🇵🇦Panama

Panama should be treated as a conventional offshore structuring jurisdiction, not as a purpose-built DAO jurisdiction.

Rule

the Panamanian materials reviewed provide private interest foundations under Law 25, corporations under Law 32, securities-market regulation, AML/CFT regulation, beneficial-owner registration, and tax rules. There is no located primary Panamanian statute that creates a DAO LLC, DUNA, DAO association, DLT foundation, statutory token-based membership, algorithmic-management legal status, or governance-token securities safe harbor.

Application

a DAO using Panama must map its legal architecture into an ordinary form. The principal options are a private interest foundation for protocol stewardship and treasury/IP holding, or a corporation for an operating company or DevCo. This can solve off-chain legal-personhood problems, but it will not make token votes automatically binding legal acts. Panama solves the core wrapper concern through ordinary legal forms rather than DAO-specific legislation.

Limitation: absence of a DAO-specific statute is an absence finding from the reviewed official sources, not a guarantee that no private registry practice, administrative opinion, or later bill has emerged after the sources checked. The VASP legislative record itself shows that digital-asset law is under active consideration.

the Panamanian private interest foundation is the strongest Panama candidate for protocol stewardship, but it is not a member-governed DAO.

Rules

• Law 25 allows one or more natural or legal persons to create a private interest foundation by dedicating a patrimony exclusively to the objectives or purposes stated in the foundation charter. It also provides that private interest foundations are governed by the foundation charter, regulations, Law 25, and other applicable legal or regulatory provisions.
• Law 25 provides that registration in the Public Registry gives the foundation legal personality and that the foundation may acquire and possess property, incur obligations, and be party to administrative and judicial proceedings.

Application

for DAO purposes, this is a real wrapper. A foundation can hold protocol treasury assets, receive or license IP, enter contributor agreements, make grants, contract with service providers, receive legal notices, and sue or be sued. It therefore addresses the off-chain capacity problem.

But the foundation's legal governance is not token-native. Token holders are not statutory members merely because they hold governance tokens. The statute does not say that smart contracts are the governance mechanism. The foundation's charter, regulations, council resolutions, protector powers, and contracts must translate any token-vote process into legal action.

The best fit is a non-distribution protocol foundation: ecosystem grants, open-source support, public-goods financing, protocol stewardship, treasury custody, standards support, or IP holding. The poor fit is a DAO whose token holders are intended to own the treasury, receive protocol revenues, redeem against assets, share liquidation proceeds, or take investment returns.

a Panamanian private interest foundation is structurally adverse for revenue-sharing token economics.

Rule

Law 25 states that private interest foundations may not pursue profit-making purposes. It permits non-habitual commercial activities or exercise of rights from shares in commercial companies included in the foundation patrimony, provided that the economic result or product of those activities is dedicated exclusively to foundation purposes.

Application

this is the central DAO limitation. A foundation may hold appreciating assets, receive income, own shares, fund services, pay contributors, or finance projects if the proceeds remain dedicated to the foundation purposes. That is compatible with many protocol-stewardship models.

It is not compatible with a token model designed to distribute profits to token holders. A governance token with fee-share, buyback entitlement, redemption right, asset claim, treasury claim, dividend, liquidation right, or investment yield would be difficult to reconcile with a private interest foundation's non-profit-making purpose. It may also create securities, investment-company, tax, AML, and foreign-law problems.

A Panama foundation can have beneficiaries and can make distributions under its charter and regulations, but for a DAO wrapper that is not the same as permissionless token-holder profit sharing. Any beneficiary-payment architecture must be tied to lawful foundation purposes and not be a disguised profit-distribution mechanism.

a Panamanian private interest foundation is council-mediated and compliance-mediated; it is not managerless.

Rules

• Law 25 requires a Foundation Council. If the council members are natural persons, the council must have at least the statutory minimum number of natural persons; if a legal person is used, the charter can structure the council accordingly.
• the Foundation Council administers the foundation's property and enters into acts, contracts, or lawful business necessary or convenient to fulfil the foundation object. Law 25 also allows organs of protection or supervision, and the Council is not responsible for actions approved by the protector or supervisory organ if that approval was required and obtained.

Application

token governance can be integrated only through drafting. The foundation charter or regulations may provide that certain actions require token-holder approval, that a protector must verify the vote, that a council may act only after a governance proposal passes, or that token votes are advisory input. But the Council, protector, and any officers still need compliance vetoes for unlawful, purpose-inconsistent, sanctions-sensitive, tax-adverse, or regulated activity.

This is closer to Cayman and Switzerland than to RMI. The foundation can mirror token governance, but it cannot simply point to smart contracts as the statutory source of legal authority in the way a purpose-built DAO LLC may do under its own statute.

a Panamanian corporation is a conventional operating-company tool, not a governance DAO wrapper.

Rules

• Law 32 permits two or more adults, of any nationality and whether or not domiciled in Panama, to form a corporation for any lawful object. The corporate charter must identify, among other matters, the corporate objects, capital, registered agent, duration, and at least three directors.
• Law 32 gives corporations powers to sue and be sued, acquire and transfer property, appoint officers and agents, enter contracts, borrow, issue obligations, and do what is necessary to carry out their objects.
• the corporation's business is administered by a board of directors of at least three members, and the board has absolute control and full direction of the corporation's business subject to law and the charter; the board may exercise all corporate powers except those reserved to shareholders by law, charter, or bylaws.

Application

a Panamanian corporation can work as a DevCo, IP licensee, services company, local operating company, or treasury-administration company. It can employ people, enter ordinary commercial contracts, invoice, provide development services, and interact with banks and vendors.

It is not a good primary wrapper for a public DAO whose legal governance is meant to track token holders. Shareholder and director governance are corporate-law concepts. Token votes can be contractually reflected, but directors and officers remain legal actors. If a token vote directs the company to breach law, misapply assets, violate sanctions, conduct unlicensed securities activity, or impair capital unlawfully, the board cannot treat the vote as self-executing legal authority.

Panama can provide entity-level liability separation for a properly used corporation or foundation, but token holders should not be assumed to receive statutory member protection unless their role is legally mapped into the entity.

Rule

Law 32 provides that certain shares are considered fully paid and released, and holders are not responsible for those shares either to the company or to its creditors. It also provides that registered shares transfer on the company's books and do not bind the company until recorded in the share register.

Application

for a corporation, liability protection is shareholder-based and share-register-based. It does not automatically protect holders of a freely transferable governance token who are not shareholders. If the DAO wants token holders to be shareholders, then corporate-law transfer, register, beneficial-owner, resident-agent, and securities consequences become severe. If token holders are not shareholders, they may have governance influence only under contract, bylaws, side letter, protocol terms, or foundation regulations.

For a foundation, the analysis is different because there are no shareholders in the ordinary corporate sense. The foundation's liabilities belong to the foundation as legal person, but founders, council members, protectors, controllers, agents, officers, and signers can create their own exposure by conduct, office, contract, tort, AML breach, sanctions breach, securities activity, or regulatory status.

The unwrapped-DAO risk in Panama should be framed cautiously. There is no located Panamanian DAO case treating token voters as partners. The risk is instead that an unwrapped group with Panama facts could be characterized under ordinary civil, commercial, agency, association, partnership, tort, or securities doctrines. Passive token holding is materially different from founding, signing, treasury control, promotion, front-end operation, or active governance execution.

Panama has no governance-token safe harbor; tokens must be analyzed by rights and economic substance.

Rules

• the Securities Market Law defines "valor" broadly to include debt instruments, shares, custody-account rights, participation quotas, participation certificates, securitization certificates, fiduciary certificates, deposit certificates, mortgage bonds, options, and any other title, instrument, or right commonly recognized as a security or determined by the Superintendencia to constitute a security.
• the same law defines an "oferta" as a declaration, proposal, or manifestation made to sell, transfer, or dispose of securities for consideration, including solicitations to induce purchase offers.
• only persons with the corresponding Superintendencia license may carry on the business of broker-dealer or investment adviser in Panama or from Panama, regardless of whether the securities involved are registered with the Superintendencia.

Application

a pure governance token with no economic rights, no asset claim, no revenue share, no redemption, no treasury participation, no liquidation right, and no investment-return marketing is easier to defend. But Panama does not give a statutory conclusion that such a token is not a security.

The risk increases sharply if the token gives holders a right to protocol fees, foundation assets, issuer assets, profits, dividends, buybacks, redemption, liquidation proceeds, debt repayment, fiduciary participation, fund interests, or pooled investment returns. The risk also increases if the Panama entity or persons in Panama solicit purchases, arrange placements, advise token purchasers, operate secondary markets, manage portfolios, or administer a pooled treasury.

Investment DAO structures require separate analysis. The law defines a sociedad de inversión as a juridical person, trust, or contractual arrangement that issues and sells participation quotas to obtain money from the investing public for investment and trading in securities, currencies, metals, commodities, real estate, or other assets determined by the Superintendencia. The private investment company definition is narrower and depends on offering and ownership restrictions.

Panama does not currently present a clean, enacted VASP wrapper regime from the official materials reviewed; legislative proposals are active.

Rule

the National Assembly reported in 2025 that a draft bill was presented to create a legal framework for supervision, registration, and control of virtual-asset service providers in line with AML/CFT standards. It further reported that bill 326 was discussed in committee and sent to a subcommittee for a technical working table. In January 2026, the Assembly reported that there were several bills addressing virtual-asset service providers, licensing regimes, and fiscal treatment that required harmonization.

Application

governance-token use alone should not be described as a regulated VASP service under a Panama-specific enacted VASP statute unless and until such a statute is enacted and applies to the facts. But "no enacted VASP law located" is not a regulatory safe harbor. If a Panama entity or Panama-based actors operate exchange, custody, transfer, investment, brokerage, payment, banking, fiduciary, securities, fund, or money-movement services, other laws can apply.

For a DAO, the highest-risk facts are custody of user assets, hosted wallets, bridge or relayer control, exchange interfaces, order routing, liquidity programs, token placement, market making, token-sale support, investment advice, portfolio management, lending, derivatives, or payment activity. Those facts must be analyzed under securities, banking, AML/CFT, consumer, tax, and future VASP rules.

Panama is not an anonymity jurisdiction for legal wrappers.

Rules

• Law 23 brings lawyers and authorized public accountants into the supervised non-financial perimeter when, for a client or on behalf of a client, they engage in activities including administering money, securities, or other client assets; organizing contributions for creation, operation, or administration of legal persons; creating, operating, or administering legal persons or legal structures such as private interest foundations, corporations, trusts, and others; arranging directors, registered addresses, shareholders, trust participants, or resident-agent services.
• Law 23 requires financial and non-financial obliged persons to identify, evaluate, and understand their AML/CFT/PF risks, document risk assessments, keep them updated, and apply appropriate mitigants. It also requires due diligence, reasonable verification, and documentation, with customer and beneficial-owner identification depending on risk.
• for legal persons, Law 23 requires diligence over persons acting as administrators, representatives, attorneys-in-fact, beneficiaries, and signatories; for private interest foundations, financial obliged persons must ensure adequate, precise, and timely information on beneficial ownership, foundation council, and founder. Records must be updated and retained for at least the statutory period after the professional relationship ends.
• Law 129 creates a private and access-limited beneficial-owner registry for legal persons constituted or registered under Panamanian law. The resident agent must file entity and beneficial-owner data, and the legal person must supply the resident agent with the required information.

Application

ordinary token holders may not require KYC merely because they hold a non-legal-membership governance token. But founders, council members, protectors, directors, officers, signatories, resident-agent contacts, beneficial owners, controllers, customers of regulated services, grant recipients, treasury counterparties, and persons receiving distributions or payments may fall inside the diligence perimeter.

A Panama DAO wrapper should therefore be built with a compliance layer. "Token-holder privacy" is possible only if token holders are not legal shareholders, legal members, beneficial owners, customers of a regulated service, or payment recipients requiring screening. A structure that tries to make every token holder a legal shareholder, beneficiary with economic rights, or member will create administrative and compliance friction.

Panama legal persons are not paperless shells.

Rule

Law 52 of 2016 requires legal persons that do not perform operations perfected, consumed, or effective in Panama, and legal persons that exclusively hold assets inside or outside Panama, to keep accounting records and supporting documentation. The records must be kept for at least the statutory period, may be kept with the resident agent or elsewhere, and legal persons must provide records or record-location information to the resident agent.

Application

a DAO foundation or corporation that holds a token treasury, equity, protocol IP, or other assets should expect accounting-record obligations. For a token treasury, this means wallet addresses, asset balances, inflows, outflows, grants, service payments, token receipts, custody arrangements, valuation support, and off-chain records should be organized. The more the DAO uses multiple wallets, multisigs, bridges, DeFi positions, or sub-treasuries, the more important the accounting design becomes.

Panama is territorial, but not automatically tax-free for a DAO wrapper.

Rules

• the Fiscal Code, as amended, taxes taxable income produced from any source inside the territory of Panama, regardless of where received. DGI materials also describe the corporate income-tax tariff applicable to Panamanian legal persons.
• Law 8 of 2010 confirms that taxable income is determined by deducting foreign-source income, exempt or non-taxable income, and deductible costs and expenses from gross or general income.

Application

a Panama foundation or corporation holding non-Panama assets or receiving foreign-source income may have a materially different Panama tax position from an entity performing services, development, management, custody, exchange, licensing, or commercial operations inside Panama. The tax answer depends on source of income, place of services, IP location and exploitation, personnel, control, resident-agent and accounting records, treasury income, token-sale proceeds, protocol fees, and whether the entity has Panama-source revenue.

Foreign tax remains separate. U.S., EU member-state, UK, Singapore, Swiss, UAE, or other founders, developers, token holders, treasury signers, DevCos, and users may have domestic tax, withholding, payroll, CFC, VAT/GST, permanent-establishment, or reporting obligations. Panama incorporation does not answer those questions.

DAO treasury execution through a Panama wrapper requires sanctions-screening and freeze controls.

Rule

Law 23's preventive-freezing regime requires obliged persons to immediately freeze funds, goods, or assets upon receipt of UN Security Council lists under the relevant resolutions, suspend transactions where a match exists, notify the Unidad de Análisis Financiero, and not unfreeze assets until judicial notice.

Application

a Panama foundation council, corporation board, resident agent, bank, custodian, regulated service provider, or other obliged person should not blindly execute token-voted payments. Grants, airdrops, contributor payments, token redemptions, treasury swaps, liquidity incentives, bridge flows, vendor payments, foundation distributions, and exchange activity require sanctions screening if the Panama legal wrapper or obliged service provider is involved.

The governance documents should therefore include a compliance override: a token vote that would cause a sanctions breach, AML/CFT breach, unlawful transfer, or freeze violation should not be executable as a legal act.

Panama has a material external tax-list issue.

The Council of the EU currently lists Panama in Annex I of the EU list of non-cooperative jurisdictions for tax purposes. The Council page states that the latest revision took place in February 2026 and the next revision is due in October 2026.

FATF's current high-risk jurisdictions subject to a call for action are DPRK, Iran, and Myanmar, and its current increased-monitoring list does not include Panama.

The European Commission's current AML high-risk third-country list reviewed here does not include Panama.

Application

Panama may still be usable for some DAO structures, but the EU tax-list status can be a serious practical obstacle. Banks, custodians, exchanges, EU investors, institutional counterparties, grant recipients, and regulated service providers may apply enhanced scrutiny or decline Panama entities for tax-governance reasons even where Panama domestic law permits the structure.