The shift towards disclosure of real owners of companies worldwide continues with Panama to join in the ranks.
On 19 December 2019, the National Assembly of Panama passed a new Law (Bill No.169) about the creation of a register of beneficial owners of all Panama-incorporated legal entities.
The register will be managed by the Superintendence of Non-Financial Institutions and will be private, with access limited to: (1) resident agents, (2) registered legal entities, and (3) two designated officers with the required security and technological protections. Those with access to the beneficial owner register will be required to keep that information confidential with a breach of such obligation resulting in a fine of US$200,000.
In Panama, all legal entities must appoint a Panamanian lawyer or law firm as their resident agent. Presently, the resident agents are only required to perform due-diligence on their client entities’ beneficial owners internally without registering in anywhere.
The new Law requires resident agents to register with the Superintendence and submit the required information about beneficial owner within 30 business days of the particular company being incorporated or of being appointed as its agent. Resident agents of existing companies have six months to comply with the new law.
The resident agents will get fines from US$1,000 to US$5,000 for each legal entity whose information is not registered or updated in the beneficial owner register. Moreover, for each day of such non-registration or non-update, the extra fine will be imposed on 10% of the fine previously imposed, up to a maximum of six months. The additional sanctions will be imposed for false information provided or filed in the register.
A legal entity whose resident agent has not registered with the Superintendence will be suspended from the Panamanian Public Registry (e.g. not able to file any document when required, nor to obtain a good-standing certificate from the Registry) and will be removed after failing to file for two years.