Modernization of the Panamanian Financial System 

Recently, the Cabinet Council approved the Bill for the Modernization of the International Financial System of Panama. This initiative, consulted and developed with the main unions and associations of the sector, in which our Partners, María de Lourdes Marengo and Gilberto Arosemena, propose to adopt new financial products and modifications in some processes, as well as to renew and improve instruments and institutions to make them more competitive and efficient.

According to the statement of the Ministry of Economy and Finances, in terms of financial innovation and Fintech, the Bill defines new Specialized Financial Entities (called "EFE's") and grants the regulatory functions thereof, temporarily to the Ministry of Economy and Finances to later transfer these functions to the Superintendence of Banks. Among the purposes of the EFE's is the opening and management of payment accounts, transfers, money remittances and electronic money issuance, among others.

Of great importance is the creation of the Special Regulatory Framework for the Support of Innovation, known internationally as Sandbox. The Collective Financing Centers (CEFICO) known as crowd funding platforms are also defined.

Additionally, it is proposed the adoption of legal vehicles such as the Family Patrimonial Administration Offices, whose structures are created to provide administrative and financial services to family groups, creating a flexible, appropriate regulatory framework with adequate incentives that promote part of the Family Patrimonial Administration Offices of Latin America or  other geographical areas be established in Panama.

The initiative proposes the incorporation of well-known vehicles in other jurisdictions such as cellular companies and segregated assets, holding companies, limited partnerships (LP) and Limited Liability Association, among others.

The bill also creates new insurance products, which along with the proposed legal vehicles will attract the generation of new structures for estate planning..

This project complies with the highest international transparency standards, aiming to turn Panama into an international financial platform characterized by personalization, specialization, immediacy, with a multi-offer proposal.

Banking Profits grow 40%

According to the report of the Superintendence of Banks of Panama, during January 2018 the profits of the International Banking Center (IBC) registered an increase of 40% compared to the same period of the previous year.   This increase occurs as a result of increases in non-recurring financial income, such as the purchase and sale of securities and transactions in derivative instruments. Likewise, the decrease in the provision expense, as a result of the entry into force of IFRS 9, has allowed banks to make an adjustment against retained earnings, which has favored the performance of the first month of the year.

The report also indicates that the IBC maintains its indicators of financial soundness, mainly in terms of liquidity and solvency, at almost twice the minimum required by the regulation. The above and together with a strengthened regulatory framework, offer the necessary conditions to guarantee the solvency and financial stability of the IBC.

US$1,200 Millones en Bonos

On April 9th, The Republic of Panama entered in the international markets through the issuance of a new Global Bond with maturity in 2050 for an amount of US $1,200 million and a coupon of 4.50%. The transaction closed with a margin over the US Treasury (30 years) of 150 basis points.

This issue attracted the interest of investors from regions such as North America, Europe, Asia, Australia, the Middle East and Latin America, receiving offers of up to 4,500 million dollars, three times more than the indicated amount. With this issue, the external yield curve of Panama's public debt is improved, obtaining a tighter margin over the US Treasury debt instruments, which results in lower financing costs for Panama. 

Extension of Line 2 of the Panama Metro to tender

Panama Government Purchase 2018-2-80-0-08-LS-001716: "Design engineering services, construction of civil works, auxiliary line installations and stations, and interfaces for the start-up of the bypass that connects Line 2 of the Panama Metro with the Instituto Técnico Superior del Este (ITSE) and the Tocumen International Airport (AIT) are required.

A tour on the project site will be held on May 16, 2018 at 10:00 am.

Offers's Deadline : July 25, 2018.

Construction of sewerage for US $ 60 million

The Ministry of Health is calling for tenders for the design and construction of the sewerage network of the Burunga district, in the province of Panama Oeste ( West Panama). Panama Government Purchase 2018-0-12-0-15-LP-023656.

Offers's Deadline: May 31, 2018.

Request more details about this and other issues of Public Procurement with our lawyers Khatiya Asvat and Joaquín De Obarrio.

Natural Gas and the Panama Canal

During 2017, 6 million tons of natural gas traveled through the Panama Canal, and by 2020 this figure could rise to 30 million tons, due to the increase in supply in the US deposits and of the reservations in Australia.

Panama Canal tests the performance of solar energy for its operations

With the installation of floating solar panels, the Panama Canal carries out tests aimed at improving energy efficiency in its operations and reducing its environmental impact.

In the long term, they expect that this project will serve as a base so that larger ones can be set up in the Canal and in the country. Due to the nature of the Panama Canal business, it seeks to enhance the use of water in all its operations and take advantage of the multiple water mirrors that the Canal area has.  

Projected Increase in Transit

For the fiscal year ending September 2018, the Panama Canal Authority (PCA) foresees that the cargo that will transit through the Canal will reach 431 million tons, 7% more than the previous period. According to the PCA, the main reasons are the improvement in international prices of raw materials and the increase in demand from emerging economies.

Panama inaugurates Merchant Marine Consulate in China

Relations between Panama and China continue to strengthen, now with a Private Marine Merchant Consulate in Shanghai, which seeks to develop the maritime, logistics and port sector in that country.

China represents 20% of the world population, is the second user of the Panama Canal and the main supplier of the Colon Free Zone.

Currently, Panama has the largest registry of ships in the world, with more than 8 thousand flagged ships, it provides the solidity of governmental legal security, which has favored it since 1917, it was the first country in the world to implement a registration system of international ships at a public level, with the preference of important ship-owners and operators of maritime powers internationally, such as Japan, Singapore, South Korea, among others. With the opening, the technical liaison between the Panamanian administration and the maritime security authority of China is strengthened, ensuring compliance with the safety regulations on Panamanian flag vessels

Learn more details about the development of the Maritime sector in Panama consulting our specialists, María Teresa Díaz and  Belisario Porras.

Felipe Escalona participates in AeroExpo Panamá 2018

In recent days was held in Panama the third version of Aero Expo, considered the only aviation exhibition of its kind between Mexico and Brazil, being one of the most important expos of Latin America for business aviation.

Our Senior Associate, Felipe Escalona, participated in this event where industry experts gave seminars on topics of great importance in executive aviation companies, such as managing the costs of aircraft operations.

Panama is currently consolidating as an air hub, with a large Convention Center to be inaugurated soon, the expansion of the Tocumen airport, more than 130 SEMS companies established in Panama and the movement we have at the Panama Pacifico Airport.

To Learn more details on opportunities in the aeronautical sector, contact our specialistss María de Lourdes Marengo and Felipe Escalona. 

Panama hosts regional internet registration event

Panama recently hosted the 29th meeting of the Regional Internet Registry for Latin America and the Caribbean (LACNIC), one of the most important Internet events in the region that brings together experts and representatives of the academy, civil society, the business world, governments and professionals of the telecommunications industry.

During the event, tutorials and various panels were developed by prominent speakers, which will address issues such as the depletion of Internet Protocol version 4 (IPv4), the main challenges for deploying the version that replaces it (IPv6), cyber security, Internet of the things, interconnection and Internet governance, among other topics.

Every day there are more professionals and specialists in the legal sector who seek to update themselves on these issues and be able to provide comprehensive advice to our clients.

Panama and Poland

A statement issued by the Ministry of Foreign Affairs of Panama indicates that according to the Vice Chancellor of Poland, Marek Magierowski, Panama is a key piece for the diversification of Polish companies outside Europe.

The government expressed its interest in establishing commercial promotion offices in Panama, for Latin America and the Caribbean, taking advantage of Panama as a showcase for Polish companies for the rest of the region.

Learn more about this and other topics of the Investment sector, contacting our partners Nadya Price and Khatiya Asvat.

FTA with Israel

Between May 15 and 19 high officials of the Panamanian government will visit Israel to sign the Free Trade Agreement (FTA) between both countries.

This FTA seeks to promote, in addition to trade, tourism, services, legal security and public contracting.

DGI enables portal for FATCA reports

Financial institutions have until July 31st to submit the corresponding FATCA reports for 2017. For this purpose, the General Directorate of Revenues (DGI) informed financial institutions that the portal for FATCA & AEOI is already enabled for reports corresponding to the year. 2017

The DGI reiterates to the Panamanian financial institutions subject to report that for inquiries exclusively with respect to the use of the portal, the electronic mail dgi.aeoi.consultas@mef.gob.pa must be used.

Regarding the reports of the Common Reporting Standard (CRS), which must be made for the first time in 2018 with respect to information collected during the year 2017, the portal will be enabled before the end of May. The deadline is July 31, 2018.

Request more information about Tax Law contacting our specialist Dr.  Ebrahim Asvat K. 

Real estate market - 2018 perspectives

In recent days, the National Council of Housing Promoters (Convivienda) reported that Panama plans to sell 9 thousand homes and generate sales of $1,146 million, which would mean an increase of 34% compared to the value sold last year.

Of the units sold in 2017, 78% corresponded to preferential interest houses, 19% corresponded to houses with prices of $120 thousand to $350 thousand, and 3% to units with prices over $350 thousand. Last year, the majority of homes sold corresponded to those located in the price range from $65 thousand to $80 thousand, followed by units whose prices range between $95 thousand and $120 thousand.  This expected change is an indicator of the positive economic changes that the country presents.

To Learn more about this and other topics of the Real Estate sector with our attorneys Khatiya Asvat and Gilberto Arosemena.

Arbitration Guide 2018

Our Partner, Ebrahim Asvat, contributed to the last edition of the international publication "Getting the Deal Through 2018". In the chapter "Arbitration 2018: Panama", Ebrahim Asvat offers a glimpse of the legislation and regulations that govern Arbitration in Panama, providing answers to essential questions faced by businessmen and legal advisors. This guide provides a complete overview of the entire process, from the drafting of contractual clauses to the application of arbitration awards in local courts.

Click here to read publication (available in English): Arbitration 2018 - Panama.
Reproduced with authorization from Getting the Deal Through

For more information please visit,: https://gettingthedealthrough.com/area/3/jurisdiction/34/arbitration-2018-panama/