Law 47 Passed: Panama Corporation Bearer Shares to be Restricted




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On August 6, 2013, the National Assembly of Panama passed Law 47, which once it goes into effect two years from now, will require that everyone in possession of Panama corporation bearer shares to designate an authorized custodian to take possession of the bearer shares. An authorized custodian could be a licensed bank, a Panama attorney (or law firm), Panama fiduciaries, or brokerage houses regulated by the Superintendence of the Panama Securities Market.

Bearer shares are corporate stock certificates that do not have anyone’s name, but only “bearer”, which means whoever is in possession of the bearer certificate is the owner. This effectively allows for anonymous ownership of a corporation. Similar to government or corporate “bearer” bonds, only the name “bearer” appears on the bond allowing the first owner to pass it onto to anyone who holds it as the new owner.

Law 47 takes effect on August 6, 2015, and from that date on, every holder of a bearer share certificate will have three years to submit the bearer shares to an authorized custodian, along with a sworn declaration providing basic identity information about the true owner and the corporation which issued the shares, as well as its resident agent.

After Law 47 comes into effect, every corporation issuing bearer shares must submit the bearer shares certificates to the authorized custodian within 20 days from the date of issuance, along with the corresponding sworn declaration.

The authorized custodian must provide the sworn declaration to competent authorities who request it while investigating acts related to money laundering, financing of terrorist activities, or other illegal activities in accordance with the laws of the Republic of Panama, or otherwise, to comply with the agreements and international double taxation treaties signed by the Republic of Panama.

Lastly, the new law requires that the Supreme Court keep a registry of the lawyers and law firms that serve as authorized custodians and authorizes the court to apply sanctions for noncompliance with their obligations as custodians under this law.

Please note that this law does not obligate Panama offshore corporations to register the names of the shareholders at the Public Registry. Only the corporation’s officers, directors, and registered agent’s names are registered at the Public Registry.

While the global tendency of other tax haven jurisdictions is to completely eliminate bearer shares resulting from pressures from the OECD (Organization for Economic Cooperation and Development), Panama has creatively found a solution to protecting privacy while creating mechanisms to control illegal activities by immobilizing bearer shares instead of eliminating them.

About Manoj Chatlani


Manoj Chatlani is a Senior Partner at POLS Attorneys, a full-service law firm in Panama City, Panama. Specializing in offshore services, including asset protection, estate planning, offshore banking, and offshore corporations, as well as Panama immigration and real estate transactions, Panama Offshore Legal Services offers clients a streamlined solution to all their Panama legal needs. Manoj is a Panamanian lawyer and holds a law degree from USMA and earned a Masters in Communication Law and Panama Tax law.

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