The Panamanian economy grew in the three years from 2010 to 2012 at an average annual rate of 9.7%, earning its place as the most dynamic economy in Latin America. This growth, driven mainly by the construction and mining sectors, has promoted the adaptation and updating of national legislation.
The legal system is based on the formal sources of law, derived from the Constitution, which secures the right to private property, economic freedoms and the respect of individual rights, guaranteeing legal security to nationals and foreigners.
For Investors
As a result of major changes in its economic, social and financial structure, the country has seen changes in key legislation. Evidence of this is provided by the recent modifications made to the immigration law, which dated from 2008.
These modifications created new categories and opened the doors to foreign investors, as well as making allowance for the expansion of fiscal, labour and immigration benefits in the so called special economic zones. These zones have taken off in the past few years, as more multinational companies have established themselves there so that they are able to take advantage of the benefits they offer.
Additionally, amendments to Law 22 of 2006, which regulates public contracting, incorporated technological aspects which expedite processes and provide greater transparency in contracts. The amendments have facilitated the execution of large projects, of which there has been a greatly increased number in recent years, in several sectors throughout the country.
For The Financial Sector
In the financial sector, Law 67 of 2011 introduced relevant changes to the regulations governing the stock market. The scope of the regulating entity was expanded to include regulation of the foreign exchange activity, which currently can be carried out solely by broker dealer houses and which takes into account some exceptions. The concepts of financial instruments exchanges, over-the-counter markets and administrative service providers for the stock market were also introduced, among the many other changes that have provided greater security to players in the financial markets.
Meanwhile, the banking sector registered growth of 10% over 2012. The Superintendence of Banks, the sector’s regulating entity, plans to modify the existing regulations on credit and technological risks, as well as those on artificial hedging instruments.
For Industry
Other recent changes were introduced by Law 61 of 2012, which amends the Industrial Property Law. This reform simplifies a number of formalities and provides protection for trade names without the need for prior registration. It also allows multi-class trademark registration, eliminates the compulsory registration of licences of use, and other provisions which are presented in detail in later sections of this chapter.
Likewise, a Trademark Law Treaty was approved (Law No. 24 of 2012) to simplify the national and regional systems of trademark registration. It is now possible to file a single trademark application to cover various goods and services from different international classes, provided that the required fees are paid. The Patent Cooperation Treaty, the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure, and the International Convention for the Protection of Varieties of Plants were also approved.
Panama has showed a clear interest in strengthening its image as a cooperating country in the fight against the misuse of international financial services, through the signing of 19 treaties covering the avoidance of double taxation and also tax information exchange. Similarly, a law was approved which for the first time regulates the spin-off of corporations, as well as the reactivation of dissolved companies. Additionally, another law was enacted which adopts a custody system applicable to shares issued to the bearer, and will enter into effect in July 2015, as a framework in accordance with international standards regarding tax matters, money laundering and terrorist financing.
Read More from OBG
