Regulations for the Registry of Final Beneficiaries for Panama Legal Entities

The Private and Centralized Registry System for Final Beneficiaries of Legal Entities was created by means of the Law 129 of 2020 and has recently been regulated by the Executive Decree Number 13 of 25^th March 2022.

Pursuant to Law 129 and Executive Decree 13, all resident agents of Panama legal entities must subscribe to the Final Beneficiary Registry and provide certain information on the final beneficiaries represented by each resident agent.

The information stored will not be accessible to the public and will only be available the Regulator of Non-Financial Agents.

Disclosure of such information will only be available to investigations related to money laundering, financing of terrorism, financing the proliferation of weapons of mass destruction and the compliance with international cooperation treaties signed by the Republic of Panama.

Executive Decree N°13 requires that all resident agents representing Panama legal entities must first register in the Centralized Registry System for Final Beneficiaries. Upon the activation of the system only those attorneys and law offices duly registered will be able to provide the representation services related to a registered agent and must comply with the requirements established by Law and applicable regulations to act as such.

The Registration of Final Beneficiaries must be performed exclusively by the resident agent of the legal entity.

Information required to register a legal entity are:

1. Principal address where the legal entity administrative activities are performed, taking in consideration the jurisdiction where most economical activities are performed or where all corporate decisions are taken.
2. Tax identification number; this can be primarily the Republic of Panama´s tax registration number or any other jurisdiction where the entity is fiscally registered, if there are more than one all must be declared.

The Final Beneficiary information to be provided to the Registry is the following:

       1-Complete name of the person

       2-Passport number or ID

       3-Date of Birth

       4-Nationality

       5-Adress of principal place of residence

       6-Date from which the beneficiary appears to be the principal beneficiary on company records

For those cases where the Final Beneficiary is another legal entity the beneficiary will be:

1. The person holding 25% of the said legal entity. Except for publicly listed companies, or being owned by a public international organization, multilateral or owned by a State.
2. The person that controls the legal entity by other means.
3. In the event any of the previous two criteria are no applicable then the whoever exercise the administrative control, or the effective control of the entity will be considered the final beneficiary.
4. For Private Interest Foundations the final beneficiary will be considered the person that receives financial income from the entity, or the person that effectively exercises the control of the foundation.
5. If the entity is part of a structure that includes a trust, the identity of the trustor, trustee, protector, beneficiaries or any other person exercising the administrative control must be identified.
6. In the event a company is the process of liquidation, bankruptcy or insolvency proceedings the person that is appointed as administrator will be required to be identified.
7. In the event of decease of the final beneficiary of an entity whoever represents the administration of the estate must be identified.
8. Any other possible event not considered in these regulations will require the identification of the person exercising control over the entity.

The noncompliance of these requirements will carry out the suspension of the legal entity in the Republic of Panama.

Pardini & Asociados

jjes@padela.com