Our country has strengthened the regulatory framework on tax transparency and the prevention of illicit activities by updating the information of legal entities and their beneficial owners with the Superintendency of Non-Financial Entities (hereinafter the “SSNF”).
Non-Financial Obligated Entities (SONG):
Natural or legal persons who, due to the nature of their professional, commercial, or business activities, are susceptible to being used in money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. Law 23 of 2015 establishes the obligation of these entities to adopt preventive measures against these illicit activities, with the SSNF (National Security Superintendency) responsible for their supervision and regulation through administrative channels. These include: Companies in the Colón Free Zone, Panama Pacifico, Baru Free Zone, Panama Diamond Exchange and free zones, money remittance companies, casinos, games of chance and gambling and betting system organization, development companies, real estate agents and brokers, construction companies, both general and specialized contractors, cash-in-transit companies, pawnshops, companies that market metals and precious stones, the National Charity Lottery, exchange houses, companies dedicated to the purchase and sale of new and used cars, the Agricultural Development Bank, the National Mortgage Bank, and professionals who carry out activities subject to supervision.
Beneficial Owner (BO) of legal entities:
A natural person who owns, controls, or significantly benefits from a legal entity, including those who have a direct or indirect interest in the ownership or profits of a company, trust, foundation, or other legal structure, or the ability to influence its management or policies. Specifically, a beneficial owner is considered to be someone who owns or controls, directly or indirectly, 25% or more of the shares, equity interests, or voting rights of the legal entity.
For entities without equity participation, a certification or sworn statement signed by the representatives or authorized persons detailing the beneficial owners is required. Law 129 of 2020 established the Single Registry of Beneficial Owners (hereinafter the “RUBF”), creating a private and centralized system for registering beneficial owners of companies, the administration and custody of which fall to the SSNF (National Superintendency of Financial Institutions).
Attorneys acting as Resident Agents register legal entities in the Public Registry of Panama, as well as the beneficial owners of these entities. The objective is to ensure that the competent authorities have timely access to beneficial owner information, while simultaneously guaranteeing the confidentiality and security of the system.
Updating this information is an ongoing responsibility, and failure to do so may result in penalties. These regulations apply to all legal entities incorporated in Panama, including corporations, private interest foundations, limited liability companies, and trusts.
Regulatory framework:
Mainly:
1) Law 52 of 2016: Obligation to maintain accounting records and supporting documentation for legal entities that conduct operations outside of Panama or that do not.
2) Law 254 of 2021: Obligations for beneficial owners, administrators, and resident agents, including the preparation and maintenance of accounting records and their annual submission to the Resident Agent.
3) Executive Decrees No. 361 of 2015 and No. 363 of 2015: Authorize the SSNF to issue guidelines and directives for compliance with the regulations.
Resident Agents must register with the RUBF (Single Registry of Financial Institutions) and keep the information of the legal entities they represent up to date. As the point of contact between the authority and the legal entity, they must assist in maintaining constant and transparent communication with their Resident Agent, who must be registered with the SSNF (National Superintendency of Financial Institutions) and the RUBF; ensuring the accuracy and currency of the information provided to their Resident Agent; and maintaining up-to-date and accessible accounting records and supporting documentation.
Avoid non-compliance, as it can lead to the suspension of rights and even dissolution. We recommend maintaining specialized legal counsel in compliance, transparency, anti-money laundering, corporate law, and registration law.
At EVANS GROUP, we are committed to supporting our clients on this journey, helping them ensure their operations comply with transparency and legality.