Tighter Controls Over Beneficial Ownership Reporting in Panama

Panama has enacted Law 254, requiring international legal entities to provide their resident agent with accounting records annually. The Law adjusts existing legislation on anti-money laundering (AML) and aims to meet international standards on tax transparency. 

The Law is divided into three main areas, dealing with accounting records, due-diligence and registration of final beneficiaries.

 

Resident agents must obtain know-your-client information, including clients’ financial, transactional and risk profiles. They must also continuously monitor the business relationship with the client and check the clients’ declared activities. Beneficial owners must be checked against European Union, Financial Crimes Enforcement Network and United Nations sanctions lists for AML purposes.

 

Legal entities will be obliged to keep a copy of the share certificates and shareholders' registry of the corporations. These must be retained for at least five years and made available on request to the Directorate General of Revenue of Panama.

 

The timeframe for the registration of ultimate beneficial owners of legal entities will be reduced. Changes to beneficial ownership data must be updated within 15 days of a change, instead of the previous 30 days.

 

A range of penalties will be enforced for resident agent non-compliance with any of the new measures and legal entities failing to register or update beneficial ownership information may be suspended from the Public Registry of Panama.

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Sources:

Arias Law (PDF)

Mata & Pitti

HG.org