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Forex Trading Licenses in Panama

Forex Trading Licenses in Panama

An individual can obtain a forex broker license and enter the business of trading foreign currencies.

Foreign exchange is a marketplace where one currency is exchanged for another currency and the traders can make profitable ventures due to fluctuations between currency values.

In the amended law of Panama, Article 44 defines Forex activity as the operation of selling and buying currency and coins at a price or exchange rate (Foreign Exchange Market) regularly. Article 44 further authorizes the Superintendency (the financial authority of Panama) to develop technology that the brokerage houses should maintain for the exercise of this activity.

The Superintendency 

was previously named as Comisión Nacional de Valores, but after amendment it was changed to Superintendencia del Mercado de Valores.

Forex futures and options could only be traded by companies that hold forex trading licenses in Panama while government transactions are exempt with some exceptions from the compulsory licensing.

Obtaining forex trading licenses in Panama is easier with the help of a professional consultancy firm.

You can rely on the services of our Panama incorporation experts for assistance in Forex trading and incorporation.

Our team assists those interested in applying for a special license, as well as those who require assistance to open a Forex company in Panama.

We can also give you details about immigration to Panama.

Requirements for a Panama forex trading license

If you are interested in obtaining a Panama forex trading license, then here is the list of requirements for the brokerage house:

  • – You must have a paid-up capital of a minimum of US$150,000, and you must be very dedicated to the broker-dealer house business;
  • – You must have your offices in Panama;
  • – A board of directors with proven professional and business integrity is required, or at least three individuals equivalent to the board of directors. Corporate directors are not permitted;
  • – A minimum of one third of the members of the board of directors should have knowledge and experience of the stock market or have a general experience in the financial sector. On a side note: those individuals deemed to have adequate knowledge and experience who have worked as principal executives or have done other finance-related jobs in the public or private sectors for at least two years;
  • – Every broker-dealer house appoints at least one person as a principal executive; however, the number of principal executives may change depending upon the volume of the business. These principal executives must have the corresponding licenses issued by the Superintendent;
  • – The articles of incorporation should have a corporate purpose satisfactory to the activities regarding broker-dealer house business;
  • – Pay the application fees for the application of forex trading licenses in Panama;

It is expressly forbidden to carry out or advise on the FOREX Activity without due authorization, in accordance with the provisions of article 255 of the Securities Market Law.

In addition to the requirements above, broker-dealer houses and investment advisors who engage in Forex activities are to submit a business plan to the Superintendency of the Securities Market.

Entities that receive the approval to offer Forex services in Panama are included in a list which is periodically updates by the Superintendency. Moreover, the Superintendency also issued notifications regarding entities that are not licensed to provide these services.

These are the general requirements that are necessary to be fulfilled by the applicant. For further details, you can interact with our consultants for forex licensing requirements and Panama offshore company formation.

Our immigration lawyers in Panama will answer any questions about visas and residence permits.

If you are interested in residency in Panama as an investor, you should know that the country encourages foreign investments through several programmes, including one that is destined for retired individuals, not just investors. Our team can provide you with complete details about the relevant conditions, the application requirements, and the expected processing time.

Exempted activities

The following activities are exempt from the obligation to obtain a license from Securities Houses for the exercise of the Forex activity:

  1. The exchange of currencies that is carried out on its own account and without offering to the general public.
  2. The operations of the treasuries of the banks and the Securities Houses when they are carried out on their own account.
  3. Banking operations, transfers or purchase and sale of foreign currency of banks licensed by the Superintendency of Banks of Panama, on behalf of third parties, only as a result of a foreign trade operation.
  4. Spot currency exchange operations are carried out by banks with a license issued by the Superintendency of Banks of Panama with third parties, regardless of the destination or objective of the transaction.
  5. The operations of futures, options and other modalities of operations with currencies are carried out by the banks with a license issued by the Superintendency of Banks of Panama with third parties.

The final point is valid, provided that the purchase or sale of securities in foreign currency, or that receive their returns in foreign currency.

You can get the assistance of our experts for clearing any ambiguity related to the forex trading license cost and the general incorporation process.

We can also answer any questions about Panama company formation.

How to open a Forex company in Panama

Entrepreneurs who wish to open a company engaged in forex trading can choose to incorporate in Panama.

Not only does the jurisdiction permit full foreign ownership, it also does not impose corporate income tax on income derived from outside of Panama. This includes all income generated from operations or services performed outside of Panama.

The incorporation process can be completely assisted by our team and, in addition to this, foreign investors who cannot be present in the country during the entire procedure can be represented by a member of our team who will act on their behalf.

The steps required to open a Forex company in Panama are briefly outlined below by Panamanian company formation experts:

A Forex company can work via a virtual office in Panama; for those interested in this solution, our team can give you more information on the available packages.

There is no requirement to reside in Panama for those who wish to open a company here.

Please keep in mind that the absence of corporate taxation mentioned above applies for income derived from outside the jurisdiction. If the company provides forex trading services in Panama, the corporate income tax rate is 25%.

There is no need for immigration to Panama to open this company, however, investors may explore this option.

Why is it necessary to work with a licensed broker?

licensed forex broker means that this brokerage organization has voluntarily completed the process of obtaining forex trading licenses in Panama.

Such brokers are reliable and it is safe to work with them because their work is controlled by competent organizations. In some jurisdictions brokers are not required to obtain licenses.

An unlicensed broker is also a legally registered organization although its activities are not under any check and balance by competent authorities. But it does not mean that such brokers are unreliable, the thing is that investors and traders have no guarantees when they work with such brokers.

A special council Consejo de Coordinacion Financiera coordinates actions among all the financial regulators supervising banks, coops, securities brokers, pension funds, insurance, and finance companies with the involvement without a vote of the anti-money laundering bureau of Panama and the Accounting Board. So, working with a licensed broker is more important regardless of the type of license that broker holds.

Apart from assisting clients with licensing matters, our team can also answer questions about Panamanian citizenship. If you are prepared to take this step, you should know that the country does not allow dual citizenship. If you are interested in your long-term stay options, we are here to provide you with details about the residence permits and other important matters.

3 best forex brokers in Panama

If you are planning to obtain forex trading licenses in Panama, you need to look at these three trading platforms that Panamanian traders are already using. These trading platforms are as follows:

  1. AvaTrade: it is an online broker founded in 2006. This broker offers Speed Betting trading, Social Trading, and Forex trading;
  2. XM: it was founded in 2009, and offers support to its traders in 30 languages. Around 1.3 million traders choose XM as their broker;
  3. Roboforex: it is a global broker that was founded in 2009. This broker only requires a minimum of US$1 deposit to start trading.

You can contact our consultants for details about the forex trading licenses in Panama.

You are also welcome to get any assistance related to setting up a company in Panama.

Our immigration lawyers in Panama will give you details about the residence permit you need to apply for in order to remain in the country for business purposes.

If you would like to know more about how you can remain in the country to run a trading company, our team can give you more details about immigration to Panama. We answer questions concerning residence permit eligibility, mandatory documentation, the special conditions applicable to investors in certain industries, and more. You can reach out to us for complete guidance.