The pitch is familiar. A corporate agent offers a Panamanian or Costa Rican company, a bank introduction, a nominee director if you want one, and the sentence that does all the damage: you will not need a financial licence because you are only serving clients outside the country. That last part is sometimes accurate as a matter of local law. It is almost never accurate as a description of what the rest of the world will do with your company.
What each regulator actually covers
Panama's Superintendencia del Mercado de Valores, the SMV, supervises the securities market: it licenses brokerage houses, investment advisers, administrators and the market infrastructure, and it registers the executives who work at them. Panama also has a separate banking supervisor and a separate insurance supervisor, plus an authority that oversees non financial designated businesses. A Panamanian brokerage house licence is a real authorisation with real obligations, including capital scaled to the permissions, reporting and an anti money laundering programme.
Costa Rica works through CONASSIF as the governing council, with SUGEVAL supervising the securities market, SUGEF supervising financial entities and SUGESE insurance. SUGEVAL authorises the intermediaries operating in the domestic securities market. Costa Rica has also brought virtual asset service providers into registration for anti money laundering purposes, which is a supervision hook rather than a product licence.
Here is the part that gets skipped. In both countries the ordinary company that a corporate agent sells is not inside those regimes. It is a corporate vehicle. It has no licence, no supervisor reading its client money arrangements, and no register a prospective client can look it up on. Calling it regulated because the country has a regulator is exactly the confusion we picked apart in licence versus registration.
Serving clients abroad does not make the problem disappear
The territorial argument only answers the local question. It does not answer the question asked by the country where the client lives. If a Panamanian company solicits retail clients in the European Union or the United Kingdom, the relevant supervisor there considers that firm to be providing investment services in its territory without authorisation, and it will say so publicly. The company being lawfully incorporated in Panama is not a defence in Frankfurt. We went through the mechanics of this in offshore marketing to EU clients, and the conclusion is blunt: for a firm serving European retail clients, this route does not work.
This is descriptive, not advice. Panamanian and Costa Rican requirements, including economic substance and beneficial ownership reporting, have changed repeatedly. Retain counsel in the country before you incorporate anything.
Banking is where the jurisdiction rating bites
Both countries have carried international scrutiny. Panama has appeared on and left the Financial Action Task Force list of jurisdictions under increased monitoring, and both countries have featured in European Union tax transparency listings at various times. The effect of any of those listings is not a legal prohibition on doing business. It is a rating input. A correspondent bank runs a country risk score, an entity risk score and a product risk score, and a listing pushes the first one up. The response is enhanced due diligence, more documentation, longer onboarding, and in a lot of cases a decision that the relationship is not worth the file. That is de risking, and it is described more fully in the effect of FATF grey listing.
Stack the scores the way a reviewer does. Country risk elevated by listing history. Entity risk elevated by an unlicensed corporate vehicle with a nominee director. Product risk elevated by leveraged retail trading, which sits in the categories card schemes monitor most closely. Three elevated scores in one file is a decline, and no amount of explanation changes an automated risk model.
Who accepts these companies, and for what
Acceptance splits by counterparty type. Corporate service providers accept them, obviously, because they sell them. Some payment providers will process for them under high risk pricing with a rolling reserve, and the account survives as long as chargebacks stay under the scheme monitoring thresholds. Tier one correspondent banking and institutional prime relationships generally do not accept an unlicensed offshore vehicle as a counterparty, because their own supervisors expect them to know who they are facing and what authorisation that counterparty holds. Liquidity providers apply the same test from their own compliance side.
Advertising is its own gate. Financial services categories on the large advertising platforms generally require an advertiser to declare a licence or a recognised exemption for the country being targeted, and a plain incorporation does not satisfy that. App store review applies a similar standard to trading applications. A firm that plans to acquire clients through paid channels should confirm eligibility before it builds the funnel, not after.
Where these jurisdictions genuinely fit
There are honest uses. Panama has a real licensing regime, and a firm that applies for a brokerage house licence and operates under it is a supervised firm with a public register entry. Costa Rica is a serious place to run an operations centre, with staff, offices and Spanish language support for a regional client base, sitting under a licensed entity somewhere else. Panama City appears on our locations pages for that reason: it is a working hub, not a mailbox.
What does not work is the version sold on a website: an unlicensed vehicle, a nominee, a payment account rented from someone else, and marketing aimed at regulated markets. That structure fails at the bank, then at the acquirer, then at the ad platform, usually in that order and usually after the founder has spent the launch budget. Decide the licensing question first and build the technology around it. SINGUARD supplies the software layer, the platform, the CRM and the client portal. The perimeter is yours to draw, with a lawyer, before you take a client's money, and leveraged trading stays high risk for that client whatever the letterhead says.
"An incorporation certificate is not a licence. I have watched more than one founder discover the difference at a bank counter."
— Alex Onta, Executive Director, SINGUARD
Key Takeaways
- Panama's SMV and Costa Rica's SUGEVAL supervise real securities intermediaries; an ordinary incorporated company is not one of them.
- Territorial rules answer the local question only; the client's home regulator applies its own authorisation test.
- Listing history feeds country risk scores, and elevated country, entity and product risk in one file usually means decline.
- Ad platforms and app stores ask for a licence declaration for the country targeted, which an incorporation cannot supply.
Frequently Asked Questions
Does a Panama company let me run a brokerage without a licence?
No. Panama licenses brokerage houses and other securities market participants through the SMV. An ordinary Panamanian company is a corporate vehicle with no financial authorisation. Whether your specific activity requires a Panamanian licence, and what the client's home country requires, are questions for counsel in both places.
Why do banks decline Costa Rican and Panamanian trading companies?
Because of how risk scoring works. Listing history raises the country score, an unlicensed vehicle with nominee officers raises the entity score, and leveraged retail trading raises the product score. Correspondent banks and their compliance teams decline files that score high across all three, not because the jurisdiction is illegal but because the relationship is not worth the monitoring cost.
Is there any legitimate reason to use these jurisdictions?
Yes. Panama has a genuine licensing regime, and a firm that applies for and holds the relevant SMV licence operates as a supervised entity. Costa Rica works well as an operations and support base for Spanish speaking clients under a licensed entity elsewhere. The problem is not the countries, it is the unlicensed shell sold as a substitute for regulation.
About the Author
Alex Onta is an Executive Director at SINGUARD. He built eTrader, the terminal, the mobile apps, eTrader Broker, Copytrading, Business and Community, along with the worldwide clustered-server infrastructure it all runs on, with his brother Roman Onta helping on the design, and he leads that division today. Together with Roman he builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals, and the two of them carry worldwide compliance, payment processing and international business structuring side by side. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.