PANAMA Law and Practice Contributed by: Rafael Rivera, Malvis Mina, Nicole Pérez and Carolina Lino, BDO Panama
Due Diligence (KYC) In accordance with Law No 23 of 2015 and its modifications, it is mandatory to conduct KYC procedures to verify client identity and ensure compliance with anti-money laundering and counter-terrorism financing regulations, prior to After completing the KYC with positive results, the articles of incorporation must be formalised before a Notary Public and registered with the Public Registry of Panama, along with payment of the franchise tax and registration fees. The process typically takes two to three business days. Tax Registration Once the company is registered in the Public Registry of Panama, a Tax Identification Number (RUC) must be obtained from the Tax Authority (DGI). This obligation must be complied with by all entities governed by Panamanian law, regard - less of whether the entity conducts operations in the country. Commercial Licence the incorporation of the entity. Notarisation and Registration To operate commercially, a Notice of Operation or Commercial Licence must be obtained, depend - ing on the business activity, in accordance with the International Standard Industrial Classifica - tion (ISIC). Certain activities are exempt, such as liberal professions. A Commercial Licence is only mandatory for those companies that will operate within or from Panamanian territory. Municipal Registration All operative companies must register with the Municipality where they are domiciled. Compa - nies will pay the municipality annual taxes for the activities rendered, 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 representation – 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 information upon request by a competent authority during formal investigations. Regarding beneficial ownership, Limited Liabil - ity Companies disclose their partners by default. Corporations, while benefiting from shareholder anonymity, must still report their ultimate benefi - cial owners through their resident agent to the Beneficial Ownership Registry, managed by the Superintendency of Non-Financial Entities, pur - suant 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 cir - cumstances, such as investigations related to money laundering or terrorism financing. Failure to comply with the disclosure of the beneficial owner, whether during the incorporation proce - dure or after any subsequent modifications, can lead to penalties as well as the resignation of the registered agent.
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