Advantages and Disadvantages of Online Gaming Licensing in Panama
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Want to tap into the online gaming industry and consider Panama as your base? Here is a comprehensive guide looking at the pros and cons, costs and process of obtaining an online gambling license in this Latin American country.
Panama is particularly known for its strategic geographic location, modern infrastructure and favorable rules due to its specific online gambling law.
Understanding the landscape
The Panama Gaming Control Board, also known as the Junta de Control de Juegos, is charged with regulatory oversight of the gambling industry, including the issuance of licenses for online gambling. Thanks to favorable legislation, tax breaks and modern infrastructure, Panama is an attractive prospect for online gambling operators.
Panama Gaming License Benefits
1. Tax Advantages: Panama operates with a territorial tax system.
This means that online gaming entities incorporated in Panama but operating outside of it will not have to pay income tax on their worldwide earnings.
2. Privacy Protections: The Panamanian legal system offers significant privacy protections to companies and their owners by keeping their identities out of the public domain.
3. Global Operations: Panama places no restrictions on the geographic scope of online gambling services.
4. Political and Economic Stability: Panama has a stable political and economic landscape, making it an attractive jurisdiction for online gambling businesses.
Disadvantage of Panama Gaming License
1. Regulatory challenges: Acquiring an online gambling license in Panama involves dealing with complex regulatory standards that could be demanding without the right legal advice.
2. Limited domestic market: Although Panama is a major center for online gambling, its domestic market is relatively small. Most online gambling companies in Panama primarily serve international markets.
3. International perception: Panama has always faced challenges related to transparency and money laundering, which have had a negative impact on its international reputation.
The path to your license
Step 1: Incorporation: The first step is to incorporate a corporation in Panama. It can be either a newly created company or a company registered abroad.
Step 2: Submitting the Application: After incorporating a company, submit an application to the Panama Gaming Control Board with detailed information about your company, its main players and the games you want to offer.
Step 3: Pay License Fee: Upon approval, you pay the initial license fee and annual license fee.
Step 4: Technical Assessment: Upon payment of the fee, a technical assessment of your online gaming platform will follow to determine its fairness and safety.
Step 5: Obtaining the license: The gaming control commission issues the license if the audit results are satisfactory.
Cost implications
The initial cost of applying for a license in Panama, as of my last update, was $40,000. In addition, there is an annual license fee of $20,000. Other possible expenses include legal and financial advisory fees and costs associated with setting up and maintaining the online gaming system.
Banking and payment systems
Online gaming companies licensed in Panama generally have access to a wide variety of banking and payment systems. Several international and local banks provide corporate banking services to such businesses, including account opening and transaction processing. Furthermore, online payment platforms, credit card processors and cryptocurrency payment gateways can be integrated into your gaming platform to facilitate transactions with players from all over the world.
Finally, obtaining an online gambling license in Panama, while involving complex regulations, can be very beneficial to the right company. As with all legal and financial ventures, due diligence and professional advice are highly recommended before embarking on this journey.
