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Panama Financial Services Company

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A Panama Financial Services Company is a special type of Panama Corporation (IBC) that has been approved for a special license by the Panamanian Ministry of Commerce.

Known as an "Aviso" (Operational Status), it grants these companies with the ability to transact certain financial operations that do not require a more stringent regulated license.

More importantly, it provides some sort of documentary evidence of the ability, under Panama law, to conduct the services defined in the document.

Benefits of a Panama Financial Company

  • These Licensed Panama Corporations have proven particularly popular for those looking to set up offshore financial services companies that handle third-party funds for providing electronic payments services and other related payment processing activities.
  • More and more, banks are requiring companies to show some form of license to be able to routinely handle third party funds. The risk in engaging in a payment services type of business without such a license is substantial, as one risks having the account closed or worse, having funds frozen.
  • These financial services companies can work very effectively with other foreign structures – perhaps as a way to outsource services offshore for tax purposes and/or to provide additional services to clients of a company in another jurisdiction (which might have an issue with a local company offering such services).

Things to consider

Virtual Office

 In Panama, it is required to have a place of business other than the company's legally registered office address. This means, at a minimum, having a virtual office with a shared receptionist, a telephone in your company name with fax and mail/fax/phone forwarding service.

Sovereign's Virtual Office service provides you with an official place of business in Panama that the Ministry inspector can visit.

Taxes

Having a legitimate place of business also means that the local "Municipio" (city council) will expect to collect its monthly tax as it does from all local businesses. Other than this the Panama Financial Services Company will still be considered "non-resident" for tax purposes and therefore pay no other tax.

This is the only annual compliance requirement to maintain this type of company in good standing, along with the normal annual company renewal payment of government franchise tax and resident agent fees.

License Restrictions

Bear in mind, these special licenses DO NOT allow the Panama Corporation to engage activities such as: 

  • Securities broker-dealer activities including investment funds, managed trading etc.
  • Savings and Loan (financiera)
  • Fiduciary (trust company) services
  • Any banking services including debit cards which in Panama only a bank can provide
  • Cash money transmittal services or cambios (e.g. bureau de change)

These services are regulated differently by the Panamanian government and all require a more stringent type of license, with minimum paid-in capitalization and public audit requirements. Also required in Panama are local directors and a local office with staff, although some of these licences (with the exception of banking) are available in other jurisdictions without a physical presence. In Panama payment processing and e-currency services can be offered with a full regulated licence which requires $50K in paid in capital to be deposited with Banco Nacional along with a local office with two personnel.  This entry level non regulated licence can be upgraded at any time into a full supervised and regulated one.

If you are interested in any of these additional types of licenses, please contact us today.

Panama Offshore Financial Services Company Solution from Sovereign

The Panama special license, along with the Panama Corporation, is readily available within about two to three weeks maximum.

Nominee director service is also available based on requirements.  A certified English translation with apostille is also included alongside the original Spanish original.

For more information or if you are ready to find out how Sovereign can help you set up a Panama Financial Company, click on the button below.

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