Changes to the bearer share regime in Panama

By Alfaro, Ferrer & Ramírez

Panama recently enacted law 47 from 2013, adopting measures to immobilize bearer share certificates issued by existing companies and those companies incorporated in the future.

The law will come into effect on August 7, 2015. After this date, a company that issues bearer share certificates will have to deliver them to an authorized custodian appointed by the shareholder, no later than 20 days after the issuance.

Owners of bearer share certificates issued prior to August 7, 2015 will have 3 years (starting on the aforementioned date) to:

- Replace their bearer share certificates with new registered share certificates in the name of an individual or corporate entity; or
- Deliver their bearer share certificates to an authorized custodian, and provide a sworn statement with sufficient information to fully identify the owner of the corresponding share certificates.

Authorized custodians may be general license banks, trust companies, securities brokers, lawyers and law firms established and regulated in Panama. We are in a spotition to provide authorized custodian services through our firm, Alfaro, Ferrer & Ramírez, or our trust company, AFRA Trust Corporation.

After complying with certain requirements, the law also permits the appointment of foreign authorized custodians, who may be banks, trust companies and financial intermediaries with license to operate in jurisdictions belonging to the Financial Action Task Force (FATF) or associate members.

The owners of bearer share certificates that on August 7, 2018 have not converted them into registered shares or delivered them to an authorized custodian, will not be able to exercise their economic and political rights attached to the shares. All bearer share certificates issued after August 7, 2015 will have to be delivered to an authorized custodian appointed by the owner, within 20 days after their issuance.

The transfer of bearer share certificates will be completed when the authorized custodian is formally notified in writting of the transfer by the owner of the shares, and the transferee delivers the sworn statement identifying him.

The new law does not require the filing of the names and information about the owners of bearer or registered shares before any public registry or institution. Neither does it imply an increase in annual government or registration fees before the Panamanian authorities.

If you would like to receive more information, or further discuss any of the matters herein mentioned, do not hesitate to contact us.

Note: This information has been prepared with the purpose of providing general information and it does not intend to advise any person or institution. It is recommended to obtain professional advice before making any decision or developing any project in connection with the matters addressed in this publication. To obtain more information please do not hesitate to contact Carlos Ucar ucar@afra.com