Financial and Banking Licenses in Panama

In Panama, the financial sector presents a very interesting option for every investor or entrepreneur who wants to operate from and within Panama.

This country offers a variety of financial and banking licenses.

Financial licenses

If you are looking to establish a company to operate inside or outside of Panama, is it necessary to obtain a financial license. This is the case for the following activities: loans, leasing, factoring, credit card issuing, fiduciary activities and others. For this reason, operating without the corresponding license presents an unnecessary risk as this is strictly penalized.

The general requirements for these licenses are:

• Registering a Sociedad Anonima.
• The minimum paid up capital must be USD 500, 000.00.
• Certificate issued by an authorized public accountant, that states that the paid-up capital has been fully paid and every share has been registered and paid.
• A USD 1,750.00 check for the Commerce and Industry Ministry in order to cover the authorization fee and the tax fee of the current year.
• Resume, police record and apostilled copy for each director, shareholder, signatory and legal representative.
• Business plan according to the law requirements.

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Types of licenses and requirements

In Panama we can find the following financial licenses: stockbrokers, analysts and executive, securities houses, investment advisory, risk rate agencies and forex. There are licenses for individuals who want to work in these fields and for companies which seek to provide either investment advisory or forex services. In most cases, the companies that wish to apply for these licenses will be required to hire employees who have executive or stockbroker licenses themselves. 

The financial licenses are basically divided into two sectors: Financial and financing licenses. 

The financing entities are the ones in the business of lending money using their own private capital (as opposed to banks, which lend money using their clients´ deposits).

Financial entities are the ones providing all types of financial services and they are usually the intermediaries in financial and investment operations. 

• Financial Operations licenses: These provided by the corresponding superintendency whether that is banking or securities. These types of businesses can be a bank, a stock trading business, brokerage business, investment advisors, etc.
• Financing Operations Licenses: These are provided by the Ministry of Commerce and these types of businesses are the ones that lend money with their own private capital.

The financing operations licenses is the easiest one in terms of requirements. By having the license being provided by the ministry of commerce this basically makes it a license to operate a business, making the process much simpler. 

When it comes to financial operations licenses, these have a rigorous vetting process by their respective superintendency and not only are their operations continuously overseen by them, but they must have their approval to establish these types of operations here. 

When it comes to financing operations, the applicants are required to fill and sign a license application; attached to the application they have to provide a police report on criminal background, a description of the business plan and their objectives and how the operations are going to work and be managed. Also, it is required to provide information of what the initial capital of the business is, a draft of the articles of incorporation (if the applicant is a corporation) as well as the proper documentation stating that they are authorizing the company to apply for such license.

When it comes to financial operations, the superintendency is bound by OFAC and anti-money laundering regulations, making a bit more complex if the client is from a country that is not bound by these regulations. 

Advantages of acquiring a financial license in Panama

The registration of financial licenses is highly regulated in Panama; but we can identify several advantages that set Panama apart from other countries as a destination for these types of operations. 

The first being the strategic position Panama has in the region, the use of the US dollar as legal tender, the commercial and political relations that Panama has with other countries and the Panama Canal, which makes the country a logistic hub for trade. 

However, when applying for a license in Panama, our experts recommend to deeply research the conditions and requirements in order for the application to be successful. Also, it is important to note that the superintendents will interview the applicants and conduct a background investigation. 

We, at Mundo, highly recommend hiring the services of experienced lawyers when applying for financial licenses in Panama. Our lawyers have a wide experience with these processes and requirements and can help you apply in the best way and in compliance with national and international regulations, so that you won’t have to face any unpleasant issues or rejections. 

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Banking licenses

In Panama, according to the legislation of “Superintendencia de Bancos de Panama”, there are three different types of banking licenses:

• General banking license: This grants authorized licenses to perform different operations and banking activities, inside or outside of Panama.
• International banking license: it allows the company to perform activities that are previously approved by the regulating entity. The activities can be carried out outside of Panama from an office physically located in Panama.
• Representation banking license (“licencia bancaria de representación”): This is a special license granted to foreign banks. These banks must carry out activities under the title “oficina de representación”. This license allows foreign banks to carry out activities and banking operations previously approved by the Panamanian regulating entity.

The requirements for these types of licenses are many. For this reason, we strongly recommend hiring professional services such as Mundo ´s.

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Banking licenses

In order to engage in the banking business in Panama it is mandatory to have the correspondent license which is regulated by the Superintendency of Banks. Next, we describe in detail the different banking licenses that it´s possible to acquire in Panama along with the mandatory requirements to obtain them. 

General license

Documents required from banks to get a license in Panama

Firstly, it is important to say that the process of acquiring a banking license must be carried out through a lawyer or law firm duly qualified for and duly licensed to provide legal advice and services in Panama. The bank will be organized as a corporation according to the corporate laws of the said country. The applicant entity will be required to meet a series of criteria in order to be established as a bank and to operate as such. Next, we describe the documents that need to be attached to the application for a banking license. 

Authorization of the Board of Directors: Minutes, extract of minutes or secretarial certificate of the meetings of the Board. The minutes should state the authorization to perform banking activities and offer banking services, and the assignment of the capital needed for such practice. 

General Information of the stockholders, directors and officials of the applicant and its promoter: Proof of identity (ID or passport), residence, address, nationality, occupation and percentage participation in the stock capital of the applicant and its promoter and promoter´s directors. If the applicant’s stocks are traded in the stock market, the required documentation should be submitted for the five stockholders with the greatest percentage in participation. 

Articles of incorporation: Draft of the articles of incorporation of the legal entity which will be the legal owner of the bank. 

Personal financial statements: Financial statements which prove the financial solvency of directors, dignitaries and major stockholders, or any individual that can exercise control over the banking entity. 

Economic group or financial conglomerate: Information about the economic group of which the bank is part of, presenting evidence of the links between the applicant, promoter, subsidiary, property, directors, officials and affiliate corporations, and other relevant parties participating in the bank or bank´s operations. 

Financial activities of the economic group or financial conglomerate: Description of the financial activities carried out by the entities of the economic group and the jurisdictions where these activities take place. 

Publications and memorandums: Annual reports or general publication containing information on the applicant and its promoting groups. This information includes changes in trade name, mergers, subsidiaries, branches, relations with other financial institutions, etc. 

Resumes of the bank’s responsible personnel: Resumes of the officials, directors and management administrative personnel including references and contact details so that this information can be verified. 

Minimum capital: Evidence that the entity has the initial minimum amount for establishing a bank. The minimum capital for an international license is 3 million dollars and 10 million for a general license. 

Capital distribution: Participation (%) of the applicant and its group in the paid capital of the future banking institution. 

Consolidated and audited financial statements: Audited and temporary financial statements of the applicant and its promoting group from the last two fiscal years.

Applicant’s major investments: List of corporations in which the applicant and the subsidiaries own by themselves or with someone else more than 10% of the voting rights and an equity investment of more than 25% of the capital.

Auditors’ registration and authorization: Name of the auditor that will own the license. Certificate from the Ministry of Commerce and Industry which states that the auditor is duly licensed to perform such duties. 

Business plan: Description of the applicant’s plans after obtaining the license. This should include the goals that the applicant intends to meet in the short and long terms, along with the bank´s viability and the contribution that the bank will make to the local economy. 

Feasibility study: Detail of the bank´s financial projections, organization of functions and expected profitability.

Risk management: Documents that develop the implementation of risk management, these include interest rate risks, credit risks, and operation, liquidity and legal risks. 

Any other document required by the Superintendency of Banks: The Superintendent can ask for other documentation if he considers it necessary for the granting of a banking license in Panama.

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Documents Required from Foreign Banks

The applying entity should meet the following requirements for acquiring a banking license in Panama: 

Authenticated copy of the articles of incorporation. 

Authorization of the Board of Directors: Minutes, extract of minutes or secretarial certificate of the meetings of the Board. The minutes should state the authorization to perform banking activities and offer banking services, and the assignment of the capital needed for such practice.

Certification from the authorities of the country of origin (monetary, supervising or regulating authorities): Certificate issued by the correspondent authority of the country of origin stating that the applicant has the proper license to operate as a bank in this country. The certificate should also state the authorization to establish a representing office in Panama and for operating a banking business in Panama or from Panama.

If the applicant operates as a bank in his country of origin or is part of an economic group involved with operating banks, the Panama Superintendent may require a certificate of the supervising entity of such country. The certificate should state that the applicant will be supervised by this foreign entity when operating in Panama, it should state the frequency and extent of this supervising activity. 

General information of the stockholders, directors and officials of the applicant and its promoter: Proof of identity (ID or passport), residence, address, nationality, occupation and percentage participation in the stock capital of the applicant and its promoter and promoter´s directors. If the applicant’s stocks are traded in the stock market, the required documentation should be submitted for the five stockholders with the greatest percentage in participation. 

Resumes of the bank’s responsible personnel: Resumes of the officials, directors and management administrative personnel including references and contact details so that this information can be verified. 

Economic group or financial conglomerate: Information about the economic group of which the bank is part of, presenting evidence of the links between the applicant, promoter, subsidiary, property, directors, officials and affiliate corporations, and other relevant parties participating in the bank or bank´s operations. 

Financial activities of the economic group or financial conglomerate: Description of the financial activities carried out by the entities of the economic group and the jurisdictions where these activities take place. 

Applicant’s major investments: List of corporations in which the applicant and the subsidiaries own by themselves or with someone else more than 10% of the voting rights and an equity investment of more than 25% of the capital.

The stockholders and/or sponsor of the applicant are required to submit an affidavit specifying if they belong to any financial group where they own by themselves or with other individuals more than 10% of the voting rights or an equity investment of more than 25% of the capital. 

Minimum capital: Evidence that the entity has the initial minimum amount for establishing a bank. Like we pointed out before, the minimum capital for an international license is 3 million dollars and 10 million for a general license. The capital for establishing a bank as a subsidiary in Panama must be constituted with additional funds. The capital for the subsidiary cannot be part of the main branch capital. 

Capital distribution: Participation (%) of the applicant and its group in the paid capital of the future banking institution. 

Legal representation: If the applicant is establishing a branch, then it´s necessary to specify the name of the designated persons that will act as general attorneys of the bank. These attorneys must be official Panamanian residents and at least one of them must have Panamanian nationality. 

Auditors’ registration and authorization: Name of the auditor and institution that will own the license. The Panamanian Superintendent may require a certification from the correspondent foreign authority, stating that the auditor that endorses the applicant´s or promoter´s financial statements is duly authorized to perform this task. 

Agents: List of the main agents of the bank organized by geographical regions.

Publications and memorandums: Annual reports or general publication containing information on the applicant and its promoting groups. This information includes changes in trade name, mergers, subsidiaries, branches, relations with other financial institutions, etc. 

Business plan: Description of the applicant’s plans after obtaining the license. This should include the goals that the applicant intends to meet in the short and long terms, along with the bank´s viability and the contribution that the bank will make to the local economy. 

Feasibility study: Detail of the bank´s financial projections, organization of functions and expected profitability.

Risk management: Documents that develop the implementation of risk management, these include interest rate risks, credit risks, and operation, liquidity, and legal risks. 

Consolidated and audited financial statements: Audited and temporary financial statements of the applicant and its promoting group from the last two fiscal years. Temporary financial statement should not be older than 60 days. All submitted financial statements must be prepared according to the International Accounting Standards or the United States Generally Accepted Accounting Principles.

Other financial information: When establishing a branch, it is required to submit reports on the classification of asset portfolio and the structure of liabilities and assets. It is also necessary to present reports on the bank´s position in the country of origin (total assets, deposits, portfolio, etc.) and the most recent rating from the correspondent supervising authority. 

Any other document required by the Superintendency of Banks: The Superintendent can ask for other documentation or requirements if he considers it necessary for the granting of a banking license in Panama.

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Post Application Process

Changing license status: If the banking institution in Panama should require a change in the type of license, the presented documentation filed by the Superintendency will be considered valid. The Superintendency, then, will determine what additional requirements and documents must be met and submitted for the new license. 

Temporary permit: Once these requirements have been satisfactorily fulfilled, the Superintendency will grant a temporary permit (valid for 90 days) so that the applicant can file its Articles of Incorporation with the public registry which must use the word “Bank” in its descriptions and functions. 

Definitive license: Once registered with the Public Registry and having met the requirement for minimal capital, the applicant will apply for the definitive license. Within a period of 120 days from the filling of the application, the Superintendent can accept or reject the application. This 120-day period can be extended under certain circumstances. 

Publication of petitions for licenses: Once the Superintendency has received and reviewed the application and documentation, it will publish the applicant´s information in a local newspaper for three working days. This publication will have the following information: 

1. Name of the applicant.
2. Name of the directors and officials.
3. Operative background of the applicant.
4. Names and identifications (ID or passport) of the directors, officials, and executives of the bank, indicating their respective positions.

Also, the applicant’s audited financial statements, corresponding to the previous fiscal year, will be of public record and can be accessed by the general public in the offices of the Superintendency.

Any individual who believes that there are reasons for which the license should not be granted, may present these reasons in writing to the Superintendency with the corresponding supportive evidence and documents. This should be done within 15 days after the last newspaper publication. 

The Superintendency will consider well founded reasons those reasons that show the economic incapacity or that reasonably question the moral standards of the applicant or entity applying for the license, or of the directors, officers, or executives. The Superintendency is not obliged to make a decision over such objections and the applicant has the right to refute them (presenting the corresponding proofs) within 15 days after receiving notification. 

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International banking license

Preliminary authorization for international banking license 

Foreign banks who wish to operate in Panama may request a preliminary authorization from the Superintendency. This preliminary authorization will allow the petitionary to operate from an office located in Panama under an international license for transactions outside of Panama. In order to acquire a preliminary authorization, the following requirements are mandatory:

1. Confirmation from the supervisor of the country of origin stating that the continuity of business has been interrupted in this country.
2. Confirmation from the Panama National Bank that the funds required as deposit have been received. 
3. Evidence that the applicant has the minimum capital required for an international banking license. 

This authorization should be renewed every year and it´s not a permanent license to operate as a bank in Panama. 

Legal agents of branches of foreign banks: All foreign branches operating in Panama must designate a minimum of two legal agents who must be persons residing in Panama. One of these must be a Panamanian citizen. 

Business continuity: All banks should take the correspondent precautions so that their operations can continue in the event of a significant interruption that might affect its operational capability. These measures are necessary to minimize the consequences that such interruptions in operations may cause. The Superintendency may apply regulations in order to ensure the continuity of the business and its operations. 

Corporate governance: The banks must comply with the regulations stipulated and regulated by the Superintendency of Banks. Any infringement of these regulations will be sanctioned accordingly. 

New regulations

In 2001, the Superintendency issued a new set of rules which we describe next:

Moral and financial solvency: All natural persons that apply for a banking license to the Superintendency for a foreign-formed bank, and the directors, officials, promoters, and stockholders must have a renowned moral character and financial solvency. The application for a banking license will be rejected if any of the persons:

• Has been convicted for illegal activities such as illicit drug trafficking, fraud, money laundering and illicit traffic of arms or persons, embezzlement, extortion, kidnapping, corruption, terrorism, or any crime against property. 
• Has been disqualified for practicing commercial activities in any country. 
• Has been declared bankrupt or is currently in civil suit with creditors
• Has been identified as the personal responsible in the Bank for the acts leading to the compulsory liquidation of the Bank.

The bank and its promoting groups should demonstrate having experience in the operations for which they request a license. They have to prove the increase in their experience and efficiency without major or repeated drawbacks. The Superintendency will perform a background check on the directors, officials and executives that will manage the bank considering their experience, capabilities, and moral integrity. 

Corporate governance: The bank that is applying must prove that the entity will have an administrative structure that considers the separation and assignment of responsibilities. It should have an independent audit, the execution of the functions related to law compliance, and supervising of the bank´s management. 

The applicant for a banking license should prove having a well-defined structure by submitting documents describing in a clear manner the assignment of responsibilities for the bank management, the hierarchical line of approvals and interaction between all the management levels and auditing departments. 

Exclusion of bearer stocks in Panamanian banks: Under Panamanian legislation licenses won´t be granted to banks whose capital is represented in whole or in part by bearer stocks. The same goes for the entities that control the bank. 

Exclusion of bearer stocks in foreign banks: No licenses will be issued to banks whose capital is represented by bearer shares according to foreign legislation. 

Discretional authority of the Superintendent: The Superintendent will meet with the representatives applying for the banking licenses or with the assigned lawyer in person before the formal presentation of the application. 

The superintendent will choose whether to grant the license after revising the provided documents, performing the correspondent background checks and meeting with the representatives. In some cases, the Superintendent may ask for the fulfillment of certain conditions with the previous signing of a commitment by the applicant. 

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Representation license

Representation offices must include the words “representative offer” in all the operations they perform. This license has to be requested directly by the bank that will be represented and may only be issued for this bank. Once the license has been approved and obtained, the bank may operate with its representative through a branch or a subsidiary. 

Applicants for a representation license

The representation license can only be issued for banks with a physical presence in Panama and with a parent bank abroad. Management and substantial operations must be carried out in the original country which must be dully supervised by the corresponding authority and in compliance with all regulations of the jurisdiction. Representation offices, according to Decree law n. 9, cannot operate in or from Panama, therefore the Superintendency can set up the requirements that will have to be met when applying for the license. This license will only be granted to banks that can prove having capital adequacy and liquidity under the standards of their country´s supervising authority. The entities operating under a representative license are not allowed to perform any banking passive or active operations, with residents or nonresidents. They are not allowed to perform credit mediation, nor payments in managing capital or assets in a trust. 

To sum up, acquiring a banking license in Panama is a complicated process but it is worth your time because Panama is the most important banking centers of Latin America. Ask for a consultation with Mundo experts to start you banking business in a world-class financial hub. 

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Types of financial licenses in Panama

The minimum required capital to acquire a Panama financial license depends on the type of license and the regulating body. For a financial company license regulated by the MICI the minimum required capital is 500,000 USD. On the other hand, if the license is issued and regulated by the Superintendencia del Mercado de Valores, the minimum required capital is 350,000USD. For investment companies (Sociedad de inversion) the minimum required capital is 25,000USD. If this entity is established through a trust, it is necessary to declare all the assets held under it. 

Next, we will describe each of the license types available in Panama along with the requirements and documents needed for a successful application. 

Pawn shop license

Panama legislation allows for the establishment of pawn businesses, in which people deposit valuables and receive money. Their valuables are therefore deposited as a guarantee of loan repayment. This is a relatively easy to get license but, as with all licenses, it is important that the applicant demonstrates a clean reputation and clean criminal record. The person cannot have a background of money laundering, fraud, or other crimes. The pawn business is overseen by the Panama Ministry of Commerce and Industry and the applicant must have a physical office in order to operate. Next, we describe the requirements to get a pawn shop license in Panama.

Requirements for natural persons:

1. Complete and submit the license application form. 
2. Submit a police record that states that the person has no criminal record. 
3. Submit a copy of a standard loan contract. 

Requirements for legal entities 

1. Complete and submit the license application form. 
2. Submit a police record that states that the person has no criminal record. 
3. Submit a company´s good standing certificate from the Public Registry. 
4. Submit a copy of a standard loan contract. 

If you want to establish a pawn business in Panama, our experts experienced in licensing can help you throughout the process. Contact us and get a consultation with our experts.

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Finance company license

A finance company is a company that offers loans to people. This type of business can be very lucrative during financial crisis such as the coronavirus pandemic when many people have the need of asking for loans to cover expenses. This type of license is also regulated by the Ministry of Commerce and Industry and requires the following in order to apply:

Requirements for natural persons 

1. Complete and submit the license application form. 
2. Submit a police record that states that the person has no criminal record. 
3. Written description of the business plan including financial goals and economic projections.
4. Copy of a standard loan agreement. 

Requirements for legal entities 

1. Complete and submit the license application form. 
2. Submit a police record that states that the person (officer, director, shareholder of the company) has no criminal record. 
3. Written description of the business plan including financial goals and economic projections.
4. Copy of a standard loan agreement. 
5. Authorization to set up a Panama Finance Company from the correspondent legal entity.

Finance business can be very profitable during economic depressions such as the one that will follow the coronavirus crisis. Contact our experts to establish your license in Panama.

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Panama Casino License 

If you go to Panama City you will find a casino practically at every corner. They offer not only gambling options but also entertainment such as live music, discos, and bars. This is undoubtedly a great business opportunity for foreign and local investors. The casino industry is highly regulated in Panama, that is why we recommend you acquire your license with the help of experienced experts and lawyers such as Mundo´s. These licenses are regulated by the Ministry of Economy and Finance of Panama, which is the entity that issues them. 

If you want to start a casino in Panama, apart from the help of professionals, you will need:

1. Request of a casino license through a Panama attorney (with a Power of Attorney).
2. Name of the applicant.
3. Location of the casino facility.
4. Detailed business plan indicating the number of arcades and their location, amount and types of gaming tables and slot machines type A with which the applicant intends to operate in the casino. 
5. Name of the people involved in the business and their roles (shareholders, directors, officers, legal representatives, etc.)
6. Complete information and clean criminal record of each director, officer, manager, or shareholder owning more than 10% and of any person who is considered to have a relation with the casino business. 
7. If you are applying with a legal entity, you must submit documents proving the establishment and enforcement of the entity. If you apply as a natural person then you need to provide consistent proof of your identity. 
8. Information on the financial structure of the legal entity, including a list of outstanding shares.
9. Certificate that states the names of each shareholder. 
10. Certificate in which are stated all liabilities such as loans, mortgages, liens, and obligations. 
11. Certification signed by the company secretary listing the names of the people whose benefits, salaries or fees correspond to the 10 highest payrolls or returns. 
12. Indicate the procedures to award bonuses.
13. Copies of all contracts relating to the transaction. 
14. Present an income statement certified by a public accountant, covering the three previous fiscal years to the application. 
15. Provide tax returns from the 3 years preceding the application. 
16. Investigation forms issued by the Gaming Control Board for directors, officers, and shareholders. 

Government Fees

The Gaming Control Board will stipulate the minimum monthly fee. For casinos located within the designated area, there will be a minimum fee or a 10% fee of the monthly gross revenues, whichever sum is larger. On the contrary, if the casino is located outside the designated area, it will pay 10% of the income as fee. 

Establishing a casino in Panama is a difficult process which must be carried out very thoughtfully and carefully. However, the effort is worth it because Panama is a fertile soil for such businesses. If you want to take this challenge, our experts will be there to support you. Ask for a consultation now.

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Slot Machines Parlor License

If you don´t want to go through the intricate process of opening a casino, Panama also offers a license for slot machines which is much easier to acquire. This license is also regulated and issued by the Gaming Control Board under the Ministry of Economics and finance. In this case, it is necessary to apply for a type C license for Gaming Machine Halls and the following is required:

1. Digital fingerprints.
2. Two recent photographs.
3. Police record from your home country.
4. Copy of your ID (passport or Panamanian cedula). 

In order to know more about this license, requirements and advantages, please ask for a consultation with our experts. 

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Gambling operation license

All online gambling operations in the Republic of Panama are regulated by Panama´s Ministry of Economy and Finance, more specifically by the Online Gambling Operations department. The applicant (natural or legal entity) who is looking to obtain such a license in Panama must enter into a contract with the Gambling Control Board, which will be the entity to issue the license. The licensee will operate through a “system for electronic communication games” which will be subject to the corresponding regulations of the Republic of Panama, even though some of the system´s elements function abroad.

The conditions for conducting a gambling business in Panama will be determined in the agreement between the applicant (administrator or operator) and the Board. 

Prohibited Activities

The systems for electronic communication games that operate in or from Panama cannot be used by persons who reside in Panama. This means that the applicant may obtain a license in Panama and operate from this country but can only provide services to people who reside outside the Panamanian territory. 

Wages cannot be placed for the following events: 

• Elections for a public office in or outside of Panama. 
• Those events that involve a professional team based in Panama, regardless of where the event takes place. 
• Events happening in Panama where the directors of the league specifically request that no wagering is allowed. This request must be made at least 30 days before the event. 
• Sporting amateur events in Panama.
• Events that take place outside of Panama but with the participation of public or private institutions that are located in Panama. 
• Any other event at the discretion of the Gambling Control Board´s director.

Requirements

In order to apply for an agreement and thus be able to operate a gambling business in Panama, the following requirements are needed:

• Compliance with regulations and laws. 
• Legal representative in Panama.
• Allow for a background investigation.
• Pay the correspondent fees.
• If the applicant is a corporation, it must be duly registered as a Panama company or as a foreign company in Panama. 
• The applicant must prove having the necessary knowledge and experience for the operations corresponding to the license he is applying to. 
• Prepare and submit a business plan which proves the feasibility of the project. This must be designed by a consulting firm (with the consent of the applicant or the Director of the business) which cannot be owned by the applicant. 
• Prove that the applicant is financially solvent and that can pay its obligations and has the capacity to properly develop the submitted business plan. 
• To prove that the system for electronic communication games, through which the licensee will operate, can effectively identify the gamblers´ identities and source of funds. 
• Submit the application form which has to be approved by the Gaming Board Director upon submission. 
• When the applicant is a corporation, the articles of incorporation must include the following:
• The section related to corporate purposes must state: “operate and manage systems for electronic communication games under the rules and regulations enacted by the Panama Gambling Control Board”.
• The articles of incorporation should include a statement saying that the corporation´s shares must be issued only under the provisions of the Gambling Control Board, otherwise they will be considered to be invalid until a) the company is no longer subject to the jurisdiction of the Gambling Control Board, or b) until the Board validates the shares with a resolution. The same applies for transfer of shares. 

If a shareholder of the corporation is deemed unfit by the Board, the corporation is not authorized to pay any dividends on such shares or securities and their holder will have no voting rights. Also, the securities should not be included in the securities with the right to vote, the corporation should not pay compensation to the holder of these securities or shares.

Comply with the provisions of Article 12 of the corresponding regulation.

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Required information and documents

• Name of the applicant
  
• Names of the suppliers of hardware and software for the System for Electronic Communication Games. 
• Specification of terms and conditions of the agreement between the software suppliers and the applicant with a copy of the agreement in place between these parts. 
• Name of all persons involved either directly or indirectly with the gambling operations and the nature of such a relation. 
• Detailed information on the applicant and employees, including commercial activities, financial information, and criminal history from a period of ten years before the application. If the applicant is a corporation, these details must be submitted for all legal representatives and shareholders that own 10% or more of the total shares. The Board´s Director, at his discretion, can ask for the information on any individual related to the applicant or the business. 
• Business plans
• Corporations must submit a certificate issued by the public registry stating the registration date, legal representatives, directors, and officers. 
• Authenticated copies of the documents certifying the company´s structure or the identity of the natural person. 
• Description of the company’s financial structure including a list of all outstanding shares and shareholders’ rights. 
• Corporate certification listing the names of each shareholder.
• Corporate certification which states all loans, mortgages or any liability or obligation.
• Corporate certification listing the names of employees or officers whose benefits, salaries or fees correspond to the highest ten of all the financial structure. 
• Detailed description of the procedures used by the applicant to issue bonds and sharing of profit. 
• Copy of the agreements or contracts in relation to the game operations. 
• General profit and loss statement prepared by a duly authorized public accountant. This statement must include the 3 fiscal years prior to application. 
• Copies of the tax returns from the 3-year period preceding the application. 
• Copy of the Manual on Internal Control Methods.
• Submit documents that describe the experience of the organization and its employees regarding gambling operations and all operations that will take place. 
• The Director of the Gambling Control Board may request additional documents if he or she considers it necessary in order to guarantee the moral order and reputation of the Republic of Panama. 

Change the Application

Once the application is submitted along with all the information on the system application, shareholders, and board of directors, it is not possible to make any changes on this information. If there was a mistake when submitting this data, then the documents must be submitted again along with the amended info. Once the application is submitted, the director of the Gambling Control Board will start a background investigation whose expenses will be covered by the applicant. 

Agreements and certificates

When the gambling control board is reviewing the applicant’s information and documents, they will take the following factors into consideration, after which they might accept or reject the application. 

a. To confirm the applicant’s integrity, moral standards, competency, and experience. 

b. To confirm that the activities that will be carried out by the applicant do not represent a threat to the Panamanian public interest, and that they will subscribe to the applicable laws of the country. To confirm that there won´t be any illegal activities in the management of the gambling business nor in the business itself, and that the applicant is also not involved in any illegal activities. 

c. That the capital used to start and to manage the business comes from legal and morally accepted sources of income. 

d. The platform on which the gambling will take place has the capacity to accurately identify each gambler´s identity and their source of funds. 

The certificate of the gambling business cannot be from a person working for a government institution. 

Procedure for a gambling license application

-Background investigation: As we pointed out before, the director of the Gambling Gaming Board will perform a background check in order to make sure that the applicant is honest, clean of criminal charges, financially solvent and with the correspondent experience and qualifications to run a gambling business. The investigation may be conducted by a private agency. 

-Costs: The cost for such investigation must be fully covered by the applicant. Such cost will be estimated in advance by the Director of the Gambling Board and the applicant should pay half of it in advance so the investigation can begin. Obviously, if the applicant does not cover all the costs (investigation and other fees) in due time, the license will be rejected. Unused funds will be returned to the applicant. 

-Notifications: All persons named in the application will have to testify in person in front of the Board Director or designated person. If the person does not attend and does not present a written and formal explanation for his absence, the license will likely be denied. 

-Withdrawal: The applicant may request a withdrawal of the application if the director has not submitted his recommendation to the Gambling Control Board. After this, the applicant will have to wait 1 year before applying again. 

Luckily, Mundo has experts that are also experienced in Panama gambling licenses. Contact our experts through our channels. 

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Insurance Company License 

Panama´s insurance licenses are also regulated by the Ministry of Commerce and Industry, which is the government entity that reviews applications and issues these licenses. Let us go straight to the requirements and documents that a person or entity needs in order to apply for a Panama insurance license. 

Required documents:

1. Power of attorney and application.

2. Copy of the partnership agreement or articles of incorporation in the case of companies. This document must state the name, objectives, domicile, authorized capital, directors and officers, resident agent, subscribers, nominative shares, and a description of the activities that the applicant will carry out.

If the applicant is a foreign company, it is necessary to submit a document authorizing the establishment of the branch in the Republic of Panama. This document must be certified by a consulate of the country of origin in Panama. The documents must be translated to Spanish and the translation must be certified by a public and duly licensed translator. 

3. A certification listing all stockholders and partners which must be signed by the treasurer or secretary. If the company is new and does not have such officers yet, then this document must be signed by the applicant himself. 

4. List of the names that conform the Board of Directors with curriculums and letters of reference for each of them. 

5. If the applicant is a branch of a foreign company registered in Panama, it is necessary to submit a certificate from the regulating authority form the country of origin. This document is meant to prove that the head office is properly established and that the company operates in compliance with local legislation, and that it has been working with full solvency during the past 5 years. Also, the applicant should present a certificate authorizing the branch to operate in Panama with the same activities than in the country of origin. 

6. Present policy and insurance plans with details of all the products that the company will offer, stating the fees of every insurance branch that the company will operate with, life insurance guaranteed securities, and detailed description of the procedures for estimating the mathematical reserve.

7. Describe the reinsurance program with which the company starts operating. 

8. Feasibility study including the financial projects of the company in the short, medium, and long terms. 

9. Submit a check for 2,000USD to cover the expenses for the background investigation. 

10. The applicant will have to submit any other document or requirement stipulated by law or implemented at the Superintendent´s discretion. 

11. Establish a minimum cash capital of 2 million USD which must be maintained free of all kinds of liens. Those branches of a foreign company that wish to apply for an insurance license in Panama must establish this minimum capital and also adhere to the provision for the Insurance Technical Council, which will revise the minimum capital required every 5 years. 

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Panama sports betting license

Mundo recommends establishing a sport betting business in Panama because this is an immensely popular practice in this country. Both local and foreigners enjoy the games of the big leagues of soccer, basketball, football, and baseball all over town, in widescreen TVs in restaurants and bars. While enjoying a nice dinner people support their favorite teams and place their bets. If you want to be a part of this scenario and wish to establish a sports betting business in Panama, it is possible to apply for the corresponding license through the Ministry of Finance and Economics and its Gaming Control Board. The regulating law is Law 2 of 1998. 

Government Fees

Monthly fees to be paid to the Gaming Control Board by the licensee:

• 0.25% of 1% of the total bets placed for international sport events. 
• 0.50% of 1% of the total bets placed for international racing of greyhounds, providing this activity was approved by the Board. 
• 2% of the aggregate amount paid in prizes. 

Requirements 

• Sign a power of attorney with a Panamanian lawyer, who will apply on your behalf. 
• Submit an application (the lawyer will do this for you) which contains:

1. Name of the applicant.

2. Location of the sports betting agency. 

3. Business plan stating the number of agencies and events with which the licensee will operate. Also include the location of each agency and event and the exact types of bets that will be accepted. 

4. Names of individuals who are directly or indirectly involved in the business (this must be submitted for shareholders, officers, directors, representatives, etc.). 

5. Submit detailed information on personal, criminal, commercial and financial background of directors, officers, executives, and shareholders owning more than 10% of the company’s shares. Also submit information on the individuals that, at the Gaming Board Director’s discretion, have significant relationships with the business and its activities. The information should cover a 10-year period before the application. 

6. Submit authenticated documents that prove the legal incorporation of the company and, in case the applicant is a natural person, documents proving his or her identity. 

7. Submit a list of outstanding shares and details of the financial structure (legal entity).

8. In case of a legal entity, submit a certificate issued by the secretary of the company listing all obligations such as loans, mortgages, trusts, liens, and others. 

9. Certificate issued by the secretary listing all shareholders. 

10. Certificate issued by the secretary listing all the individuals whose benefits correspond to the 10 highest payrolls. 

11. Detail of procedures used to award bonuses and distribute profits (prizes). 

12. Copies of contracts relating to the transaction and the activities that the licensee will carry out. 

13. Income statement and balance sheets from the 3 fiscal years prior to application. The document must be duly certified by a public accountant.

14. Copies of tax returns from the previous 3 years.

15. Copy of the Internal Procedure Manual. 

Acquiring a financial license in Panama is a complicated process, but as a reward you will be able to operate in one of the most important financial centers in the world, with a wide range of incentives. With the help of experts, you can go through this process in a secure way, making sure you are complying with all the aspects of the law. Contact our experts and apply now. 

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