This note seeks to explain the Passing of Law 47 of 6 August 2013 (hereinafter "Law 47") which adopts a custodial system for bearer shares, and how it affects you as our client.


On 6 August 2013, the National Assembly of Panama passed Law 47, which once it comes into effect will result in the immobilisation of Bearer Shares, which basically means that anyone in possession of Panamaian Bearer Shares is required to designate an authorised custodian to take possession of such shares.

This change can mainly be contributed to the ever-increasing pressure to comply with international standards set out by the OECD (Organisation for Economic Cooperation and Development) as well as recommendation 24 of the Financial Action Task Force (FATF).

This has also become important for most double taxation treaties signed by the Republic of Panama.

How will this be implemented?

Current holders of Bearer Shares in existing companies will need to deposit their certificates with an authorised custodian which could be a lawyer, law firm, bank or trust company in Panama who will then receive a custody certificate in return.

Future Panamanian companies who issue Bearer Shares will have to deposit those shares with an authorised custodian. The authorised custodian will be regulated in Panama and will be required to keep records of the details of the person who deposited the shares.

When will this be implemented?

Law 47 will take effect on 6 August 2015. Thereafter every holder of a bearer share certificate will have three years to submit the Bearer Shares to an authorised custodian, along with a sworn declaration providing basic identity information about the true owner, the corporation which issued the share and the resident agent.

Every corporation issuing Bearer Shares after 6 August 2015 must submit bearer share certificates to the authorised custodian within 20 days from the date of issuance, along with a sworn declaration. This declaration must be made available to the competent authorities who may request it while investigating acts related to money laundering, the financing of terrorist activities or other illegal activities.

The law also requires that the Supreme Court of Panama keep a registry of lawyers and law firms that serve as authorised custodians. However, this doesn't mean that shareholders' names are to be available in the Public Registry, merely the corporation's officers, directors and registered agents' names are registered at the Public Registry.


Many offshore financial centres are moving towards removing Bearer Shares to keep in line with the OECD. Panama has, however, found an innovative solution to protect privacy, while still managing mechanisms to control illegal activities by immobilising bearer shares rather than eliminating them entirely.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.