PANAMA Law and Practice Contributed by: Rafael Rivera, Javier José Vallarino, Juan Vallarino, Karen Y. Tejeira and Carolina Lino, BDO Legal Panama
tain activities are exempt, such as liberal professions. A Commercial Licence is only mandatory for those companies that will operate within or from Panama - nian territory. Municipal Registration All operative companies must register with the Munici - pality where they are domiciled. Companies will pay the municipality annual taxes for the activities ren - dered, as well as taxes for publicity purposes. After complying with this process, a company could be registered in Panama in four to seven business days. 3.3 Ongoing Reporting and Disclosure Obligations Panamanian companies are legally required to report any changes to their corporate structure ‒ such as modifications to share capital, corporate purpose, registered address, board of directors, or legal rep - resentation ‒ by formalising such changes through a public deed and registering them with the Public Registry of Panama. Entities operating in regulated sectors (eg, banking, securities) must disclose financial and shareholder information in accordance with sector-specific laws. In contrast, companies in non-regulated sectors (eg, real estate) are only required to disclose such infor - mation upon request by a competent authority during formal investigations. Regarding beneficial ownership, Limited Liability Companies disclose their partners by default. Cor - porations, while benefiting from shareholder anonym - ity, must still report their ultimate beneficial owners through their resident agent to the Beneficial Owner - ship Registry, managed by the Superintendency of Non-Financial Entities, pursuant to Law No 23 of 2015 and Law No 129 of 2020. This Registry is confidential and accessible only to competent authorities under specific legal circum - stances, such as investigations related to money laun - dering or terrorism financing. Failure to comply with the disclosure of the beneficial owner, whether during the incorporation procedure or after any subsequent
modifications, can lead to penalties as well as the res - ignation of the registered agent. 3.4 Management Structures Corporate Governance in Panamanian Entities In Panama, Corporations are governed by two main bodies: the Shareholders’ Meeting, which is the supreme authority, and the Board of Directors. Both bodies are required to issue prior notices for meetings, although such notice may be waived before or after issuance. These bodies typically operate indepen - dently, with the Shareholders’ Meeting issuing direc - tives or delegating authority to the Board. Each shareholder is entitled to one vote per share, whether the shares are registered with or without par value, or bearer shares ‒ provided the bearer presents the share certificate or complies with the bylaws. The Board of Directors, composed of at least three individuals, is responsible for the management and administration of the company. It appoints officers (President, Secretary, Treasurer, etc) and may amend the bylaws unless otherwise restricted. Corporations also designate a Legal Representative, who holds judicial and extrajudicial authority to rep - resent the company before third parties. In Limited Liability Companies, the supreme body is the Partners’ Assembly, which may adopt resolutions in writing, whether the partners are present or not. This body directs the company, appoints or removes managers, and may amend the bylaws. The Manager, who may be one or more individuals appointed by the partners, is responsible for the com - pany’s administration, convening partner meetings, and maintaining the partners’ registry and corporate minutes. 3.5 Directors’, Officers’ and Shareholders’ Liability Under Panamanian law, directors are subject to lim - ited liability but remain personally and jointly respon - sible for the diligent and lawful administration of the company. This duty applies both to the company and to third parties and is recognised in the legal frame -
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