Wednesday, January 23, 2013


Reports indicate that the Government of the Republic of Panama, unhappy with the large amount of pubilicity given to financial fraud cases found to be linked to the abuse of bearer shares, will soon pass legislation that will require that the names of Beneficial Owners of shares of corporate stock be registered with a regulatory agency. In essence, true bearer shares, where the (unregistered) physical owner of the shares is the owner of all company assets, will cease to exist. This will, of course, require legislative action.

Many American and Canadian expats, living in Panama, have been the victims of fraudsters who covertly transfer ownership of corporations to themselves, thereby acquiring ownership of real estate held in corporate names. We have covered this problem in detail in our widely-read article entitled:
Bearer Shares Fraudsters fleece Foreigners in Panama .

Whilst there are a number of technical issues to be dealt with, we welcome Panama's new efforts to close the door on one of its major corporate loopholes, provided that effective and universal registration is implemented.
Compliance officers should be aware that, when the appropriate legislation is close to passage, you may see large-scale "capital flight" of illicit funds, where clients who do not want their names to appear in any government records will move their liquid assets out of the banks. The reason: the identities of Beneficial Owners would probably be shared with US law enforcement agencies, as well as regulatory bodies.

1 comment:

  1. England LLP bearer warrants and Wyoming LLC bearer scrip continue being issued, so the Panama bearer law remained unchanged.
    For people who are too dumb to safeguard their bearer shares, the best solution is to ask for registered shares made out to their name.
    Why should the rest have their shareholding information available to government entities in "democratic" places like Russia and Venezuela ?


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