Panama introduces a Beneficial Owner Register and extends the Tax Amnesty

Law No. 129, which deals with the establishment and regulation of a beneficial owner register, was approved in Panama on 17 March 2020 and became law on 20 March 2020.

In summary, the new Law requires a resident agent to file certain information in relation to the ultimate beneficial owner (the “UBO”) at the Superintendence of Non-Financial Institutions (the “Superintendence”) on all Panama legal entities (such as companies and foundations) for whom it acts as the resident agent.

As is internationally understood, a UBO is regarded as the natural person or persons who directly or indirectly own or control a legal entity.

What shall be reported?

The following information is reportable in relation to the UBO:

a)     Full name;
b)     ID numbers, such as a passport or any other personal identification number;
c)     Date of birth;
d)     Nationality;
e)     Address; and
f)     The date on which the natural person became a UBO of the legal entity.

When shall reporting be made?

For new legal entities, the resident agent should register the UBO information within 30 days of incorporation. For existing legal entities, the resident agent shall have 6 months.

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

Shall the information be publicly available?

No, the Law provides that the information filed by the resident agent will not be made public and can only be accessed by the resident agent of the legal entity and two designated persons of the Superintendence. Should anyone gain unauthorized access to the register then they can be fined $200,000.

What are the sanctions for non-compliance?

Should the required information not be provided to the Superintendence then, the Superintendence may order the Panamanian Public Registry (the “PR”) to suspend the legal entity. A legal entity will be dissolved at the PR after 2 years of failing to file the UBO information.

Should the resident agent be unable to update the UBO information due to refusal of the UBO to provide it then, the resident agent should resign as resident agent of the legal entity.

Panama extends the Tax Amnesty period

Panama recently approved an extension to the Tax Amnesty period.  The original regulation adopted through Law 99 2019, provided an amnesty on interest and penalties in relation to outstanding annual taxes for companies and foundations and was due to expire on the 29 February 2020. This is now extended for four months until 30 June 2020. Under the terms of the extension, interest and penalties in relation to outstanding annual taxes are discounted by 85%.

This is very helpful if you wish to get your companies and foundations back in good standing at a much-reduced cost.

Should you have any queries in relation to the new Beneficial Owner Register and the Tax Amnesty extension then please do not hesitate to contact Lidia Ramos or Alvaro Almengor.