Panama Gambling License

Situated between Colombia and Costa Rica, Panama is one of the most stable economies in Central America, and it is among the favored offshore jurisdictions for gambling businesses around the world. The Panamanian currency, the balboa, is pegged to the US dollar, reducing foreign exchange risks and boosting the competitiveness of businesses based in Panama selling their products and services overseas.

The gambling regulator of Panama has extensive experience in licensing gambling businesses and enjoys a reputation among international entrepreneurs as being reliable and competent. Because of the favorable climate, a wide array of international gambling operators is based in Panama: online casinos, sports events betting agencies, slot machines, and many more.

Advantages of Holding a Panama Gambling License

Its government is non-interfering, stable, and with progressive legislation. This allows both locals and foreigners to easily set up new businesses with a great deal of certainty. According to the Ease of Doing Business in Latin America Index 2019, Panama ranks 8th in terms of time, cost, minimum capital, and bureaucratic procedures. In comparison with other Latin American and Caribbean countries, opening a new company is quite fast and not very complicated.

It has high-standard telecommunications facilities corresponding with the level of the infrastructure and resources in the US but much less expensive. Panama has access to several high-bandwidth continental fiber optic networks-the most state-of-the-art fiber-optic systems in the region. Furthermore, the country has no active volcanoes and does not suffer from earthquakes and hurricanes, which consequently means that there will not be severe interruptions to business operations because of damage to the infrastructure.

The greatest advantage is that Panama is home to a bank-friendly gaming industry; the country allows the opening of business accounts, which are necessarily required to operate gaming activities. Around 100 international banks offer a wide range of top-class, technologically advanced financial services that can satisfy the requirements for the growth and daily operation of any gaming business.

As far as accountability is concerned, gambling businesses running in Panama have to ensure only minimal accounting requirements for which the procedures are quite elementary. For example, there are no annual returns that need to be filed. Normally, a Panamanian-registered company is obliged to conduct a statutory annual audit only in those cases when its capital exceeds 100,000 USD (approximately 91,000 EUR) and revenues during the year are in excess of 50,000 USD (approximately 45,000 EUR). Such an attitude allows you to save resources and time for the development of your gambling business.

Such offshore companies based in Panama as online gambling operators can obtain a full exemption from Income Tax, Sales Tax, VAT, Stamp Duty, and Withholding Tax, and operate completely tax-free when serving only players outside of Panama. They are also not subject to foreign exchange control. Corporate income earned from serving customers within Panama is subject to 25%, which is close to the world’s average.

Gambling Regulations in Panama

The Gambling Control Board – Junta de Control de Juegos is responsible for licensing, regulation, inspection and supervision of gambling activities taking place within the country. The authority is trying to make the gambling industry of Panama a feasible part of the economy and therefore trying to respond as quickly as possible to the needs of the market participants as well as to make the gambling industry in Panama legal, transparent, free of risks for the government, players, and licensed casino businesses.

Laws and regulations applicable to gambling businesses in Panama:

• Resolution No. 65 from October 25, 2002, issuing the regulations on the operation of games of luck and chance and activities originating bets through electronic communication systems.
• Resolution No. 92 from December 12, 1997, issuing the regulation of exploitation of rooms of type A slot machines and full casinos.
• Resolution No. 77 of August 4, 1999, approved regulations on the operation of agencies that exploit bets on sporting events.
• Resolution No. 25, of August 28th, 2003: It approves regulations for the functioning of the bingo halls.
• Resolution No. 18 of May 15, 2001: The bingo halls are ruled concerning the prevention of money laundering activities.
• Resolution No. 28, dated December 18, 1995, Gazette 22948 for operations of electronic machines powered by use of coins, paper money, tokens, or credit system.
• Law No. 23, dated April 27, 2015: This relates to the prevention of money laundering, financing of terrorism, and the financing of the proliferation of weapons of mass destruction.

Until recently, operators licensed in Panama were not permitted to offer their services to residents of Panama. With September 2020, the Panamanian operators are allowed to have up to 5 domains ending with “.pa”, which made Panama a fully regulated gambling market where you can legally offer your gambling services in addition to international customers.

Panama

Capital	Population	Currency	GDP
Panama City	4,337,768	PAB	$40,177

Types of gambling licenses in Panama

Depending on the nature of intended gambling activities, a number of license types are granted in Panama. Some employees will also be required to obtain specific types of authorization to perform gambling operations. Below, we would like to share the information about the main gambling licenses for operators. For the receipt of deep insight into the types of license and authorizations applicable to your model of a gambling business, we invite you to reach our legal consultants here at Regulated United Europe for scheduling a personalized consultation.

The main types of licenses, which exist in Panama, are as follows:

• Online Gaming License: allows companies operating in the territory of Panama, or hosted there, to initiate online international wagering operations.
• Casino License: allows operators of gaming enterprises to operate a casino within hotels and resorts in Panama.
• Sports Events Betting Agency License: applies to companies organizing bets on numerous types of sports events broadcast from different countries around the world.
• Register of Type A Slot Machine Providers, Gaming Devices, or Associated Equipment enables service providers of the gambling industry to work with Panamanian gambling operators.
• Type C Gaming Machine Hall License – regarding slot machines parlors

According to the Panamanian law, an online gaming activity is called Systems for Electronic Communication Games, while a license-its Administration/Operation Contract with the Gambling Control Board. A Master License is provided for carrying on a business of electronic games of chance and wagering activities; it also entitles licensees to issue sub-licenses. A Master License is issued against payment of the license fee of 40,000 USD (approx. 36,000 EUR). Subsequently, after payment of the license fee, it comes with an annual license fee of 20,000 USD (approx. 18,000 EUR).

Panamanian licensees are not allowed to organize any wager event for the following:

• Proliferation of amateur sporting events that take place within the Republic of Panama.
• Events that have taken place abroad with public or private participation, provided the respective institutions are registered in the Republic of Panama.
• Elections to a public office, wherever it takes place.
• Events performed with the intervention of a professional team whose home is in the Republic of Panama.
• Any event taking place in Panama where there is a professional team, whose directors of the governing league request not to allow any betting, whenever such a request reaches the Gambling Control Board at least 30 days before the commencement of the respective event.

GAMBLING LICENSE IN PANAMA

Requirements for Panama Gambling License Applicants

Whereas a number of license applicants must fulfill different requirements concerning the license type to be issued to them, there are general prerequisites that every applicant is bound to comply with. They include the provision of proof that persons concerned have never been convicted of crimes, the elaboration of the proof that the game pay-off is as per internationally acceptable parameters, proof that the financing proposed for the operation is proper and is from legal and acceptable sources, and compliance with national and international anti-money laundering laws.

To apply for any of the gambling licenses in Panama, you need to basically comply with the following requirements:

• Appoint an attorney in law in Panama
• Incorporate an overseas corporation in Panama
• Allow the investigation of the company history and integrity and pay the corresponding non-refundable fees and costs
• Prove that you possess the experience and knowledge needed to manage intended gambling operations

Regarding licensing fees, the Panama Gambling Control Board would provide an applicant with an itemized report of costs and costs accrued through the investigation that an applicant was responsible to pay upon the request of the authority. The authority will have made a final decision only if the applicant pays all of the costs and fees of the investigation in full. The application is, in effect, refused without full payment, whatever the merits of an applicant. If a sum deposited by the applicant to cover at least the provisional costs and fees of the investigation, such balance as is not expended by the authority in the course of the investigation may be refunded to the applicant.

Whether you apply for either an Administration/Operation Contract for your online gambling business or a Land-Based License or a Sports Betting License, the following documents should be submitted:

• Power of attorney, whereby a lawyer is authorized to carry out the process.
• A business plan.
• A Public Registry Certificate of the applying corporation.
• Feasibility study from a consulting firm not owned by the applicant, evidencing the feasibility of the intended gambling business.
• Evidence that the applicant is in a financial position to meet its commitments, undertake and develop its proposed operations and provide working capital as required by the business plan
• Evidence that the applicant is able to identify satisfactorily the gamblers and/or the source of their funds
• Copies of passports of directors, shareholders, and other officers named in the application
• Copies of agreements with the providers of hardware or software for conducting the gambling business
• Letter from a bank recommendation, which provides information about accounts
• The authenticated copy of documents certifying structure of the corporation
• Description of the financial structure of the corporation. List of all outstanding shares as well as the list of the shareholders’ rights
• A certificate by the corporate secretary listing the names of each shareholder
• A certificate from the corporate secretary stating all outstanding loans, encumbrances, mortgages, obligations and other liabilities
• A certificate from the corporate secretary listing the names of employees whose benefits, wages, or fees match the 10% highest amounts on the payroll, whether or not they are directors, officials, officers, or employees in lower positions
• A description of the practices the company follows for issuing bonds and sharing profits
• Copy of the agreements or sub-agreements executed in connection with the games’ operations.
• Statement of profit and loss prepared by a certified public accountant authorized for the practice of the profession, for 3 fiscal years preceding the date of the licensing request; if the period of operation of the company is less than 3 years, this statement shall correspond to the whole period of said operation.
• Copies of the last 3 years of Income Tax returns (in the case of a company, which hasn’t been in operation for at least 3 years an estimated income tax return is sufficient)
• A manual of internal control methods arranged according to the acceptable standards for internal control procedures
• Documents describing the organization’s experience or/and employees who develop gambling operations, including experience and knowledge in the administration of informational systems.
• Documentation of the personal, criminal commercial and financial record of each director, officer trusted employee, and each shareholder who owns at least 10% of the shares of applicant company and of any person who has a significant relationship with the proposed operation, detailing the 10 years prior to the date of presentation of the corresponding application.

The application must also include the following information:

• Applicant company’s name
• Date of registration, legal representative, directors, and officers of the applicant corporation
• Names of all persons directly or indirectly concerned in the proposed operations and the nature of their interests
• In the case of online gambling businesses, the names of the suppliers of the hardware or software of the System for Electronic Communication games to be used and all terms and conditions regulating its relations with these suppliers
• In the case of land-based casinos, the place where the game room is located
• In the case of a sports events betting agency, the place of location of the sports event betting agency(s)

The business plan shall contain the following information:

• Remote gambling operators: Specify the hardware and software for gambling to be used in the operations, a detailed description of games to be offered, and the markets to penetrate.
• Casinos: Specify how many amusement arcades the applicant intends to operate, where these would be located, and how many and what type of gaming tables and slot machines of Type A to be operated by the casino.
• For sports events betting agencies the amount of sports events betting agencies that are to operate and where, the sport to be relayed as well as the types of bets that could be taken

An application business, to the Registry of Type A Slot Machine Providers, Gaming Devices, or Associated Equipment must also provide the following:

• An affidavit from the manufacturer, in which it declares that it will manufacture, sell, and/or distribute gaming devices or associated equipment only that fully comply with all applicable Panamanian laws and regulations.
• Certified check for 1,000 USD – approx. 912 EUR in favor of the National Treasury for the Registry of Suppliers.

The Top Panama Casino Sites

Application Process for Gambling License in Panama

Provided that all the required documents are duly prepared and filed, the processing usually takes 1-2 months. In case the applicant fully withdraws the application, it is possible to reapply only after one year.

The major milestones of applying for a license in Panama:

• Deposit payment, at the discretion of the Gambling Control Board, for the purpose of being able to commence the investigation process
• Forwarding the application, in a form approved by the authority to the Gambling Control Board for investigation
• The right of the authority to summon all the persons whose names appear in the application to attend and give testimony before the competent persons – their failure to attend may lead to a refusal of the application

No information referring to the shareholders, financial data, the board of directors, or gaming systems can be modified after the submission and commencement of the investigative processes. In any event, if modification cannot be avoided, the applicant must withdraw the submitted document and resubmit it upon amendment.

Through the investigative process, the authority ascertains the integrity, experience and qualifications as well as the financial soundness of the applicant to ensure that a license is only issued to a competent and reliable business capable of protecting players, public interests and the good name of the jurisdiction. In the end, the authority may delegate the investigation to private agencies.

How to set up a gambling company in Panama

There are different types of legal business entities in Panama, but it does not have a separate type of corporation solely to conduct its business outside of Panama. The most common is the Sociedad Anonima, referred to as a Panama Corporation, and it’s said to be a Corporation of Shares since it is perfectly suitable for international businesses as foreigners can own 100 percent shares.

There is no legal obligation to declare the shareholder’s name, and the shareholders’ assets are separated from the corporation. However, the information of the shareholder has to be presented to the bank in which the corporation is going to open an account. You will quite easily be able to establish this form of corporation because the process is not complex and is reasonably priced. You can establish a Panama Corporation in 5 working days if all the required documents are submitted accordingly.

Panama Corporation – Main Requirements:

• Minimum 2 individual founders called subscribers are needed; no residence or citizenship requirements.
• 3 directors, with the titles, respectively – president, secretary, and treasurer, who can also be one person holding all 3 positions, either natural or legal person.
• At least one shareholder is needed. This should be a natural or legal person who needs to be present after the incorporation to receive the issuance of at least one share.
• Share capital – 10,000 USD (approx. 9,000 EUR) though there are no statutory requirements regarding this matter
• A resident agent that may be a lawyer or a law firm from Panama, which is able to take part in legal procedures on behalf of the corporation

Required Documents for Establishment of a Panama Corporation:

• Articles of Incorporation
• Copies of passports of subscribers, shareholders, directors, and a resident agent
• Proof of the address of each director and a resident agent.
• Minutes of the Board of Directors authorizing registration in Panama
• A copy of the recent financial statements
• Evidence of the capital transfer for the operations in Panama
• A certificate from the Panamanian Consul certifying that the organization of the company has been established according to the law of the place where it has been subscribed

This is the procedure involved in the set-up of the Panama Corporation:

• Founders book a legal company name that includes one of the following suffixes: Incorporation (Inc), Corporation (Corp.), or Sociedad Anónima (S.A.)
• Subscribers sign the deed of formation of the Articles of Incorporation before the Public Notary in Panama
• Optionally, one opens a corporate bank account with a bank in Panama although the bank accounts can also be opened at foreign banks
• The Articles of Incorporation are inscribed in the Public Registry of Panama, an act of incorporation
• Once a company is incorporated, company shareholders are appointed on a physical share certificate
• The company registers with the, to obtain a Tax Identification Number.
• The company is registered in the Sistema de Panama Emprende, dependent on MICI in order to obtain an Operation Notice.
• The company registers at the municipal level with the Treasurer of the corresponding municipality where the company’s headquarters are located.
• The company is registered with the Social Security Fund.

If you believe that Panama is a jurisdiction with good prospects for your gambling business, then our team of gambling license consultants here at Regulated United Europe will certainly be glad to guide you through the process of company incorporation and application for an acquired license in Panama. With the help of our legal advisors, tax experts, and financial accountants, the process of incorporation and application will be easy and smooth, crystal clear. Call us now to schedule a consultation tailored to your individual needs, and lay the foundation for enduring success.