a country that's also a cultural and geographical crossroads. It
connects South America with Central America, and a mix of cultures such as the
African, indigenous, Colombian, North American, and its own culture.
When you go
to Panama City, you’ll notice it seems like a smaller version of both Manhattan
and Miami. Dozens of skyscrapers with financial companies and business centers,
while the beautiful Panamanian beaches are just a few minutes away.
Panamanian
banks offer high levels of asset protection and confidentiality, which makes it
a reliable jurisdiction for financial and banking services.
Moreover,
Panamanian banks welcome with open arms reputable brokers and investors from
all over the world. In Mundo, we can help you open personal, corporate,
brokerage, and merchant accounts remotely.
If you want
to know more about our banking services in Panama, please check out our article
If you're a
financial investor, Panama must be at the top of your list.
Moreover,
Panama is also a pioneer in telecommunications, which are vital for financial
investors today. It is the crossroads of almost all main lines of optic fiber
cables on the planet.
High-net
worth individuals usually seek asset protection and tax planning strategies
through asset diversification investing and keeping their money in banks in
different jurisdictions.
This is a
solid strategy as long asthat investor chooses the adequate jurisdictions, and
Panama is one of the best.
Furthermore,
if you combine a financial company with a FTZ company, (whether it’s in Colon,
Panama Pacific, or other of the dozens of FTZs in Panama) where it will pay
virtually no taxes, you have one of the best available asset diversification
combinations.
Do you want to know more about our corporate services
in Panama? Please check out our article.
That means
it's a top destination for you to establish a financial business as you’ll
always have family offices, investors and high net worth individuals looking
for diversification and asset protection strategies.
To wrap it
up, we recommend Panama because it offers:
- The best banking system in Latin America and a top
three in the world.
- A territorial tax system with plenty of flexibility.
- A thriving economy and a stable democracy.
- You can use our own financial company and we can help
you open a personal, corporate, or brokerage bank account.
- Reputable and strong licensing systems that will allow
your company to operate within a solid legal environment.
About Panama
Panama is
one of the most stable democracies in Latin America and has a pro-business
government that promotes a liberal economic policy to encourage FDI.
This has
been Panama's reality since the early 90s. The results are clear: a modern
country that is the economy with the greatest potential in the region, with
cutting-edge financial services, a lively business sector and has lifted
thousands of people out of poverty and unemployment.
The
financial services sector covers about 10% of Panama's GDP, and most of it is
provided by the banking sector, which remains one of the pillars of the
Panamanian economy. The industry is known to be the second-best in the world,
only behind Switzerland, and meets the highest international standards through
top-notch audit regulations and security systems.
The government knows the financial industry is one of the pillars of the economy. Hence, they are interested in allowing the market to develop, to the point is likely the best in Latin America and one of the top in the whole world.
Five reasons to obtain a financial license in Panama
Reputable licenses
There are
certain jurisdictions where applying and being approved for a financial license
is generally simple. However, most of these jurisdictions are blacklisted. Many
investors don't want to have anything to do with them. It's quite a risk to get
involved in the financial service industry without an appropriate license.
That won't
be an issue with a Panamanian license, which has one of the best reputations in
the financial world. If you have a Panama license, potential partners will know
your business is legit and trustworthy.
Enhanced flexibility
The
Panamanian tax system has one main benefit: it's territorial. That means it
provides you with plenty of flexibility if you work with foreign structures.
You can outsource services in tax-efficient jurisdictions because Panama only
taxes locally sourced income, and you can also set up your financial company in
an even more reputable jurisdiction.
Political and economic stability
Panama is
one of the most stable democracies of the region. Large protests or strikes are
almost non-existent. The country's economy relies heavily on its robust
business sector, and especially on its financial services.
A top banking system
The
Panamanian banking system is not only the best in Latin America, but it's also
on the same level as Switzerland and the United States. Panama has a strong
regulatory authority that ensures high levels of compliance. The country has
top private banks that are used to dealing with foreigners and have staff with
experience in Swiss and American banks to assist their international clients.
This means
you'll have your money and the money you handle safely and will be able to
provide your clients with the security that their assets are in one of the
safest jurisdictions on the planet.
Dynamic business environment
Thanks to
the Canal, Panama is a top business jurisdiction. Companies all over the world
are present in Panama, and its top banking and financial services have turned
it into a must for financial investors.
This, the
reputation of Panama as a financial jurisdiction, and the friendly business
environmentturned Panama into a dynamic place to do business where thousands of
businesspeople require top investing, financial, and banking services.
And we can
help you give that to them.
Financial licenses in Panama
Panama is a
reputable financial licensing jurisdiction. The setup and maintenance costs are
reasonable, and the advantageous tax system makes it more appealing.
A Panama
Financial Company is an attractive way to borrow money from your own funds,
asking collaterals as guarantees, and other services such as factoring.
To name a
practical example. Many offshore financial companies establish a company in Panama
to offer factoring services mainly to SMEs, to buy the invoices of a company,
so they can receive the money immediately and then repay it later. In a
jurisdiction such as Panama, these services come with low costs, good
reputation, while keeping the entity quite unregulated. Also, similar companies
can use the financial license to establish a company in Panama and use to
outsource services because Panama doesn’t tax foreign-sourced profits.
We can
offer you two options for offering financial services in Panama.
Option 1: Use our financial company
This is the
easiest and most straightforward path towards doing investing and financial
business in Panama. We can help you onboard your clients, using an existing
structure and AML procedures to quickly launch your business idea. A member of
our team will be the legal representative of such structure and, if you decide
to go further with this option, he'll have veto powers over certain
transactions. But as long as you strict AML policies and the KYC of new clients
show no records of any wrongdoings, the veto power will be kept at a minimum.
These are
some important particularities you must know about using our company as an
umbrella for your operations:
The initial
setup fee (contact us for more information) will cover the creation of the new
business strategy and all the necessary adjustments to the business plan, AML
process, client contracts, Terms and conditions, etc. All these changes need to
be approved by the regulator, and it can take around one month, after which you
can begin your operation.
You will
keep your business running independently and all the profits generated by it
will be 100% yours to keep.
The company
will need to cover for disbursement costs. This will be represented by a
commission in each granted loan upon disbursement to a client.
The company
will demand a monthly fee to cover running costs, such as AML officers,
onboarding staff, handling all reports, and auditing from the regulator.
Our legal
representative will hold the power of veto for suspicious activities and client
onboarding.
Option 2: Create your own financial company in Panama
Now, if you
want more freedom to operate your business and you don't mind about the minimum
balance fees, government fees, and taking a few months to start operating your
business, then this may be the best option for you.
The main
steps and phases to start the business are the following:
- Phase 1: Create a new company in Panama
- Phase 2: Obtain the financial license in Panama
- Phase 3: Operate the business
We also
recommend obtaining Panamanian Residency. This is not a necessary step;
however, it will:
- Provide you with greater credibility with the
authorities in obtaining the license (commitment).
- Allow you to take official positions on the board of
the operating company.
- Facilitate the opening of the bank account (higher
acceptance rate with banks).
- Allow you to be a signatory on the bank account.
- If you want to know more about our residency services
in Panama, please visit our country focus.
Let's walk
you through each phase of the process:
Phase 1: Create a new Company in Panama
Incorporation
of your business in Panama. You'll need professional nominee directors and a
Panamanian legal representative. Thus, in this step,we'll help you:
Search for
Panamanian Directors who meet the requirements (including Compliance Officer),
secretary, treasurer, and staff and preparation of contracts and legal
documents.
Phase 2: Obtaining the Financial License in Panama
Here, we'll
help you with the license processing, including:
Preparation
of the application and presentation to the MICI (Ministry of Commerce and
Industry) and follow-up until obtaining the license in different entities.
Review and
adaptation to the Panamanian jurisdiction of:
- Service contracts.
- Anti-Money Laundering Manual.
- KYC Policies.
- Description of the company's economic and financial
objectives and projections.
External
expenses: Government fees for the application and the first operational year,
notary, adaptation of the business plan by an experienced economist.
For this
process, you must provide our legal team with a power of attorney because the
legal representative of the financial company must be Panamanian.
During this
phase, to apply for the license, the following documents are required:
- Police record of all shareholders and directors.
- Description of the company's economic and financial
objectives and projections (signed by a Panamanian economist).
- Paid-up capital of USD 500k certified by a CPA.
- Certified ID documents for all directors and
shareholders.
- Incorporation documents.
Phase 3:
Operate the business
This is
something you can do on your own, but we can help you find and acquire the
following:
- Core software
- AML software
- Office space
We can help
you open a business bank account at a partner bank in Panama. Also, We strongly
recommend opening a second backup bank account.
If you want
to know more about the process of opening a corporate bank account in Panama
and our services, please check out our Panama banking article.
Which activities are covered by a Panamanian financial
license?
Many
countries tend to fit many different financial services under one single
license. This simplifies the process, but also leads certain potential partners
and investors to run away from those jurisdictions because they think they
don’t hold enough compliance standards.
But that’s
not the case with Panama. The financial license has two main purposes and
that’s it. That means for other services you may need additional licenses, but
also means you can rest easy that you’re working on a reputable jurisdiction.
According
to the Panamanian law, a Panama financial company is a non-bank company that
can be used for:
- Factoring
- Borrowing money from own funds
- However, we don’t stop there. We only offer the best
of the best, which means we can also assist you with:
- Banking license
- Insurance license
- Trust license
- Let’s explain what you need for each one of them.
Banking license
Its name is
pretty self-explanatory. It will allow you to have your own bank and conduct
all regular banking activities. It comes with two types:
- General license: It authorizes the bank to conduct
banking activities in the Panamanian territory and abroad and any other
activity authorized by Panama’s banking authority.
- International license: It authorizes the bank to
conduct banking activities out of the Panamanian territory from an office
located in Panama.
What do you
need to submit to receive the license?
- Statutes of the company.
- Board authorization.
- Detailed information about shareholders, directors,
and promoters including CV of the main leaders of banking activity.
- Personal banking record of directors and main
shareholders.
- Economic group of the registered bank (if applicable).
- Activities of the economic group.
- Substantial investments of shareholders.
- Distribution of the capital.
- Minimum capital ($3m for an international license,
$10m for a general license).
- Audited financial record and registry of the auditor.
- Annual reports.
- Business plan and viability report.
- Banking risk management.
For banks
registered abroad that want to operate in Panama certain requirements may
change. For detailed information please contact us directly.
Trust license
Panama is a
growing trust jurisdiction that has recently become more popular. To apply for
a license,you’ll need the following documents:
- Power of attorney (again, the legal representative
must be Panamanian, we’ll provide that for you).
- Statutes.
- Board authorization.
- Certification of competent authorities.
- General information of the solicitant.
- CV of directors and promoters.
- Distribution of the capital.
- Guarantee.
- Financial records.
- Business plans and viability report.
Insurance license
Thanks to
its reputable business environment, insurance companies are ever-growing in
Panama. To obtain an insurance license, an application must be submitted with
the Superintendent of Insurance with the following documents:
- Power of attorney.
- Copy of partnership agreement/articles of
incorporation.
- Certification from shareholders or partners.
- Composition of the board of directors.
- If it´s a foreign company branch, a certificate from
the corresponding authority proving that the company is properly established in
the country and has full solvency for the past five years.
- Policy and insurance plans.
- Reinsurance program with which the company will start
operations.
- Viability study and business plan.
- Minimum capital ($2m).
Who are we, and what can we do for you?
In Mundo,
along with NTL, we have 25 years of experience offering unmatched financial,
investment, immigration, and corporate services for investors and high net
worth individuals across the world.
Panama is
one of our main headquarters. We truly believe it's one of the best
jurisdictions for businesspeople and financial investors on the whole planet,
and we believe it to the point we've decided to base our business there.
In all
these years of experience, we've built an unparalleled network of experts,
including a top team in Panama to offer only the best corporate, banking,
investment, immigration, and financial services in Panama.
We can help
you obtain a financial license in Panama. And we can also help you with all the
attached needs for such a process.
In detail,
our team of experts can help you to:
- Establish and incorporate a company in Panama.
- Prepare and submit the application for a financial
license.
- Revise and adapt all documents and company policies to
Panamanian regulations.
- Search for Panamanian directors and staff.
- Search for an adequate office space.
- Create a corporate and a backup bank account for you.
Panama is one
of our favorite financial jurisdictions in the world. Not only it offers a
swift process for a reputable financial license, but it also comes with
terrific added benefits: a sound banking system, a reliable business
environment, and fantastic tax planning opportunities.
Establishing
your financial business in Panama comes with great opportunities. All you need
to do is contact us right now and get in touch with our experts.
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