Panama | Private and unique registry system for final beneficiaries of legal entities

Company registration in Panama | Law No. 129, which deals with the “Private and unique system of company registration in Panama of final beneficiaries of legal entities”

Was approved in Panama on March 17, 2020, and became law on March 20, 2020.

The objective of this new Law is that every lawyer or law firm that provides its services as a resident agent for company registration in Panama.

This resident agent must register and keep this registry up-to-date with the Superintendence of NonFinancial Regulated Subjects.

To store and protect the information contained therein, guaranteeing, in principle its confidentiality and integrity.

Also, The resident agent will be assigned a unique registration code (CUR), for access to the single system of final beneficiaries.

Panama | Private and unique registry system for final beneficiaries of legal entities

What information should be reported?

Legal entity: Name, page, registration date, address, and main activity.

Final beneficiary: Name, ID or passport number, date of birth, nationality, address, and date on which he acquired the status of the final beneficiary of the legal person.

Final beneficiary of companies with common shares listed on the local or international stock exchange.

Or owned by an international, multilateral, or State body:

• Legal Person: Name, address, country of incorporation, and name and jurisdiction of the stock exchange in which the legal person is listed.
• Final Beneficiary of a state or multilateral entity: name, address, country, and the full name of its legal representative or similar. 
• Final Beneficiary of the legal person owned by a State: full name of the country and date of constitution.

When should this information be reported? | Company registration in Panama

For new legal entities, the resident agent must register the UBO information.

Within 30 days from the date of its registration (in the Public Registry of Panama).

Or of its designation as a new resident agent.

For existing legal entities, the resident agent will have 6 months.

If the UBO of any legal entity changes, the resident agent has 30 days to report such change.

Use of Information | Company registration in Panama

The information that rests in the Single System and to which the designated officials have access will be made available to the competent authority.

Understood by these, are the Superintendency of Non-Financial Subjects, the Financial Analysis Unit (UAF), the Public Ministry, and the Ministry of Economy and Finance (MEF).

Likewise, a window is left open so that any other institution or government agency with competence to see money laundering, terrorist financing, and the proliferation of weapons, can request it and have access to it.

This information will be kept in custody during the validity of the legal entity.

And then for 5 years after its dissolution in the Public Registry of Panama.

Penalties for non-compliance |Company registration in Panama

If the required information is not provided to the Superintendency.

The Superintendency may order that the Public Registry of Panama (the “RP”) suspend the legal entity.

A legal entity will dissolve in the RP after 2 years of not submitting the UBO information.

If the resident agent is unable to update UBO information due to UBO’s refusal to provide it.

The resident agent must resign as a resident agent of the legal entity.

Chapter IV Law 129 establishes a series of sanctions that apply to both the resident agent.

The legal person and the officials assigned are in breach of the provisions of this rule.

In this sense, pecuniary penalties of:

B / .1,000.00 to B / .5,000.00 are included for resident agents. 

Who does not carry out the corresponding registrations and updates?

This sanction applies to each legal person and may be progressive until the breach is remedied.

Terms of Implementation | Company registration in Panama

Panama recently approved an extension of the Fiscal Amnesty period.

The original regulation was adopted through Law 99 2019. 

Established an amnesty on interests and penalties in relation to pending annual taxes for companies and foundations and was due to expire on February 29, 2020.

It is now extended for four months until June 30, 2020.

Under the terms of the extension, interest and penalties in relation to the outstanding annual taxes are discounted by 85%.

This is very useful if you want your companies and foundations back in order at a very low cost.

If the data of the final beneficiary cannot be entered, the Resident Agent must submit his resignation to the Public Registry of Panama.

Or he could be subject to the previously indicated administrative sanctions.

Company registration in Panama benefits

Offers a multitude of benefits for businesses looking to establish a presence in Central America.

Some of the main advantages are:

1. Tax laws that are favorable to businesses: Panama boasts low corporate and personal income tax rates, making it an attractive location for companies that are looking to reduce their overall tax burden.

2. Panama’s Well developed financial sector and infrastructure: This country has an economy based on a strong financial sector, also with an infrastructure that gives easy access to the best shipping routes, airports, and ports.

3. Political and economic stability: Panama has a long history of peaceful democratic political transitions and has avoided the economic turmoil experienced by many other countries in LATAM, providing a reliable business environment.

4. Confidentiality: The Panamanian government does not publicly disclose the names of shareholders or directors of companies registered in the country, giving a high degree of privacy and security for business owners.

5. Strategic location: Panama is located in Central America making it a strategic hub for businesses looking to access the Latin American market.

6. Strong legal system: Panama has a legal system that ensures the protection of property rights and contracts, which gives a secure environment for making business.

7. Panama is Multilingual: This country has a diverse population, where many people speak fluent English and Spanish, so this makes it easy for businesses to communicate with employees and clients.

8. Supportive government: The Panamanian government gives an environment and laws that give foreign investment well secure and various incentives for companies that invest in the country.

9. Offshore banking and financial services: In Panama businesses are provided with access to a wide range of financial products and services like offshore banking.

10. Special Economic Zones: Several Special Economic Zones exist in the country that offer businesses tax exemptions, reduced red tape, and other incentives.

11. Opportunities in a wide range of industries: businesses have a wide range of industries, including logistics, tourism, real estate, and many others for investment in the country.

12. Experience: Panama has a long history of welcoming foreign investment and many multinational companies have established a presence, providing a valuable network of resources and support for new businesses.

Company registration in Panama

Overall, company registration in Panama offers a combination of favorable tax laws, a well-developed financial sector, political and economic stability, confidentiality, and other benefits that make it an ideal location for businesses looking to establish a presence in the region.