Requirements to Establish a Financial Institution in Panama

By Legal Solutions • 5 minute read

To establish a financial institution in Panama in 2024, it is necessary to comply with several legal and regulatory requirements set by the Panamanian authorities.

Current regulations that should be reviewed include:

Banking Law of Panama: Law No. 9 of 1998, Decree Law No. 1 of 1999, and Law 23 of 2015 (Anti-Money Laundering).

The following outlines the main requirements for establishing a financial institution in Panama and the precise steps to follow:

Legal Formation of the Company

a. Type of Company

Financial institutions are generally established as Corporations (S.A.). You must draft and register the company’s Articles of Incorporation with a notary public and then register it with the Public Registry of Panama. We have shared a video where you can find the most relevant information.

Define the minimum share capital required by law. The initial minimum amount is $500,000 USD (five hundred thousand United States dollars) for all financial institutions, which must be sufficient to cover initial operations and meet regulatory requirements. Additionally, a guarantee must be established, and if it is not available in physical or tangible form, it can be supported with a report from a Panamanian Certified Public Accountant, provided that there are liabilities such as invoices, for example.

Registration and Licenses

a. Superintendency of Banks of Panama (SBP)

You must obtain an operating license issued by the Superintendency of Banks of Panama. The process includes:
1. License Application: Submit a formal application that includes the company’s bylaws, business plan, information about shareholders, and members of the board of directors.
2. Initial Capital: Demonstrate that you have the required minimum capital, which may vary depending on the nature of the financial institution's operations.
3. Source of Funds: Provide documentation that justifies the lawful origin of the funds used to establish the capital of the financial institution.

b. Registration with the General Directorate of Revenue (DGI

Register the company with the General Directorate of Revenue to obtain the RUC (Unique Taxpayer Registry) and the Operating Permit.

c. Registration with the Ministry of Commerce and Industries (MICI)

Request authorization from the Financial Companies Department of the Ministry of Commerce and Industries to establish a financial institution in Panama. The requirements for establishing a financial institution in Panama have been thoroughly detailed by the MICI, and you can find them in the following guide: GUIDE TO ESTABLISH A FINANCIAL INSTITUTION IN PANAMA. This is the official guide, and as you will see, you will need a lawyer to submit the application. At Legal Solutions Panamá, we are experts in this process.
Obtener el Aviso de Operación a través del portal Panamá Emprende, que es un requisito para iniciar cualquier actividad comercial en Panamá.

Regulatory and Compliance Requirements

a. Compliance with Financial Regulations

Adhere to the regulations established by the Superintendency of Banks of Panama, which include rules on solvency, risk management, audits, and periodic financial reporting.

b. Anti-Money Laundering and Counter-Terrorism Financing Policies

Implement policies and procedures to prevent money laundering and financing of terrorism, in accordance with Panamanian laws and international recommendations from the FATF (Financial Action Task Force).

Other Requirements and Consideration

a. Liability Insurance

Obtain professional liability insurance that covers the risks associated with operating the financial institution.

b. External Audit

Hire a reputable external auditing firm to conduct periodic audits and ensure transparency and compliance with financial regulations.

General Procedure

Establish the Company: Draft and register the company's bylaws, and secure the initial capital.

Apply for Licenses: Submit the license application to the Superintendency of Banks of Panama and meet all requirements set by the DGI and MICI.
Implement Systems and Policies: Establish compliance policies and the necessary technological systems.
Commence Operations:Once all licenses have been obtained and regulatory requirements have been met, start the operations of the financial institution.