Ultimate Beneficial Owner Regulation in Panama: Enhanced Transparency and Investor Confidence by 2025
Panama, a strategic hub in the heart of America, continues to strengthen its legal and regulatory framework to consolidate itself as a premier investment and tax residency destination. In this constant effort for transparency and alignment with international standards, the ultimate beneficial owner regulation in Panama emerges as a fundamental pillar. This article explores recent advancements, legislative initiatives, and how these measures not only bolster the country’s financial system but also generate an environment of greater confidence for entrepreneurs and investors considering relocating their operations or tax residency to this vibrant country.
The Push for Transparency in Panama: A Global Commitment
Panama’s Superintendency of Non-Financial Entities (SSNF) has reiterated the crucial importance of intensifying transparency mechanisms. Superintendent Isabel Fernández has emphasized the need for clear identification and ultimate beneficial owner regulation in Panama, especially for entities holding contracts with the State. This proactive approach underscores Panama’s commitment to global best practices and the recommendations of the Financial Action Task Force (FATF).
“Indeed, for Public Procurement to access ultimate beneficial owner data, a change in law is required to include them as an authorized authority to view that information. This step is part of the international FATF recommendations, and we are working towards that,” stated Isabel Fernández, Superintendent of the SSNF.
This statement highlights a key point: the political and regulatory will to adapt and modernize the existing legal framework, ensuring that Panama remains a responsible and transparent player in the global economy. This effort directly benefits investors by providing a safer and more predictable business environment.
The Unique Registry of Ultimate Beneficial Owners (RUBF): A Key Tool
At the heart of Panama’s strategy to combat money laundering and terrorist financing is the Unique Registry of Ultimate Beneficial Owners (RUBF). Administered by the SSNF, this registry is a dynamic and constantly updated platform designed to centralize information on the ultimate beneficial owners of legal entities.
- Constant Update: The SSNF maintains fluid communication with lawyers, who are responsible for making the registrations, ensuring that the information is always current and accurate.
- Data Protection: It is guaranteed that the information contained in the RUBF is protected and used in compliance with the highest standards of security and confidentiality, a crucial aspect for confidence in the system.
- FATF Alignment: The existence and continuous improvement of the RUBF is a clear reflection of Panama’s commitment to the FATF guidelines, an intergovernmental body that sets standards to prevent money laundering and terrorist financing. You can find more information about its recommendations on its official website: FATF-GAFI.org.
Superintendent Fernández highlighted that they are “very attentive to any needs lawyers may have… to ensure that the information is current, protected, and complies with transparency standards.” This underscores the collaboration between the regulator and the private sector in the effective implementation of ultimate beneficial owner regulation in Panama.
Towards Greater Fiscalization: The Proposed Law on Public Procurement
In a significant legislative move, Representative Janine Prado has presented a bill to the National Assembly to increase transparency in public procurement. This project seeks to modify key articles of Law 22 of 2006, the law governing state contracts, with the aim of requiring companies that contract with the public sector to disclose their ultimate beneficial owners.
Key Points of the Proposal:
- Disclosure Obligation: Every legal entity contracting with the State must provide the General Directorate of Public Procurement (DGCP) with the complete list of natural persons who are their ultimate beneficial owners.
- Mandatory Publication: The DGCP will be obliged to publish this information on its website, fostering accountability and public scrutiny.
- Reporting Changes: Companies must report any changes in their shareholding structure, ensuring that the information is always up to date.
- Nominal Shares: Corporations aspiring to state contracts must operate with nominal shares, a mechanism that facilitates the identification of owners.
- Consequences of Non-Compliance: In case of non-compliance with these requirements, contracting entities will not be able to disburse contract funds, which introduces a strong incentive for adherence.
This bill reinforces the idea that “the use and reception of public funds necessarily imply a higher level of citizen scrutiny,” as argued by Representative Prado. For those looking for how to start a company in Panama with a view to operating in the country, it is vital to understand these regulations that promote a more ethical and transparent business ecosystem.
Panama: A Robust and Reliable Financial System for Ultimate Beneficial Owner Regulation
Panama’s effort to strengthen its legal framework has not gone unnoticed. Ricardo Moreno, Training Supervisor at the Financial Analysis Unit (UAF), highlighted that the country has managed to exit several international lists thanks to its commitment to the effective compliance with financial regulations.
“Panama has shown that its system is robust. We are not a tax haven; we have laws that are complied with, and that is why we have exited those lists,” Moreno stated.
This statement is fundamental for Panama’s international reputation and for investors. It means that operating in Panama implies doing so in an environment that respects global transparency and legality standards. Confidence in the Panamanian financial system is an invaluable asset, and the ultimate beneficial owner regulation in Panama directly contributes to this perception.
Furthermore, Moreno emphasized the guarantee of confidentiality: “All information that obliged entities send to the UAF is handled with absolute reserve. It is a secure and reliable system.” This balance between transparency and protection of sensitive information is vital for attracting and retaining international investment.
Implications for Investors and Tax Residents in Panama
For those considering Panama as their next destination for tax residency or to expand their businesses, these advancements in ultimate beneficial owner regulation in Panama are excellent news. A robust and transparent regulatory framework offers multiple advantages:
- Increased Confidence: Operate in a country that aligns with international standards, reducing reputational and legal risks.
- Legal Stability: A clear and constantly evolving legal system provides a more stable environment for long-term planning.
- Capital Attraction: A transparent environment attracts high-caliber investors seeking security and legitimacy in their operations.
- Ease of Compliance: With proper advice, compliance with these regulations is straightforward, allowing you to focus on growing your business.
Understanding ultimate beneficial owner regulation in Panama and its impact on the Panamanian tax system is crucial. This commitment to transparency reinforces Panama’s position not only as a logistical and financial center but also as a reliable and legitimate place to establish your home and business operations.
Conclusion: Panama, A Future of Transparency and Opportunities
Recent announcements and legislative initiatives regarding ultimate beneficial owner regulation in Panama are a clear sign of the country’s unwavering commitment to transparency and compliance with international standards. For entrepreneurs, investors, and those seeking new tax residency, this translates into a safer, more predictable, and more trustworthy environment. Panama not only offers a favorable business climate and an enviable lifestyle, but it also positions itself as a destination that values integrity and clarity in all its operations.
If you are considering establishing your business or tax residency in this dynamic country, expert advice is essential to navigate the legal framework and make the most of the opportunities Panama offers. At PanamaWay, we are ready to guide you through every step of the process, ensuring a smooth and successful transition.