This post is an update to the new legislation that is in process here in Panama.

I asked my attorney to review the draft of the new law that is being reviewed and here are the salient points:

The validity of bearer shares shall be judged by their registry, ie. you will need to have your bearer shares registered with an agency

specially licensed for this purpose.

The agent will only make an annotation of the ownership of the bearer shares and the owner will keep the bearer shares certificate.

The files of this agency will be private but authorities like the Tax Office, the Courts, the DA’s will all have access to these files.  Sorry folks, not more selling property and avoiding transfer taxes by selling your shares, those days are officially over.

The caveat will be that they will only be allowed access when investigating someone, NO fishing expeditions will be allowed.

The obvious consequence will be that confidentiality of the ownership of bearer shares will be affected.

There is a deadline in 2016 to register the bearer shares of all corporations formed before that date in which the new law will come

into effect.

The bearer shares of corporations formed after this date will have to be registered immediately  after its issuance.

OK, that’s the good news, you get to keep your shares but you have been exposed.  Now the Bad News!!

I met with a private banker at my bank this week and I was told, we do not care what the government does, if you have a corporation that has an account at our bank, your bearer shares will have to be immobilized at our Bank, meaning, register them, turn them in, we can tell anyone we want that you own them and thank you very much, that will be $400 per year in additional fees you must pay.  Failure to do so will result in a letter that basically says, thank you for being such a good customer but your account has been closed and a check made out to you is in the branch office, come pick it up. This all stems from the IRS, the OECD and everyone else out there that wants to find a way to raise money for their coffers by fining the banks, like HSBC who just paid the US government $1.9 billion for a money laundering offense.

The solution:  Transfer your shares from bearer shares to nominee shares and there will be no problems or issues.

For more information on this matter, or any other legal assistance that you may require in Panama, contact me and I will put you in

touch with one of the best lawyers here in Panama.

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