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2014.11.25 - Panama – Modernization of the Register of Enterprises; Implementation of Electronic Signatures on the corporate documents

 

In 2014, the Register of Enterprises of the jurisdiction of Panama implemented considerable measures for its modernization. An electronic registration system SIR (SISTEMA ELECTRONICO DE INSCRIPCION REGISTRAL) was commissioned. This was designed to modernize the process of establishing and further maintaining business entities in Panama as well as to provide additional protection for information and documents issued by the Register.

The principle of establishing companies in the jurisdiction of Panama differs from incorporation in other classic offshore jurisdictions such as Belize, Seychelles and the BVI. Whilst in certain classic offshore jurisdictions companies may be established electronically very quickly, in Panama every company is an individual task whereby the founders sign the Notarial Deed before the notary and file it with the Register of Enterprises with the company is being registered on the basis of this document.

The above registration method in Panama remains unchanged but it has now been supplemented with the following improvements:

  1. Previously the seal confirming the fact of registration of the company was physically affixed to the notarial deed. Now no seal is affixed on the document and a separate cover sheet which serves as a registration confirmation known as the Constancia de Inscription is attached to the notarial deed
  2. Whereas previously the documents issued by the Register of Enterprises, being the confirmation stamp in the notarial deed as well as an extract from the Register of Enterprises or Certificate of Good Standing, contained a physical signature of the Register officer this is replaced by an electronic one. The purpose of this is to provide a higher degree of protection against forgery of documents as the current verification code available on the documents may be compared with the Register data remotely if necessary
  3. Whereas previously the company’s identity data was determined by two parameters being the entry number (Ficha) and the document number (Documento) now the company is identified by a single number being the number of mercantile record (Mercantil Folio)
  4. The appearance of an extract from the Register has been changed including the order of information in this extract. Now the first part of the extract contains all of the company’s corporate data such as the amount of its share capital, classes of shares, registered address and date of registration. The second part of the extract now contains details of the company’s officials such as its directors, president, secretary and treasurer as well as the names of subscribers being the individuals who signed the original notarial deed when the company was established.
  5. A special note should be made of the position of the legal representative as this status sometimes causes questions when the company’s constituent documents are being analyzed. The status of a legal representative does not imply that this person is authorized to act on behalf of the company or to represent the entity for business or legal purposes. The obligation to manage the company in Panama is imposed on its directors. The position of a legal representative is standard corporate practice in Panama and refers to “the authorized representative for the purpose of relations with state institutions of Panama” such as the Register of Enterprises or other local institutions who may turn to such an individual in order to contact the company. A legal representative does not participate in the company’s business or legal activities.

INTERNATIONAL OVERSEAS SERVICES comments:

Competitiveness is now an important issue in the commercial sector and also government agencies in progressive jurisdictions compete for the quality and effectiveness of their services for the speed and ease of servicing.

Such reputable institutions as, inter alia, the World Bank Group make regular assessments of ease of doing business and compare jurisdictions in this aspect.

The implementation of electronic system in Panama’s Register of Enterprises, which is designed to improve, stabilize and modernize the establishment of businesses in this jurisdiction, will serve as a positive aspect to improve the ranking of Panama in the above ratings. This will contribute to the growing popularity among the entrepreneurs who carry out international business operations using Panama companies.

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