Capital Markets in Panama | Legal 500 Country Comparative Guide 2024
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This country-specific Q&A written for The Legal 500 provides an overview of capital markets laws and regulations applicable in Panama.
1. Please briefly describe the regulatory framework and landscape of both equity and debt capital market in your jurisdiction, including the major regimes, regulators and authorities.
The securities market is regulated in the Republic of Panama (“Panama”) by Law Decree N° 1 of July 8, 1999, as amended and restated from time to time (“Panamanian Securities Law”) which also created the Superintendence of the Securities Market as an autonomous entity with exclusive power to regulate, supervise and inspect the securities market related activities, securities issuers, intermediaries, investment funds and other participants of the securities market, within and from Panama.
In addition to the Panamanian Securities Law, the Board of Directors of the Superintendence of the Securities Market has the power to issue regulations in development of the Panamanian Securities Law, and the Superintendent has the power to issue opinions which are binding.
Since, under Panamanian Securities Law, stock exchanges and clearing houses are self-regulated entities, issuers of publicly offered securities are also regulated by the regulations of said entities where securities are listed, and transactions are cleared.
The Emerging Semiconductor Industry in Panama
Semiconductors are essential components in all electronic products, making them crucial players in the global economy. Recognizing their significance, the United States has identified seven countries to develop the semiconductor industry outside its borders. Among the chosen nations in Asia are Taiwan, Vietnam, Malaysia, and the Philippines. In the Americas, Mexico, Costa Rica, the Dominican Republic, and Panama have been invited to participate.
The United States has placed its bet on these four Latin American countries to relocate and establish semiconductor production to the American continent. Through the International Technology Security and Innovation Fund (ITSI Fund), it aims to invest $500 million in these countries to manufacture and guarantee a secure and reliable semiconductor supply chain over a five-year period.
Law 424 of 2024: Promoting Culture, Education, and Entrepreneurship via Creative Economy
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On March 21st , Law 424 of 2024, which promotes culture, education, and entrepreneurship through the creative economy, was published in the Official Gazette. The primary goal of this law is to develop and promote the creative economy and its educational and cultural components by establishing public policies, actions, programs, and appropriate instruments.
The creative economy is defined as a broad and transversal productive sector that encompasses various economic activities applying creativity and intellectual property to generate economic and cultural value.
The law defines a Creative Company as enterprises and businesses that create, develop, produce, distribute, and market creative goods, services, and content such as publishing houses, design studios, advertising agencies, audiovisual producers, video game or software companies, among others.
Closing a Panamanian Corporation with Commercial Operations in Panama
It is very common to find information concerning the process of incorporating a corporation in Panama. However, it is not as common to know what formal obligations arise before the various competent authorities in the event of the dissolution of a corporation with commercial operations in Panama.
There are several grounds for dissolving a corporation, but the most common ones for the purpose of this analysis are:
(i)? expiration of the duration period; or
(ii)? decision by the board of directors or shareholders (depending on who holds this power according to the bylaws).
The first option arises when the incorporation document specifies that the corporation will have a defined duration. The second option refers to the decision, through a meeting minute of the corresponding corporate body, to dissolve the corporation.
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