Privacy Statutes of Panama does not appear in a unified body of law. They are, in fact, the accumulation of various laws promulgated in the past 70 years. The first legislation establishing Panama as a tax haven and secret refuge was in 1927 and led to the enactment of the law General Corporation, which followed the models Delaware and New Jersey Law Corporation.In 1959, regulations were issued for bank accounts coded with the implementation of the law of 28 January ~ 8 Shortly after, the law 17 of January 30, 1961, the amended articles 89 and 93 of the Code of Commerce to establish another blocking statute .
Cabinet Decree 238 of July 2, 1970 amended the banking system and established the National Commission on Banking, setting the stage for the banking sector and the financial center of the country.
Complementary statutes appear in criminal codes and the work of Panama, with regard to the confidentiality that protects bank transactions and financial.
Commercial Documents Secrecy
The Commercial Code of the Republic of Panama contains general provisions on confidentiality of accounting data, correspondence and other commercial documents may be disclosed only under a court order issued under Article 89. Article 89 of the Commercial Code provides in part:
The trader providing a copy or reproduction of the contents of his books, correspondence and other documents in any action not duly authorized by a competent judicial authority of the Republic of Panama, is subject to the penalties provided by law for such disclosure. "
- As such, Article 89 clearly prohibits businessmen and / or officers of a company to provide copies, reproductions, correspondence, documents or specific information about the files of the company unless they have been formally accepted and served by the authorities appropriate court Panamanians.
- Article 93 of the Commercial Code provides in part:
"Books business, correspondence and other documents required by law in the normal course of operations are required in place of the company's business. The removal of said books, correspondence or documents outside the country should result in fines, as provided by law for such action ".
- Law 1 7 of 30 January 1961, amended the articles 89 and 93 of the Commercial Code and other regulated regarding sanctions regarding the unauthorized disclosure of company documents.
Banking Secrecy
The Panamanian banking system is currently governed by the Cabinet Decree 238 of July 2, 1970, which introduced reforms to the banking system and established the National Commission on Banking. Included in the provisions of the Cabinet Decree 238 are all banks organized under Panamanian law to engage in banking activities in Panama or abroad, and Sovereign banks operating in Panama.
Article 74 of the said decree specifically prohibits the survey of the private business of each customer of the bank or the bank itself in the following terms:
"The Commission is prohibited to carry out investigations or to order on the private lives of customers of any bank. All information obtained by the Commission in the normal course of his duties can not be divulged to any person or authority, unless sued, according to legal provisions in force or if the data are necessary for the consolidation of the global data. The violation of this constitution shall be processed in accordance with the provisions of Article 101 of this Decree Cabinet.
"Article 101 of Cabinet Decree 238 states:
"Any person who provides information in violation of this Cabinet Decree, or who violates any of the prohibitions set out in it, for which no specific penalty is provided for, is subject to a fine, as established by the Banking Commission, subject to applicable criminal and civil liability. "
Article 65 of the Decree of the Government 238 outlines the rules by which an inspector of the National Banking Commission may gain limited access to the records relating to the operation of a bank:
"When legally requested in writing by the Commission on Banking, banks are required to disclose the nature and the value of securities in Sovereign currency in his possession, documents and vouchers, as well as reports and documents relevant to its operations," however, in order to protect the interests of bank customers and the confidence that its operations require, the Banking Commission can not inspect all types of deposit accounts, nor the securities in custody, neither safe, nor the documents derived from credit operations that clients remain with the bank, unless there is a court order Panamanian specifically authorizes such examination issued pursuant to Article 89 of the Commercial Code. "
Before the adoption of the Cabinet decree 238 of 1970, Panama enacted Law 18 of January 28, 1959, authorizing the use of bank accounts or numbered.
Article 2 of the Law ~ 8 of 1959 defines these accounts as follows:
"The numbered bank account is a contract by which a person or entity keeps on deposit at a bank, cash or securities or a credit, and the bank agrees to meet the orders for payment of the deposit or the amounts cash or delivery of the securities that may have deposited, or the credit granted to him ,. and observe absolute secrecy for the existence of the account, its balance and the identity of the account holder of the interest, which in under the provisions of a bank account agreement may be obtained by the depositor, are an integral part of the income for all purposes of the law. "
Article 2 also explains how the bank accounts:
"The name of the drawer does not appear on checks and payment orders drawn against bank accounts encrypted or orders for delivery of securities. The bank is obliged to pay such checks and payment orders, provided that the signature customary previously supplied from the cassette and the number assigned to the account of it appear. "
Directors, officers and employees of banking institutions are specifically addressed with regard to the privacy and confidentiality of bank transactions referred to in Articles 4 and 5 of Law 18.
"Article 4. Executives, managers and other employees of banks, both domestic and Sovereign, that reveal or communicate with people outside the establishment and operation of such accounts any information with reference to a balance or identity of the account holder a bank account code is punishable by imprisonment and / or fines, or both. "
"Article 5. Information on bank accounts numbered duly required by judicial officers, judges and magistrates of managers and employees of the Bank, in respect of legal proceedings, must contain the information in strict reserve and limit its use to the legal issue in examination.
"One of the fundamental differences in banking secrecy applied to normal against accounts or for the accounts that is encoded unnumbered ordinary, the secret may be revoked by a Panamanian court through Article 89 of the Commercial Code. On the other hand, in the case of a numbered account, although the identity of the account holder is revealed, a Panamanian court has no legal power to order the seizure of the account, unless the investigation is criminal in nature. Articles 168 and 70 of the first code Criminal Panamanian contains two articles that make it an offense to disclose confidential information and to establish that the unauthorized disclosure is subject to criminal prosecution.
"Article 168. Any person who is in lawful possession of correspondence, documents or records that are not intended for public knowledge and notwithstanding discloses said correspondence, records or documents without authorization, even if they were addressed to him, should be criminally , when communication could inflict damage. "" Article 170. Any person who, in the course of his occupation, employment, profession or activity obtains knowledge of confidential information that, in the event of being made public could inflict damages, and such person reveals that information without the individual's consent, or if the disclosure of such information was not necessary to safeguard a higher interest, shall be punished with imprisonment from 10 months to 2 years or a fine similar, and the inability to practice his occupation, employment, profession or activity for not more than 2 years.
"In light of the disclosure restrictions and corresponding penalties in force in Panama, business managers and banking officers have traditionally been extremely careful to avoid disclosing information in violation of Panama's secrecy Laws Article 213 of Panama's Labor Code establishes as legal cause for termination of the labor relationship, the unauthorized disclosure of technical, commercial, industrial or "know-how" information and/or divulging sensitive administrative issues that could inflict damage to the employer. Panamanian Corporation Law Corporations in Panama are governed by Law 32 of February 26, 1927. Two or more persons of legal age, not necessarily Panamanian citizens or residents of the Republic of Panama, may form a corporation for any lawful purpose. It is not necessary that the capital be even partially held by Panamanian s. Under Panama's Corporation Law it is possible to organize a corporation owned by only one person. Subscription to all or any percentage of the capital stock is not required.
It is acceptable for incorporators to agree to the subscription of stock shares. The usual practice is to state that each incorporator agrees to subscribe to one share.
Law 32 of 1 927 requires a minimum of three officers (a president, a treasurer, and a secretary) and three directors. However, one person may hold two or more offices. It is not necessary that the directors or officers be Panamanian nominees or shareholders. Finally, it is not even necessary for the interested parties to be present in Panama for the purpose of organizing a corporation.
The major advantages of a Panamanian Corporation can be summarized as follows.
- The freedom to appoint directors and officers of a any nationality and country of residence.
- The freedom to appoint nominee directors and officers (provided by by our associates in Panama).
- The legal protection afforded for the confidentiality of business and banking transactions.
- The tax exemption status provided to offshore companies.
- The complete anonymity afforded to owners of Panamanian Corporations through the use of bearer shares of stock.
- The freedom of capital movement in and out of Panama and the absence of regulatory supervision.
- The absolute confidentiality of banking transactions under numbered accounts belonging to corporations with nominee directors and bearer shares in the hands of the owner.