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
http://mypanamalawyer.blogspot.com/search/label/bearer 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??

Full text in http://www.royalgazette.com/article/20130619/NEWS/706199981