PANAMA Law and Practice Contributed by: María de Lourdes Marengo and Joaquín De Obarrio, Patton Moreno & Asvat
2.2.3 Parts Installed or Replaced After a Lease’s Execution A lease may include parts that are installed or replaced on an aircraft or engine installed after its execution. It is advisable to execute a lease amendment or side letter to capture parts installed after execution. 2.2.4 Risk of Title Annexation Ownership of engines that are delivered with the air - craft is assumed to be vested in the aircraft owner. If engines are owned by a third party, a statement to that effect must be expressly contained in title documents. There is no register of engines at the Public Registry. Title to engines may be registered at the Mortgage on Movable Assets Section of the Public Registry Office when a mortgage on the engines is recorded therein. 2.2.5 Recognition of the Concepts of Trust/Trustee Trusts and the role of an owner trustee under a lease are fully recognised under Panamanian law. 2.3 Lease Registration 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register The interest of the owner and/or lessor of an aircraft must be registered at the Public Registry Office and at the AAC. Registration of the bill of sale at the Public Registry Office vests title upon the owner. 2.3.2 Registration If the Owner Is Different From the Operator Title in the name of the owner must be registered with the Public Registry Office. It is not possible to register title in the name of the operator when the operator is not the owner. The operator must obtain from the AAC a certificate of registration which will show that title is registered in the name of the owner and that lessee is the operator. 2.3.3 Aircraft/Engine-Specific Registers Leases on aircraft are registered at the Aircraft Section of the Movable Assets Section of the Public Registry Office and are filed with the Aeronautical Registry of the AAC.
or an asset situated in Panama may be validly sub- jected to foreign law. If the lease is executed outside Panama, the signatures of the parties must be certi - fied by a notary public and legalised according to the 1961 Hague Convention on the Apostille. Thereafter the lease must be translated into Spanish by an official translator in Panama, protocolised in a notarial deed and registered with the Public Registry Office. 2.1.3 Restrictions Concerning Payments in US Dollars The US dollar is legal tender in Panama. There are no restrictions imposed on domestic lessees making rent payments to foreign lessors in US dollars. 2.1.4 Exchange Controls There are no exchange controls in Panama. 2.1.5 Taxes/Duties Payable for Physical Execution of a Lease The execution of a lease in Panama by a domestic party or an original lease executed outside Panama being brought into Panama, either physically or elec - tronically, is subject to payment of stamp duties in the amount of USD0.10 for each USD100.00 of the value of the lease. However, where such amount has been paid in respect of notarial paper for the deed whereby the aircraft lease has been recorded with the Public Registry, no additional amounts are required to be paid. 2.1.6 Licensing/Qualification of Lessors Lessors do not have to be licensed or otherwise quali - fied in Panama to do business with a domestic lessee. 2.2 Lease Terms 2.2.1 Mandatory Terms for Leases Governed by English or New York Law The lease must include the name and particulars of the parties, the description of the aircraft, the duration of the lease and the rent payable. There are no other mandatory terms required to be in a lease. 2.2.2 Tax and Withholding Gross-Up Provisions Tax and other withholding gross-up provisions are legal, valid and binding and enforceable against the lessee. The lessor remains liable before tax authori - ties if the lessee fails to pay taxes imposed on lessor.
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