Moderna sala de juntas con una ventana panorámica al skyline de la Ciudad de Panamá. Sobre una mesa pulida descansan una balanza de la justicia dorada y una carpeta translúcida con el ícono de una cerradura.

Ultimate Beneficial Owners in Panama 2025: Key Aspects of the New Confidentiality Criterion for Investors

In a business world moving towards greater corporate transparency, Panama has recently reaffirmed its stance on the privacy of business information. A decision by the Supreme Court of Justice has set a key precedent by classifying information on the ultimate beneficial owners of companies contracting with the State as confidential. For international investors and entrepreneurs, this news is not just a headline, but a fundamental piece that defines the playing field for doing business in the country. Understanding the implications of this ruling is vital for anyone considering Panama as their next operational hub or tax residence. This article breaks down what this criterion truly means and how it impacts the structure and perception of companies on the Isthmus.

What are Ultimate Beneficial Owners and why are they crucial in the global business environment?

Before delving into the judicial decision, it is essential to clarify the core concept. An ultimate beneficial owner is the natural person who ultimately owns or controls a legal entity, either directly or indirectly. This is not the manager or general director, but rather the true owner who benefits from the company’s assets and profits.

The Global Context: A Trend Towards Transparency

Globally, bodies such as the Financial Action Task Force (FATF) and the European Union have promoted the creation of public or restricted-access registers of ultimate beneficial owners. The primary goal is to combat money laundering, terrorist financing, and tax evasion. This global trend towards transparency obliges jurisdictions to define their own balance between international cooperation and the protection of legitimate investors’ privacy.

The Supreme Court of Justice’s Ruling: An In-Depth Look

The recent full bench ruling by Panama’s Supreme Court of Justice responds to a request for access to information on the shareholders and ultimate beneficial owners of a company awarded a public contract. The Court determined that such information is considered restricted and confidential, setting a precedent for all future public procurements.

The court based its decision on current legislation, arguing that commercial information obtained by the State, as a product of economic activity regulation, is protected by confidentiality according to the Transparency Law (Law 6 of 2002).

Furthermore, the ruling refers to Law 129 of 2020, which created the Unique Registry of Ultimate Beneficial Owners (RUBF). The Court interprets that the nature of this registry, designed for state oversight and the fight against illicit activities, implies that the information contained therein is inherently restricted and not public domain. This distinction is key: the obligation to report exists, but access to that information is limited to competent authorities.

Implications for International Investors and Entrepreneurs

This decision presents a two-sided scenario for those wishing to invest or start a company in Panama. It is a measure that strengthens privacy but can also raise questions about transparency.

The Argument for Business Privacy

For many entrepreneurs, confidentiality is a strategic asset. This ruling reinforces Panama’s position as a jurisdiction that protects investor privacy. The advantages of this approach include:

  • Protection of personal security: Keeping the identity of the true owners of a business private can protect them from extortion or unwanted attention.
  • Strategic confidentiality: Prevents competitors, clients, or the general public from knowing a company’s ownership structure, thereby protecting investment or expansion strategies.
  • Capital attraction: Investors from regions where security is a primary concern may see this protection as a significant incentive to establish their operations in Panama.

The Perspective of Transparency and Reputational Risk

On the other hand, in a global environment that increasingly values transparency, this policy can present challenges. Business partners, correspondent banks, or investors from jurisdictions with stricter regulations (such as the EU or the United States) may require more exhaustive due diligence processes.

The lack of public access to information on ultimate beneficial owners in Panama could be seen as a red flag by some counterparts, which would require Panamanian companies to be proactive in demonstrating their legitimacy and good governance. It is essential to understand that this public confidentiality does not exempt companies from their Know Your Customer (KYC) obligations and from keeping their own records updated and available to authorities when required.

The Role of the Unique Registry of Ultimate Beneficial Owners (RUBF)

It is crucial not to misinterpret the Court’s ruling. It does not eliminate the obligation to declare ultimate beneficial owners. Law 129 of 2020 remains fully in force, and all Panamanian legal entities must register their ultimate beneficial owners in the RUBF, a system managed by the Superintendency of Non-Financial Entities.

What the ruling confirms is that this registry is a tool for the State, not for the public. Competent authorities, both national and international (under corresponding cooperation treaties), have access to this information for investigation and oversight purposes. Understanding these regulations is key for proper planning, an area detailed in our guide on taxes in Panama for foreigners and tax residents. Therefore, Panama complies with international reporting standards but opts for a confidentiality model regarding public disclosure.

Navigating the Panamanian Legal Environment: Key Recommendations

Given this scenario, entrepreneurs and investors should adopt a proactive and well-advised approach:

  • Prioritize Compliance: Ensure that your corporate structure rigorously complies with the obligation to identify and register your ultimate beneficial owners with the Panamanian authorities. Public privacy does not mean opacity before the law.
  • Maintain Solid Governance: Properly document your company’s ownership and control structure. Having clear and professional records will facilitate any due diligence process with international partners or financial entities.
  • Seek Expert Advice: The regulatory environment is dynamic. Having local experts who understand the subtleties of Panamanian legislation and international expectations is more important than ever. To ensure that your corporate structure complies with all regulations and takes advantage of the Panamanian system, expert advice is essential.

Conclusion: A Balance Between Privacy and Regulation

The recent decision by the Supreme Court of Justice consolidates Panama’s position as a business hub that values and protects investor privacy. This approach differentiates the country from other jurisdictions that have opted for total public transparency. For the global entrepreneur, this represents a significant opportunity to structure their operations with a high degree of confidentiality, provided that reporting obligations to authorities regarding ultimate beneficial owners in Panama are impeccably met. Success in this environment lies not in opacity, but in informed and strategic navigation of the legal framework.

If you are evaluating the advantages of establishing your tax residence or business in Panama and wish to fully understand how this legal environment can benefit you, our team at PanamaWay is at your disposal. Contact us today to chart your success strategy in one of Latin America’s most dynamic economies.

Scroll to Top