Financial Crime World

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Panama Tightens KYC Regulations: New Obligations for Businesses and Resident Agents

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Panama has introduced two significant regulatory changes aimed at increasing the country’s compliance with international standards for financial transparency and combating money laundering and terrorist financing. The new measures require businesses to register beneficial owners and conduct extensive due diligence on resident agents.

Registration of Beneficial Owners

As of March 2020, Law No. 129 came into effect, mandating the registration of beneficial owners through a private and unique online system. This system requires legal entities registered in Panama to report on their shareholders and beneficial owners via their registered agents. A beneficial owner is defined as a natural person who owns or controls 25% or more of the shares or voting rights of the company, or those responsible for managing the business.

  • Entities have a deadline of 30 business days from incorporation or any modification in reported information to register with the system.
  • Failure to comply will result in penalties, including:
    • Suspension of corporate rights
    • Non-registration of documents in the Public Registry
    • Monetary fines

Due Diligence Registers for Resident Agents

Law No. 254, enacted in November 2021, introduced extensive due diligence registers for resident agents. Resident agents are now required to:

  • Verify the activities of their clients

  • Monitor them through relevant mechanisms

  • Keep accounting records for entities that do not operate in Panama or those holding assets within or outside the country

  • These records must be kept for a minimum period of five years and made available for review and safekeeping.

  • Entities that fail to comply will face suspension of corporate rights by the Public Registry, while resident agents who do not implement these measures will be subject to fines.

Deadline for Compliance

As the deadline for delivery of accounting and due diligence records approaches on October 31, 2022, businesses are urged to start the process of obtaining relevant documents or updating outdated ones. TMF Panama, a leading provider of regulatory compliance services, can assist companies in navigating these complex regulations and ensuring timely compliance.

For more information, please make an enquiry.