Monday, December 16, 2013

Whatever happened to and

We keep receiving queries from people who purchased companies through and Panama Legal.  Those are generic names for websites with great SEO reach.

Each Panama corporation is required to have a resident agent.   Under Panama law:
- The Resident Agent must be a Panama lawyer accredited in or law firm,
- The law firm must have the name of its partners under the Code of Ethics.

Generic names like Panama law or similar should raise red flags with a prospective buyer of Panama corporations.   If these resident agents have no permanent office, this can be a problem for the shareholder of the company when KYC is needed from the nominee directors when opening bank accounts.   Bank constantly are required to update information they have on corporate shareholders, so a general power of attorney may not be sufficient to comply with bank requirements.

With the trail stops with its dissolution.   Previously it listed several cellphone numbers and a toll free Panama number.   No lawyers or names are described in its archived website but the Public Registry shows 2 lawyers as its members.  Their Panama office at OBP is now occupied by a building company.

Fecha Registro:

Nombre de la Sociedad
Título del DignatarioNombre del Dignatario

As nominees they usually list for their corporations, other corporations.  See also
Título del DignatarioNombre del Dignatario
SECRETARIOSECRETARIAL OFFSHORE SERVICES, S.A. does not list any lawyers in its archived website.  It has been linked to a civil partnership called Panama Legal.

Fecha Registro:

Nombre de la Sociedad

The lawyer members are in Torre Delta, the old Bankboston building in Via Espana:

Título del DignatarioNombre del Dignatario

See also

Monday, December 02, 2013

Panama: Aviation growth soaring

Panama: Aviation growth soaring
Latin America | 31 Jul 2013

The government of Panama has made the development of its transportation and logistics sector a top priority, having identified it as one of our pillars of economic growth, along with tourism, finance and agriculture.

With this goal in mind, a number of transport infrastructure projects have been undertaken, including the expansion of the Panama Canal and the construction of a new metro in Panama City. Emphasis has been placed on the development of the aviation sector, with investments planned for new and existing airports, and continued expansion of the flagship carrier, COPA Airlines, is under way.

In line with Panama’s growing economy and status as an increasingly important connector between North and South America, passenger flows through Tocumen International Airport, the main port of entry, have increased rapidly in recent years. According to data from the Georgia Tech Logistics Institute in Panama City, the number of travellers handled by Tocumen doubled between 2005 and 2011, growing from 2.76m to 5.84m. This figure rose by nearly 20% in 2012, to reach 6.96m.

Expansion plans for Tocumen were announced at the end of 2012 and represent a significant step forward for the aviation industry. The $650m project will include the construction of a third runway, as well as a new South Terminal, which is expected to add 20 gates and double passenger capacity. This would follow on the opening of 12 new gates at the North Terminal earlier this year.

A large part of Tocumen’s increasing importance for regional transport is due to Panama’s COPA Airlines. COPA, which operates its hub-and-spoke system out of Tocumen, is responsible for more than 80% of the airport's daily operations, according to the airline. It is also considered one of the fastest-growing carriers in the region and over the next five years will be adding as many as 44 new Boeing 737-800s to its existing fleet of 83 aircraft. The fleet currently comprises 26 Ebraer 190s, 18 Boeing 737-300s and 39 Boeing 737-800s.

On the Pacific side of the country, construction of a new terminal at the Enrique Jimenez Airport in Colón is expected to be completed in July, with its total cost coming to $58.35m, according to information from the Civil Aviation Authority. The airport is already an important asset for the Colón Free Zone, a centre of business and logistics.

The new Scarlet Martinez Airport, meanwhile, is set to open just two months later, in September. Construction of the facility, which is located in the central provinces of Rio Hato and Cocle, is expected to cost more than $50m. The airport will primarily serve tourists looking to take advantage of Panama’s beach and environmental attractions.

By investing in airport infrastructure, Panama is well-positioned to capitalise on expected long-term air travel growth in the Americas. According to projections from Boeing, intra-Latin America air traffic is expected to rise on average by 6.5% per year between 2011 and 2031, while this figure stands at 5.1% for travel between North and Latin America.

Other local factors – including a rapidly expanding economy, a growing tourism sector and an increasingly important position in regional trade and finance – are expected to further drive demand for transportation services and support the government’s bid to make Panama a major air traffic hub within the Americas.

For full text see http://www.oxfordbus
More information is available in

Friday, November 01, 2013

Panama: Reforming the education system

Panama: Reforming the education system
Latin America | 12 Jul 2013

Recent economic growth in Panama has been driven by public spending on large-scale infrastructure projects, but sustaining this expansion will likely prove difficult without improvements to the education system. While some reforms have been implemented in recent years, these initiatives have drawn criticism from teachers.

The World Economic Forum’s 2012-13 Global Competitiveness Report (GCR) ranks Panama 112th out of 144 countries surveyed in terms of the quality of the education system. This is far behind neighbouring Costa Rica (which ranked 26th) but is above other Latin American nations such as Nicaragua (121st) and Honduras (135th). Other key GCR rankings include the quality of primary education, on which Panama placed 115th, and the quality of mathematics and science education (125th). Of the reported challenges for conducting business in the country, the inadequately educated workforce was the third-greatest concern.

Overall, these results appear to be a slight decline from Panama’s standing in the 2009-10 GCR, when the country ranked 111th in terms of quality of the education system, 109th in primary education and 113th in mathematics and science education. However, this apparent drop was largely the result of additional countries being included in the survey, with Panama’s score on both quality of the education system and quality of primary education improving slightly over the period, from 2.9 (out of 7.0) to 3.0 and 2.8 to 2.9, respectively.

These gains may well have come as a result of reforms that began in 2010, with the restructuring of primary, middle and secondary school curricula. As of the end of 2012, the Ministry of Education (MEDUCA) reported that some 62.4% of middle schools had already completed the transformation. On top of a complete overhaul of the curriculum, the public school system is adopting a four-semester school year. The ministry has created the National Team for Curricular Innovation and Modernisation, formed by some of the system’s top teachers and professionals, to monitor and revise public school curricula on a more regular basis.

Changes continued in 2011, with the government setting up the National Teacher Training Programme (ENCAD) to improve teaching standards, particularly with regard to the use of technology in education. MEDUCA reported having successfully completed its first iteration of ENCAD training for 100% of teachers in 2012.

The signing of Executive Decree 920 in October 2012 has proved more controversial. Among other goals, the law aims to implement a more rigorous system for hiring and evaluating public school administrators and teachers. This has drawn strong criticism from teachers unions over the past six months, with some educators threatening strikes. The reaction was not unlike what transpired in Mexico in early 2013, which has passed similar legislation.

Despite weaknesses in the education system, Panama holds several advantages over some of its regional competitors when it comes to transforming itself into a knowledge-based economy. The country has a strong information and communications technology infrastructure plus a relatively high level of technological adoption. These factors helped Panama earn a ranking of 65 out of 145 countries in the World Bank’s 2012 Knowledge Economy Index.

Government budget expenditures on education also increased significantly in 2012, a trend that is expected to continue from 2013 to 2016, according to the Ministry of Economy and Finance (MEF). After spending $121.2m in 2010 and $122.3m in 2011, MEF figures show MEDUCA’s budget then nearly doubled in 2012, reaching $213.9m, while projections indicate budget allocations to MEDUCA should average $208.9m from 2013 to 2016.

While more funding does not always result in improvements, combined with the various reforms implemented throughout the past three years, the education system may just be able to turn a corner. This will help reduce reliance on outsourcing business and importing skilled labour, thus creating a more competitive and sustainable economy in the longer term.

For full text see http://www.oxfordbus
More information is available in

Monday, October 14, 2013

4th Real Estate Forum to be held on Panama City Urban Zoning

At least once each year the AMCHAM Panama Real Estate Committee holds its Forum which addresses timely issues within the sector and offers information and solutions to attendees

The Real Estate Committee of the American Chamber of Commerce and Industry of Panama is pleased to announce the Fourth Annual Real Estate Forum to be held on October 16, 2013 from 11:30 am – 3:00 pm at the Miramar Inter-Continental Hotel.  The forum “Urban Zoning:  The Metro and the Streets.  Where do I park?”  will focus on urban planning in Panama City and how the new Metro and road infrastructure projects affect real estate in Panama City.  The speakers include  Henry Kardonski, General Manager , London and Regional Panama; Juan Manuel Vasquez, Director of Municipal Works and Construction , Panama City Mayor's Office ; Roberto Roy, Executive Secretary, Panama Metro Authority; and Jaime Ford, Minister of Public Works of the Republic of Panama.

Pamela Oakes, Chair of the AMCHAM Panama Real Estate Committee and event planner, said “we are very pleased to bring together these speakers whose projects affect our daily lives and will have a profound effect on real estate.  Panama is undertaking  major infrastructure projects such as building the country’s first metro  system and redesigning the city’s  roads and highways.  Proper planning is required to ensure that upon their conclusion the traffic  in Panama City improves and commuters will have better options.”

AMCHAM Panama’s Real Estate Committee has created and adopted an industry Code of Ethics to which all member real estate service providers must adhere in order to be part of an exclusive referral network. The Committee has become a good source of business for real estate service providers who have sworn to abide by AMCHAM’s Real Estate Committee’s Code of Ethics.

One of the Committee’s primary goals is to disseminate accurate information to the public about the Real Estate industry, so that investors may meet the challenges and avoid many of the problems involved in purchasing real estate and relocating to Panama.  At least once each year the Committee holds its Real Estate Forum with the valuable support of corporate sponsors, which addresses timely issues within the sector and offers information and solutions to attendees.

About The American Chamber of Commerce & Industry of Panama (AmCham Panama)

Founded in 1979, AMCHAM Panama is a non-profit, non-political, independent, voluntary association supported primarily by its members. Much of the organization's work is accomplished through the efforts of volunteer member committees which collaborate to help AMCHAM promote free enterprise in Panama. AmCham Panama has over 450 active members, from small local companies to major multinational companies based in the United States.

For additional information contact Maria Florencia Suarez +507 301-3881, email realestate or go to

Monday, September 16, 2013

Real world list of Pensionado Visa requirements

Applying for a Pensionado Visa on behalf of a retiree receiving income above US$1000 monthly from Social Security involves filing the following:

1) Power of attorney and request by the attorney.  Power of attorney must include the information about the applicant (exact address, telephone number...) and full name of parents and nationality.  All the information about the attorney must be specified (Office address, telephone and fax number), complete information of cheques that are provided (number of checks, name of bank, date and amount) of all documents enclosed and the legal basis.  We cannot draft the Power of Attorney without the information requested in that form
2) Police record from the country of origin (only when the applicant has less than two years of continuous residence in Panama) of the applicant (for US citizens, only FBI Criminal History is admitted).
3) "Duly authenticated document, which certifies the following:
 -The applicant's condition as retired or pensioner from a foreign government, international organization or private entities.
 -That the applicant receives a monthly pension of no less than US$1000 or its equivalent in foreign currency, plus US$250 for each dependant
 -In the case of persons retired or receiving a pension from private entities, a document from the corresponding authority certifying the existence of said entity must be submitted" and a Panama bank statement showing the deposits made into the account.
4) Sworn statement about Personal Background signed by the applicant .
A) All documents issued abroad, should be submitted duly apostilled or authenticated by the Embassy or Consulate of Panama in the country that issued it and by the Ministry of Foreign Relations of Panama.
B) All documents issued abroad in language besides Spanish, must be translated by a certified interpreter recognized by the Minister of Government.

Once you arrive to Panama, you must provide :
a) Good Health Certificate from a Panama doctor, issued within the three months before the date of the application (must have date, signature and stamp with the name, signature and registered number of the physician)
b) Two (2) sets of photocopies of the entire passport, to authenticate before a Notary Public.
c) Five (5) recent passport-size pictures.
d) Two sets of copies of all documents submitted, except for the passport.

In addition, the following are required:
C) Every foreigner must be duly registered in Immigration Movement Section for which the following must be submitted:
* Two (2) passport-size pictures
* Copy of the page of general information in the passport and that which contains the last seal of entry into the country
* US$1 for registration
* Answer the registration questionnaire.

D) Once the application is filed and your picture has been taken at Immigration offices, your passport will be surrendered 2 business days for a Return Permit to be stamped.   This will allow you to travel outside of Panama and not have to wait in Panama for approval of your Pensionado visa.

When planning your trip, keep in mind it takes 2 weeks to prepare and translate all documents from the time they are received until you can go to Immigration to have your picture taken as part of the application process.

Upon filing of application, a 12-month application card is granted.   Delays of up to 12 months are taking place with the granting of all residence applications, depending on the nationality.

All applications are subject to the regulatory bodies' approval.  While serious law firms are diligent in following regulations in force, government officials may arbitrarily change rules and demand additional documents at any time during the application process.  Therefore, they cannot guarantee the outcome of each application.  Although Law 38 of 2000 forbids public officials from demanding documents outside those listed in a decree published in the Official Gazette, Immigration officials may demand the following items not listed in the Executive Decree related to Immigration:
a) Responsibility letter by applicant when a dependent is involved, authenticated by Notary,
b) Banking letter from a Panama bank where the pension installments are received.
c) Notarized letter by landlord - or notarized copy of public deed of property owned - showing domicile in Panama,
d) Copy of landlord identification, authenticated by Electoral Tribunal,
e) Notarized copy of utility bill showing domicile in Panama.

Based on applications filed as of June, 2013, and subject to changes

Tuesday, September 10, 2013

Juan Hombron and the Lucom estate dispute: Connecting the dots

GPI-HSM Agreement

Local media brings up again the issue of Juan Hombron and the 54 hectares which boundaries partially overlap those of finca 7022 (Cocle) of Hacienda Santa Monica, S.A., (La Estrella) formerly part of the Wilson Charles Lucom estate.  Lucom had signed in 2005 an Agreement (link) for the sale of the company shares to Grand Panama International, Ltd., a company owned by U.S. investors (   Lucom passed away in 2006 without the agreement ever being annulled.

After the claims of Alberto Sudarsky and others over the beachfront of Juan Hombron in 2007 (link), daily La Prensa presented a news report about land claims in the same area awarded by the ANATI land titling authority (headed by former in-house counsel to the company of then Minister of Presidency Demetrio Papadimitriu (The Minister denied involvement).   ANATI awarded several parts of the 7022 beachfront to Trapp Real Estate Corporation and other shell companies in a few months of 2011 what takes other applicants several years, in what became object of a RICO claim in the U.S. against foreign nationals conspiring to the detriment of a U.S. national.  The RICO claim was dismissed by Florida courts in May 2012 (trusts_estates_prof).

The literal bequest in the Lucom will of the Hacienda Santa Monica, S.A., shares to a Nevis trust for sale to benefit the poor children of Panama, was construed by the Supreme Court of Panama Civil Section to mean that the deceased gifted all assets to his "dear wife" Hilda Piza as sole heir to do what she pleased.   With the passing away of Ms Piza, the road was clear for her descendants to arrange a shareholders agreement of October 24, 2012, under which the share ownership of Hacienda Santa Monica, S.A., was reorganized.   According to La Prensa of September 6, 2013, former Minister of Economy Alberto Vallarino acquired shares in the company, after the Lucom probate case (La Prensa).  The new board of Hacienda Santa Monica S.A. also includes board members from the neighboring Buenaventura company, with which a border dispute and several lawsuits for damages had ensued in civil court :
Título del DignatarioNombre del Dignatario

Reports about the future destiny of the Pacific beachfront of the property vary.  Ideas range from a tourist project to take advantage of the new Rio Hato airport, an environmental park (cambiodemocratico507) to a $5m naval station by Nov 2013 ( ).
In the meantime, actions continue in the courts...

See also:
Las Uvas: Fever in the coast
Latin America's First "Branded City" Planned for Panama Gold Coast
Video: Inhabitants of Juan Hombron explain their side of the story
More about the Lucom dispute in Hacienda Santa Monica and Juan Hombron 

Monday, September 02, 2013

Panama: Real estate on solid foundations

Panama: Real estate on solid foundations
Latin America | 7 Aug 2013

The real estate market in Panama is edging towards maturity, buoyed by the booming economy, a major national spend on infrastructure and ample liquidity in the financial system.

Initial estimates from the national statistics agency (Instituto Nacional de Estadística y Censo) suggest the sector expanded by 9% year-on-year in the first quarter of 2013, having notched up average growth of 7.8% in 2012 and 9% in 2011.

Panama City, home to nearly a third of the population, has been the centre of real estate activity over the past decade, with high-end residential, retail and commercial development combining to produce strong growth. New shopping malls and residential complexes have reshaped the skyline, alongside several hotels, evidence of the evolving tourism sector.

The city’s market for office space has been supported by strong macroeconomic growth and new business-friendly legislation, including the setting up of an incentive regime for multinational companies using Panama as a base for regional operations.

Vacancy rates for Class A office projects dropped to 7% from 12% in the second half of 2012, with the average monthly lease rate edging up from $23.30 per sq metre to $24.41, according to a study conducted by CB Richard Ellis (CBRE). New construction of Class A office space eased to pre-2009 levels in the same period, however, suggesting demand could now be levelling off.

CBRE’s study found Panama City’s residential market to be relatively stable. New unit construction eased, in keeping with a rising 76% absorption rate and falling sale prices for Class A real estate. The gross absorption rate across the wider market stood at 77%, with a total of 3346 units reserved from 4330 under construction.

However, there are signs that the retail market in Panama City could be edging towards occupancy saturation. Monthly lease rates fell from $41.31 per sq metre to $40.16 in the second half of last year, while vacancy levels in shopping centres rose from 6.1% to 9.1%. An additional 97,325 sq metres of new retail space was under construction as of late 2012.

Despite its overall impressive growth levels, Panama’s real estate market faces a number of challenges. The country ranked 75 out of 97 nations in the 2012 Global Real Estate Transparency Rankings, behind Mexico (43), Argentina (58) and Costa Rica (70). Jones Lang LaSalle, which publishes the list, described Panama’s transparency level as “low”, adding that a lack of both sophisticated investment vehicles and general market fundamentals were instrumental in determining the country’s position.

Panama also faces a major national housing shortage. The most recent estimates from the Ministry of Housing (Ministerio de Vivienda y Ordenamiento Territorial, MIV), published in 2010, put the shortfall at 136,665 units, against total national supply of 896,050.

The MIV launched a series of social housing programmes in 2010 as part of a target to reduce the shortfall to 30% and increase supply by 4.6%. Once completed, the five-year programme, backed by a $576m investment package, is expected to have benefitted an estimated 344,000 Panamanians. With $268.8m still to be spent, work is expected to accelerate during the second half of 2013 and through 2014.

The real estate sector is expected to continue maturing, with both the private and public sector helping to drive it forward. The government took a small, but significant step forward in May 2012, when it amended its regulations to create a new tax and financial framework covering the purchase and sale of real estate property. The legal changes paved the way for the introduction of key incentives aimed at supporting the housing market, including more favourable interest rates for first-time buyers and tax exemptions for residential home improvements. Ongoing support from the government, together with sustained growth in the private sector, will set the real estate market on course for further expansion in the medium to long term.

For full text see http://www.oxfordbus
More information is available in

Tuesday, August 27, 2013

Permanent Resident Visa for 47 countries of US, EU and OECD

Citizens of 47 countries qualify for the Permanent Residence Visa for university graduates holding $5,000 in a Panama bank account and their dependents.  Applicants must start a new business, purchase an existing business or be hired to work for a Panama company.  The countries until now are:
Andorra, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Israel, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, San Marino, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Serbia, Singapore, Slovakia, Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, United States of America, Uruguay, United Kingdom (Great Britain & Northern Ireland).
A separate work permit is granted by the Labor Ministry which is valid for the duration of the visa.

Thursday, August 08, 2013

Panama: Rise in regional trade brings new opportunities

Panama: Rise in regional trade brings new opportunities

With work to expand the Panama Canal’s capacity taking shape, the economy, especially its growing retail sector, is already benefiting from an increase in the flow of goods. The purchasing power of Panama’s 3.57m consumers continues to increase, mirroring the recent dramatic rise in GDP. However, international retailers’ primary interest is the potential that Panama offers as a logistics and distribution centre for the wider Latin American market.

The construction of the canal gave Panama, which had long served as a bridge between North and South America, the opportunity to carve a niche as a regional trade hub across the globe. The country is also exploring ways of using its strategic position to build growth in new segments, such as the value-added logistics services industry.

Panama’s Colon Free Zone has proved to be a key attraction for retail manufacturers and distributors looking to make the country a regional hub for their operations. The area, which is second in size only to Hong Kong’s international free zone, already acts as an important trans-shipment point for consumer products.

The dollarised economy, stable political environment, and tax and fiscal incentives have all helped Panama attract new international players to its shores. Retail companies make up many of the 100-plus foreign firms that have established regional headquarters in Panama. Consumer electronics, textiles and machinery feature strongly, with the list including global names such as Adidas, Hewlett-Packard, Caterpillar and L’Oréal.

US-based retailers, in particular, have shown a keen interest in establishing or expanding operations in Panama. A recent poll taken by the Retailer Industry Leaders Association (RILA) in America found that 58% of US-based retailers were considering either expanding or establishing operations in Latin America over the next five years. The data also showed that 59% of its retailers had supply chains that included distribution to and from Latin America.

While many international retailers are attracted to Panama because of its strategic location, the US Commercial Service has also pointed to the opportunities that the domestic market offers, despite its diminutive size. In its Doing Business in Panama 2012 report, the service highlighted the consumer attitudes and brand preferences that the two countries shared, together with the positive reputation US manufacturers enjoyed across the region.

Nelson Cabrera, director of Miami-based logistics firm Lilly Associates, recently told the local press that while Panama’s role in shipping goods from the US was pivotal, the country offered several additional attractions for US retailers, such as cheaper freight rates, an open and efficient Customs department and significantly lower wages.

Experts also suggest Panama is well positioned to expand its yet-to-be-developed manufacturing industry to include value-added assembly, packaging and labelling of retail products. A value-added logistics services industry could add between $600m and $1bn, according to estimates from Panama’s Agency for Investment and Export Promotion (Proinvex).

Last August, the first such value-added project within the fashion industry was launched after Panamanian firm Exclusive Brands Logistics Corporation (EBL Corp) signed a partnership with Damco Panama, the logistics arm of the AP Moller-Maersk Group. The collaboration will see a fashion hub created to handle 35,000 cubic metres of goods per year that will also carry out value-added services such as packaging and labelling.

Under the partnership, Damco will focus on transportation and international supply chain management, while EBL Corp will handle value-added logistics. EBL’s managing director, Alfredo Maduro, told the local press that logistical and value-added manufacturing set-ups had the added benefit of enabling managers and clients to concentrate on purchasing and sales.

Panama’s bid to expand its role as a regional hub is opportune in that it coincides with an increase in trade to and from Latin America. International firms headquartered in North America, Europe and Asia will also be aware that a move to establish a logistics and final-assembly base in Panama means shifting the decision-making process closer to their operations, facilitating quicker reactions to changes in the marketplace.

For full text see http://www.oxfordbus
More information is available in

Friday, August 02, 2013

Panama: Developing a financial centre

Panama: Developing a financial centre
Latin America | 26 Jun 2013

Lending in Panama continues to grow at a healthy pace, while important regulatory changes are being carried out to ensure the stability of banks. At the same time, authorities are boosting transparency of the system, increasing their cooperation with the international community and strengthening Panama’s position as a regional financial centre.

Domestic credit within the national banking system grew by 14.2% in 2012, reaching more than $33bn, according to data from the Superintendent of Banks (Superintendencia de Bancos Panamá). The increase was largely on the back of private sector loans, which accounted for 94.2% of credit as of the end of last year. Overall asset levels were up by 10%, hitting $72.94bn.

Panama’s international financial centre – established in 1970 and home to nearly 100 offshore banks – also saw growth in 2012, with assets rising by 10% to reach $89.78bn. While the country still has relatively strong banking secrecy laws, it has started to disclose more financial information through bi-lateral agreements such as the US-Panamanian Tax Information Exchange Agreement (TIEA), which went into effect in April 2011, and the more recent TIEA with Canada signed in March 2013. Panama was removed from the OECD “grey list” in 2011 after signing its 12th TIEA in just under two years.

More generally, the country is taking steps to strengthen the regulatory and oversight frameworks for its financial system, in line with recommendations from the IMF. These include the establishment of a liquidity facility to act as a lender of last resort, as there is no central bank, as well as the ongoing development of capital adequacy and regulatory reporting standards for holding companies in the financial sector and the finalisation and implementation of regulations on operational and interest rate risks.

In its latest Article IV staff report, published in March 2013, the IMF also pointed out that, with high levels of trade and foreign financing, Panama remains vulnerable to external shocks. In particular, sudden fluctuations in capital flows to Latin America or a slowdown in Colombia and/or Venezuela, major trading partners and important sources of foreign deposits, could have an adverse effect on private sector credit growth, although the recent establishment of a sovereign wealth fund will reduce these risks.

Despite these concerns, Panama remains a top regional financial centre, with total assets equivalent to about 215% of GDP. Domestic lending to the private sector amounts to about 90% of GDP, and loans have exceeded deposits since mid-2010. Indicative of its importance, Panama was recently included for the first time in the March 2013 edition of the Global Financial Centres Index, which is published every six months by London-based think tank Z/Yen.

The country’s overall rank of 67 out of 75 of the world’s leading financial centres is indicative of its small size, yet it is not far behind its regional competitors Mexico City (55), Buenos Aires (53), Rio de Janeiro (48) and Sao Paolo (44). With a population of 3.57m, Panama is tiny in comparison to these giants, but its rapidly expanding dollarised economy, political stability and strong network of banks have allowed it to punch well above its weight in the regional and global contexts.

Since Panama first established itself as a centre for finance in 1970, the banking sector has undergone a number of important changes, particularly in the past few years. Improving asset quality, increased cooperation with the international community, and strong growth in domestic deposits amidst prominent economic expansion have all contributed to the development of the banking and larger financial systems. However, the strengthening of one of Latin America’s five-largest financial centres remains a work in progress.

For full text see http://www.oxfordbus
More information is available in

Tuesday, July 30, 2013

Approved at third debate arrangement of custody of the shares issued to the bearer

Current Panamanian authorities expect the new immobilization bill to help Panama pass the current OECD peer review process.   What they ignore is that there will always be a new black list until Panama is turned again into a banana republic.The tax authority reports the approval as follows:

The plenary of the National Assembly of Deputies approved the Draft Law N° 568 "that adopts a custodial arrangements of the shares issued to bearer" legislation that seeks to preserve the image of Panama as cooperating country in the fight against the misuse of the financial services, and that puts a tone to the Nation with international law, in relation to the topic.
Frank De Lima, head of the Ministry of Economy and Finance (MEF), Dario Espinosa, Deputy Minister of Finance and Andrés Fuentes de León, General Secretary of this institution, attended the plenary session of the National Assembly of Deputies, at the time of the adoption of the Draft Law N° 568.
The custody of the shares issued to the bearer will enable the Panamanian State comply with the commitments made by previous administrations with the Global Forum on Transparency and exchange of information; also contribute to avoid the inclusion of Panama in discriminatory lists that may affect the competitiveness of the different sectors of the economy of our country.
This policy was supported by technical studies conducted by the Superintendence of Banks in Panama and is a part of the strategy that began the National Government in 2009 to preserve the good image of Panama, as cooperating country in the fight against the misuse of the financial services, preventing money laundering and the financing of terrorism.
Establishes the custody of the certificates of the shares issued to bearer, through an authorized custodian, being these banks, securities houses or attorneys with the control of the Fourth Chamber of Business of the Supreme Court of Justice, in a special register; the same shall enter into force on the second working day, after two years of have been enacted as law of the Republic of Panama.

Monday, July 29, 2013

UK-Panama Double Taxation Convention signed in London

Double Taxation Convention

A first-time comprehensive Double Taxation Convention between the UK and Panama was signed in London on 29 July 2013 by The Rt Hon William Hague MP, Secretary of State for Foreign and Commonwealth Affairs and H.E. Mr Fernando Núñez Fábrega, Foreign Minister of Panama.
The Convention generally follows the OECD Model Double Taxation Convention. Important features include exemption from withholding tax on certain dividends and low withholding rates on interest and royalties. The Convention also includes the latest OECD exchange of information article.
The Convention will enter into force once both countries have completed their legislative procedures.
HM Revenue & Customs
29 July 2013

UK-Panama Double Taxation Agreement 2013

... ..

Retiring in Panama, Belize and Costa Rica


Retiring Way, Way South of the Border

Americans are starting to head into Central America for retirement, lured by luxury real estate and eased residency requirements.

When Steven and Robin Fine started searching for a place in Latin America to spend their early retirement, they looked at spots in Mexico and Costa Rica, both popular destinations for American retirees. On a trip two years ago, they decided to stop by Panama, too.
"We thought we would like Panama the least," Mr. Fine, 51 years old, a former communications executive said, "but we liked it the best."
The combination of luxury apartment buildings, good restaurants and modern hospitals drew the couple to Panama City, where 1½ years ago they spent $1.1 million, plus about $250,000 on renovations, on a 48th-floor penthouse with a view of the Pacific. It is now their full-time home.
The Central American nations of Panama, Belize and Nicaragua are increasingly competing with Costa Rica and Mexico for North American retirees and second-home buyers. New luxury developments, outfitted with spas, restaurants, marinas and golf courses, are on the rise. Builders say they are using more high-end materials and adding upscale amenities designed to appeal to affluent American buyers.
Bobby Pereira for The Wall Street Journal
Steven and Robin Fine renovated a $1.1 million, 48th-floor penthouse in Panama City.
These countries offer packages of residency and breaks on taxes and fees that imitate Costa Rica's pensionado program, which was introduced in 1971 and helped set the groundwork for a boom in retiree emigration from North America. Nicaragua added such a law in 2009, offering foreigners with retirement incomes tax breaks on everything from cars to construction materials. Last year, Panama, which has a long-established retiree program, created a path to citizenship for retirement residents and introduced a new residency program for people under retirement age that has lowered requirements for investment in property, business and other ventures.
Despite their inroads with American retirees, these countries still don't attract the same numbers as more established destinations, such as Mexico and Costa Rica. In 2011, more than 50,000 Americans collected Social Security in Mexico and more than 5,000 in Costa Rica. But Mexico's well-publicized drug war and escalating violence are starting to push Americans to look at new places for retirement. Central America, however, has its own problems with crime. 
The U.S. Department of State labeled the crime rate in Nicaragua "critical" and the murder rate in Belize "extremely high," though concentrated in Belize City and not in tourist areas. In Costa Rica, petty crime such as theft and "smash and grab" muggings have increased in the past couple of years, along with home invasions. In Panama, murders and gun violence have decreased in recent years, but reported rape and theft have increased. 
"Panama remains relatively safe when compared with other Central American countries, yet crime rates are higher than one would encounter in most of the United States," says the State Department's 2013 report.

Wednesday, July 24, 2013

Martinelli's legislators move ahead restrictions to bearer shares

The Panama Ministry of Economy English-speaking staff prepared this press release:

The Draft Law N° 568 "that adopts a custodial arrangements applicable
to the shares issued to the bearer", was adopted in the first discussion
by the Commission of Economy and Finance, the National Assembly of
The legislation provides the adoption of a regime that allows preserve
the bearer shares, through the custody of their certificates in a private
manner, by an authorized custodian, with the purpose of being able to
have certainty of its owner in specific cases, without affecting its free
movement, on a confidential basis.
Dario Espinosa, deputy minister of Finance, said that "through this bill
strengthens the country's commitment to comply with high standards of
transparency and good use of the financial services, at the same time
comply with the international agreements, previously acquired by
On this legislation, Espinosa added that "it complements the
Government's efforts to prevent the inclusion of our country in
discriminatory lists that could affect the competitiveness of the
Panamanian banking system, which we know is one of the pillars of the
economy of Panama".
According to the new provision, may act as local custodians of the
certificates of the shares issued to the bearer, the banks of a general
license, fiduciary regulated by the Superintendence of Banks in Panama,
securities houses and central securities duly registered by the
Superintendence of Stock Market of Panama, as well as lawyers or
resident agents.
The custodial arrangements apply to shares issued to the bearer poses
which shall come into force on the date of the next business day, then
after two years, since the promulgation of the same as law.
The deputy minister Espinosa, in front of the members, was
accompanied by the administrator of the National Authority of Public
Revenues (ANIP), Luis Cucalón.

Monday, July 15, 2013

Bearer shares do exist in OECD member countries

Panama has been offering to amend its corporate legislation to the same degree of confidentiality as other OECD members.  As we see from the example of bearer shares in OECD member Greece, they can exist perfectly without the need of immobilization or restriction when issuers are non-listed corporations.  Bearer instruments also exist for business entities in Wyoming (U.S.) and England.
The level playing field is more levelled in some places...

What types of non-listed shares do Greek société anonymes have?

Greek codified company statute 2190/1920 provides for two basic forms of non-listed shares in Greek société anonymes: (i) bearer shares and (ii) registered shares. When purchasing non-listed shares, the buyer should request a copy of the company’s Articles of Association (AoA), which stipulate the type, number and nominal value of the shares that have been issued by the company. Registered shares are issued in the name of a particular shareholder. In this case, the transfer of the particular shares requires that the name of the shareholder be prescribed on the share certificate itself. In the case of bearer shares, the name of the owner of the shares is by definition not stipulated on the share certificate itself.

Are companies obligated to issue share certificates verifying ownership of shares?

Companies are obligated to issue share certificates for bearer non-listed shares. If the company has registered non-listed shares, the AoA may preclude or limit its obligations to issue share certificates. In this case, the AoA determine the manner in which the shareholder’s capacity is proven in order for the rights deriving from the shares to be exercised. In the case the AoA do not contain a relevant provision, as well as in any other case in which share certificates are not issued, the proof of the shareholder’s capacity takes place on the basis of the data contained in the shareholder’s book or any temporary certificates issued and, if necessary, the documents in the possession of the shareholder.
The above share certificates may embody one or more non-listed shares. In the latter case, the certificates become less marketable. Shareholders are allowed to ask that existing share certificates be replaced by others embodying fewer shares if this is permitted in the AoA. Instead of share certificates, temporary share certificates may be used for a predefined period of time until the share certificates are issued. If this is the case, the transfer of shares is effected by virtue of the transfer of these temporary share certificates.

How are bearer non-listed shares transferred?

Transfer of bearer non-listed shares is effected by virtue of an agreement concluded between the seller and the buyer regarding the transfer of the seller’s shares and the delivery of the share certificates or the temporary share certificates from the seller to the buyer that embody the said shares. Possession of the share certificates is sufficient evidence for the holder to prove that he/she is the owner of the shares, such evidence being able to be brought forth both before the company as well as before third parties. As concerns the company, the holder of the share certificates is entitled to exercise the shareholders’ rights attached to the certificates. The exercise of these rights does not require registration in the books of shares or notification to the company.  The burden of proof that the holder of the share certificates is not the owner lies with the company. As concerns third parties, the presumption of possession means that it is possible for a bona fide third party to validly acquire ownership from a person not legally possessing the shares, if the third party did not have the knowledge of the fact that the seller did not have ownership of the share certificates.

By Konstantinos Thomopoulos

See also OECD Report Towards a Level Playing Field shares

Monday, July 08, 2013

Bermuda Minister: Offshore centres ‘scapegoats’ for big countries’ policy failures

It is sad that government officials of emerging financial centers from different continents have never met together, like OECD, OPEC, BRIC and other economically-motivated alliances.  The West Indian prime ministers may meet regularly for regional matters but it is hard to visualize them making a strong anti-OECD statement along with Panama's outspoken Martinelli, Uruguay's Leftist Mujica, Seychelles' Michel and the Cypriot, Luxembourgois and Swiss officials.   Each country sees themselves as different (or superior) to the other financial centers and is confident that they can weather the storm through bilateral talks with each "name-and-shame" powers through Free Trade Agreements or the European Union.   Since the promoters of each financial center made confidentiality a competitive advantage, within their own countries bankers are unknown to the rest of the general population who votes for Presidents who may be oblivious to the contributions their banking centers make in providing access to easier credit, technology and sustainable employment of their communities.
Bermuda's Finance Minister said it the way it is: US and European governments need money for tax-and-spend schemes and OECD technocrats have deceived them into thinking there is a pot of gold of trillions of dollars at financial centers elsewhere when centers like London is the largest tax haven for other countries.

Bermuda and other Overseas Territories are being used as the scapegoats for policy failures of larger countries, but more must be done to educate Europe about the Island’s business model.
So said Finance Minister Bob Richards and Premier Craig Cannonier as they updated the media yesterday on their meetings with British Prime Minister David Cameron.
Mr Cannonier stressed that no agreements were signed in London and his Government will not do anything to jeopardise Bermuda’s financial model or previous agreements the Island has signed.
Mr Richards said there was a “groundswell” of opinion against offshore financial centres in London driven by a number of factors.
“First of all the US is coming out of a recession, Europe and the UK are not. Unemployment remains very high in the UK. Budget deficits are ballooning So it's a very difficult and negative environment over there.”
He said the Overseas Territories and Crown Dependencies were “to some extent being used as scapegoats and distractions for domestic policy failures.”
In addition, there was a “corps of non-Governmental organisations” who had “latched on to this notion that either multinational organisations or so-called tax havens are responsible for these poor countries not having any money.
“I was very surprised at the virulence of that sentiment that exists over there right now. Our message is to a significant extent being overwhelmed by that noise.
“Therefore we have to up our game.”
Mr Richards said that Bermuda had been more successful with its public relations in the US than in the UK.
“We just kind of assumed that because we have this relationship with Britain and we have these representatives in our midst at all times at a most senior level that somehow there’s an understanding over there of what Bermuda is all about.
“And I was surprised and dismayed to find out that that was not true. They don’t understand what Bermuda is all about. They continue to lump us in with other jurisdictions that are engaged in offshore banking that have secrecy laws, that are engaged in money laundering. These are things that Bermuda is not involved in.”
The Bermuda delegation had stressed to Mr Cameron that Bermuda and the other OTs had not been given a “fair opportunity” to examine the multilateral agreement that he wanted signed.
“It is important that you understand that Bermuda has not signed any agreement,” the Premier said.
“We need to be responsible, and in being responsible we must look at every ‘T’ and make sure that it is crossed and every ‘I’ to make sure it is dotted. Because we do not want to put in jeopardy the financial model we have in Bermuda.”
The Premier said Bermuda had no problem with sharing tax information and providing information about beneficial ownership of companies domiciled here, and had been doing so for many years.
“When it comes to the highest regulations, Bermuda has always been [among] the forerunners,” the Premier said.
But Mr Cannonier stressed that Bermuda’s model was not banking, but insurance. “It is the businesses that are domiciled here that pay out in billions of dollars to ensure that many of the places like the UK and the United States can get back up running again and can create jobs and sustain jobs and put them back in the positions they were in before these things (catastrophes) happen.”
He said: “There is a great misunderstanding about what it is that we do. So we will continue to ensure that we get the message out there.”
No other territories had signed the multilateral agreement, he said.
Asked if the UK Government accepted Bermuda’s request for more time, he said: “They have to.”
But the Premier stressed that a signing ceremony had never been on the agenda.
“Sovereign nations like the United States and Canada are still coming to terms with this global agreement, so it’s going to be a while before we all come to a consensus as to exactly the direction we want to go in. They also are looking at this very closely and they are being responsible as well.
“So as we move toward tightening up the net of illegal activity I’m sure that some agreements will be found, but right now we are not at that position.”
Asked about the efforts of companies like Google to avoid paying millions of dollars in taxes using vehicles domiciled here and in other countries, Mr Cannonier said Ireland’s double tax treaty was a key factor in enabling Google’s tax avoidance.
“Bermuda is down the chain. So if you want to avoid this thing happening, the UK, the G8 nations really need to go to Ireland and the likes and address them first.”
Mr Cannonier added that misrepresentation of Bermuda in UK media stories will end with better public relations.

Kangoocar :: June 18, 2013 6:38 pm

Thankfully we have a competent OBA handling our affairs!! I totally agree that we need to get the message out there that we are NOT a tax haven!!! We offer a platform that enables countries such as the US and others to have their citizens save money on insurance matters, which means when catastrophes do occur in their countries their people have affordable insurance to cover the costs!!! They do in fact know this and it is nothing more than political posturing to cover their own inability to have their day to day costs of running their own countries!! 
What we provide for them out weighs the lost revenue!!!!

32n 64w :: June 18, 2013 7:05 pm

"You have had it good for a number of years. What have you done with all the spoils of this industry during the last 20 years?"

This shows a clear misunderstanding of our tax system. There are no "spoils" or hidden caches of tax revenues hiding in bank accounts or under Parliament.

Stop trying to export your tax policies and expect other countries to be your collection agents. We are not paid servants of the IRS, CCRA or HMRC (as a starting point).

Don't criticize, condemn or confuse our progressive and functioning tax systems as one with your own. 

Bermuda has a varied and fair tax regime that is rooted in an entirely different collection and measurement approach that shouldn't be ignored or overlooked simply because other countries are either unable or unwilling to adopt different mechanisms for themselves because its politically inconvenient. 

We are not poster children for your bad decisions or failed implementation criteria. Stop blaming us for the ineptness of your own politicians who have crafted an environment built on the backs of special interests and narrow mindedness. 

Our policies work for our country. If you don't like the results change your own methodologies and stop pointing the fingers at others. You need to own the problem and stop being nimbys about it.

Fezzer :: June 18, 2013 7:39 pm

It's better to be assumed an *****, than open your mouth and remove all doubt! 

The Uk need to sort out their own affairs before pointing the finger at us! Some people might claim that Britain is a tax haven compared to France, now that Hollandes socialist tax policies have been implemented, and some wealthy French people have left France for the uk, Russia etc!

Britain is not a banking island, we have 4 banks, and that is it, all which you can walk into on the high street! Cayman however have over 3000 banks which mostly are brass plate banks! 

We have had tax information exchange agreements with the US and UK since the 80s and 90s respectively, we are currently on the white list of the OECDs ranking! We have one of the best anti money laundering laws in the world, the US and the UK on the other hand lol, where do you think the worlds money laundering happens, not in tiny bermuda, but of course New York and London, hence HSBC! 

Our tax policy for our reinsurance sector is beneficial to the UK and the US as it lowers the cost of insurance for citizens in those countries. When 9/11 occurred about 70% of all payments in the aftermath were paid out by Bermudas companies! The same for hurricane sandy etc. 

The UK should change its own laws if it wants companies like google and Thames water to pay its appropriate share of taxes!

Explain to me how it's Bermudas fault that Thames water pays no corporation tax??

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