When considering a cryptocurrency license, Panama and Lithuania present two distinct options, each with its own advantages, costs, and regulatory environments. Here's a comparison of what each country offers for crypto-related businesses.
Why Choose Panama?
Panama is an attractive option for companies looking to operate in the cryptocurrency space due to its favorable tax regime and ease of incorporation. The key benefits include:
0% Corporate and Dividends Tax: Panama does not impose corporate or dividends tax, making it a tax-efficient jurisdiction for businesses.
Confidentiality: While the director's information is public, shareholder and Ultimate Beneficial Owner (UBO) details remain confidential, providing a level of privacy.
No Physical Presence Required: The entire process can be completed online, eliminating the need for a physical visit or mailing documents.
Minimal Accounting Requirements: There is no need for regular accounting. Only one invoice, contract, or agreement needs to be submitted within four months from the financial year-end, kept solely for internal records.
Legal Activities Permitted: Businesses licensed in Panama can engage in various activities, including exchange services, over-the-counter (OTC) trading, Initial Exchange Offerings (IEO), crypto-to-crypto and fiat transactions, utility token exchanges, issuing branded debit cards, crypto fund activities, custodial services, futures, shorts, and NFT minting and trading, among others.
Cost and Process:
Cost: €4000, covering the notarization for three individuals. Additional notarization costs €250 per person.
Requirements: At least three directors are required.
Timeline: The registration process takes approximately 21-28 days.
Learn more about Panama crypto license.
Lithuania Crypto License
Why Choose Lithuania?
Lithuania is another strong contender, particularly for businesses that plan to engage in more extensive crypto operations within the European Union. Some key advantages include:
Robust Licensing Options: Lithuania offers licenses for cryptocurrency exchanges, crypto wallets, and custodial services, providing a comprehensive regulatory framework.
Access to EU Markets: With a Lithuanian license, businesses can operate across the EU, taking advantage of the single market.
Banking Flexibility: Companies can open EUR bank accounts, facilitating smooth crypto-to-fiat and fiat-to-crypto transactions.
Legal Activities Permitted: Lithuanian licenses allow for exchange services, OTC trading, IEOs, utility token transactions, crypto-to-crypto and fiat transactions, utility token exchanges, issuing branded debit cards, crypto fund activities, custodial services, futures, shorts, NFT minting, and staking. Moreover, euro deposits and withdrawals are possible, with fiat-to-fiat transactions requiring stablecoins.
Cost and Process:
Cost: The total cost for company and license registration is €20,000.
Requirements: A share capital of €125,000, a bank account, and a local director and AML officer are required. A virtual office is also necessary.
Timeline: The process involves multiple steps, including payment, company registration, and obtaining the necessary licenses, with an initial €10,000 payment to start.
Learn more about the Lithuania crypto license.
Conclusion
Panama offers a cost-effective and tax-efficient solution with minimal ongoing obligations, making it ideal for startups or businesses seeking confidentiality. In contrast, Lithuania provides a more structured and regulated environment within the EU, suitable for companies aiming for broader market access and a solid banking infrastructure. The choice between Panama and Lithuania ultimately depends on your business priorities, whether they are focused on cost-efficiency, tax advantages, or regulatory robustness within the European market.
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