While bearer shares are not new to the world, they are under scrutiny by the OECD that wants more  transparency in financial operations and has conditioned this as part of taking Panama off the grey list.  This has caused a lot of concern as most people do not want anyone to know what they own.  This has become even more contentious here in Panama after the leak of information about offshore money laundering around the world including Panama.  President Martinelli  has now pulled the pending legislation requiring registration of bearer share.  The banks and insurance companies are not backing down and you will find it difficult to have a bank account or obtain an insurance policy with out full disclosure and in some cases a change from bearer share corporations to provide for only nominative shares where your name is on the share and your company specifies that it cannot issues bearer shares in a public affidavit.

First, here is a defintion of bearer shares.

In the world of stocks, bonds, and shares, there is a type of financial instrument that is referred to as a bearer share. Essentially, a bearer share is understood to be a stock certificate that is payable to the person who is actually in possession of the share at the time that the share is put up for sale. The bearer share may be in the possession of the person or entity who originally purchased the share, or it could be someone who acquired the bearer share through such means as a sale, inheritance or as payment on a debt. Here is some background on how a bearer share functions, and what this means to the individual or entity that is in possession of one or more bearer shares.

Many companies issue a limited number of stock certificates that do not include the name of the purchasing party. When this sort of transaction occurs, there is no record of ownership registered by the seller or the corporation that originally issued the stock in the first place. This creates a situation where it is assumed that the individual who actually has the physical shares in his or her possession is the legal and rightful owner. Proving otherwise can be an extremely difficult process.

Now hot off the press at La Prensa:

President Martinelli’s administration has changed its position and halted the Bill on bearer shares.

This topic has been critical in heated debates regarding its usefulness, and which up until now had been advocated by the Minister of Economy and Finance, Frank De Lima.

According to an artcile in Prensa.com, “With less than two months to go before the key date for approving the bill which seeks to immobilize bearer shares, the administration of Ricardo Martinelli, who defended the move, has made a u turn and decided to suspend the debate in the National Assembly. ”

“… In 2011 the OECD removed Panama from the list of “tax havens”, but the agency must assess whether the Panamanian laws effectively allow the exchange of financial information. ”

“… Sources have indicated that the u turn is a result of pressures of heavy lobbying by a group of jurists and lawyers led by Eduardo Morgan, Jr., who have opposed the proposal, arguing that it affects national integrity . ”

Source: Prensa.com