IMPORTANT – Law 526 of 2026: Economic Substance Requirements for Foreign-Source Passive Income

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  • Understanding Artificial Intelligence: Applications and Impact

    Understanding Artificial Intelligence: Applications and Impact

    ARTIFICIAL INTELLIGENCE

    What is Artificial Intelligence?

    Artificial Intelligence, known by its initials as AI, is a computer field that focuses on developing systems and programs capable of imitating and performing tasks that normally require human intelligence.

    What tasks are included?

    These tasks include learning, problem solving, natural language understanding, pattern recognition and decision making.

    Which are the best known and most used today?

    • Artificial Intelligence in the field of healthcare.
    • Virtual assistants such as Alexa, Google assistant or Siri.
    • Automatic translators such as Google translator.
    • Systems recommendation such as the YouTube digital platform.
    • Chatbots such as ChatGPT.
    • Games such as Stockfish.
    • Artificial Intelligence art creators like Midjourney.
    • Vehicle driving like Tesla Autopilot.
  • Panama’s Global Leadership in Ship Registry: Latest Updates

    Panama’s Global Leadership in Ship Registry: Latest Updates

    Panama has maintained its global leadership in Ship Registry

    According to the international platform IHS Markit, Panama has maintained its global leadership in Ship Registry with 8,540 vessels and 251.1 million gross tonnages (GT). By the same token, in the last World Fleet Monitor published this year by Clarksons Research Platform, the Panamanian flag is flown by 16% of the ships that make up the world fleet.

    Of said percentage, 339 ships of new construction, with which the General Directorate of Merchant Marine has managed to get closer to its objective of attracting to Panama vessels of this segment. On the other hand, in order to maintain the standards of the international maritime industry, the Panama Ship Registry canceled ex- officio 161 vessels of around 17 years old, of which an important number of these vessels were related to unreported and not regulated fishing.

    With the measures implemented, Panama remains committed in developing its services in repect to the Registry of Vessels, by promoting the decarbonization of the industry, in order to optimize its assistance to shipowners worldwide.

  • New Minimum Wage Rates in Panama: Executive Decree No. 1 of 2024

    New Minimum Wage Rates in Panama: Executive Decree No. 1 of 2024

    New Minimum Wage in Panama

    Executive Decree No. 1 of 10 January 2024 (the Executive Decree), determines the new minimum wage rates in the Republic of Panama, applicable by region and activity.

    The regions.

    • Region 1: Integrated by: Panama, Colon , San Miguelito, David, Santiago, Chitre, Aguadulce, Penonome, Bocas del Toro, La Chorrera, Arraijan, Capira, Chame, Anton, Nata, Las Tablas, Bugaba, Boquete, Taboga, San Carlos, Chepo, Guarare, Los Santos, Pedasi, Dolega, San Felix, Baru, Boqueron, Portobelo, Donoso, Santa Isabel, Santa Maria, Parita, Pese, Atalaya, Chanquinola, Chiriqui Grande, Almirante, Tierras Altas, Omar Torrijos Herrera.
    • Region 2: The rest of the country.

    The minimum wage.

    The Executive Decree increases the minimum wage in all the regions of the country.

    • The minimum wage increase applies as follows:
    • An increase of 4.5% in all small enterprises
    • An increase of 6% in all large enterprises
    • An increase of 7% applicable to all enterprises of the banana sector.
  • Panama Prohibits Import and Sale of Electronic Cigarettes

    Panama Prohibits Import and Sale of Electronic Cigarettes

    Panama Prohibits Import and Sale of Electronic Cigarettes: What You Need to Know

     

    Law 315 of 2022 prohibits the use in the Republic of Panama of electronic nicotine delivery systems, electronic cigarettes, vaporizers, tobacco warmers and other similar devices, with or without nicotine, in places where the consumption of tobacco products is prohibited and the marketing of these products throughout the country.

     

    It is also prohibited, the purchase or promotion of electronic nicotine delivery systems, electronic cigarettes, vaporizers, tobacco warmers and other similar devices, with or without nicotine, over the Internet in the Republic of Panama.

     

    Excepted from this prohibition is the importation of said products in free zones and special economic areas established in the Republic of Panama, for the purpose of exporting and re-exporting to a third country.

  • PROPANAMA: Executive Decree No. 22 of 2023 in Panama

    PROPANAMA: Executive Decree No. 22 of 2023 in Panama

    Regulation of PROPANAMA: Executive Decree No. 22 of 2023 in Panama

     

    Executive Decree No. 22 of 2023, regulates Law 207 of 2021 in Panama that establishes the Authority for the Impulse of Investments and the Promotion of Exports of Panama (PROPANAMA). In this sense, PROPANAMA is established as a legal entity under public law with autonomy in its financial and operational management, which purpose is to impulse investment and export activities in the country.

  • Streamlining Maritime Procedures: Introducing REN

    Streamlining Maritime Procedures: Introducing REN

    Streamlining Maritime Procedures: REN (Maritime Procedures System and Electronic Register of Ships)

     

    The Panama Maritime Authority, as part of its technological modernization plan, has carried out the necessary administrative steps to update the technological platforms used by the Panama Ship Registry.

     

    This project seeks to unify the flag registration process between the Directorate General of Merchant Marine and the registration of the title to property deeds of the vessels in the Directorate of Public Registry of Ship Ownership.

     

    Qualities that the new REN technology platform will have:

     

    • Efficiency, speed and improvement in the quality of the services provided.
    • Facilitates access to information.
    • Ensures the confidentiality of the data.
    • Automatic notification on the progress of the procedures or applications.
    • Enquiries, follow-up and follow-up of procedures or applications  remotely from anywhere in the world.
    • Institutional payment gateway that will allow payment by credit or debit card.
    • Minimizes the requirement and handling of physical documentation within the processes.
    • Application of authentication and digital security in document management, integrating the qualified electronic signature to the processes for a complete traceability of the process and the generation of documents and electronic certificates.

     

    Source: PMA Update Bulletin in its third edition of 2023

  • The Impact of El Niño on the Panama Canal: Drought and Transit Restrictions

    The Impact of El Niño on the Panama Canal: Drought and Transit Restrictions

    The Impact of El Niño on the Panama Canal: Drought and Transit Restrictions

     

    Among the effects of the El Niño climate phenomenon in Panama, is there are very intense rains towards the Atlantic slope that cause flooding and a decrease in rainfall towards the regions located on the Pacific slope and an increase in the Caribbean slope.

     

    This decrease in the Pacific slope has caused a drought in the Panama Canal, which is reflected both in the canal’s budget for the next fiscal year and in its water condition. According to the Canal Administration, it is estimated that this condition will continue until September of next year, which translates into a draft of 44 feet and daily transit limited to between 30 and 22 vessels, instead of the 36 to 38 vessels that They regularly transited the Panama Canal.

     

     

  • Dollarization- Panama's Unusual Currency Journey

    Dollarization- Panama's Unusual Currency Journey

    Dollarization – Panama’s Unusual Currency Journey

    Why did Panama adopt the U.S. dollar as its official currency?

    Panama’s adoption of the U.S. dollar as its official currency in 1904 marked a crucial turning point in its economic history. The decision to dollarize was driven by several factors, including a need for economic stability and international credibility.

    Before dollarization, Panama used the Colombian peso as its official currency. However, this led to economic instability and currency devaluation. To address these issues and attract foreign investment, Panama made the bold move to adopt the U.S. dollar.

    The Dollarization Map

    What are the benefits and challenges of using the U.S. dollar in Panama’s economy?

    Panama’s unique currency system of dollarization offers several benefits. It provides stability by linking Panama’s economy directly to the robust U.S. dollar. This stability has resulted in low inflation rates and increased investor confidence.

    However, dollarization also presents challenges. Panama has limited control over its monetary policy, as it cannot print its own currency. Additionally, it must ensure a steady supply of U.S. dollars to meet its economic needs. Despite these challenges, the benefits of dollarization have far outweighed the drawbacks, contributing to Panama’s economic success.

  • Social Progress in Panama- Healthcare and Education Milestones

    Social Progress in Panama- Healthcare and Education Milestones

    Social Progress in Panama – Healthcare and Education Milestones

     

    How has healthcare improved in Panama over the past century?

    Panama has made significant strides in improving its healthcare system over the last century. Access to medical services has expanded, resulting in better healthcare outcomes for the population. The government has invested in healthcare infrastructure, leading to the construction of modern hospitals and clinics across the country.

     

    Additionally, healthcare professionals in Panama have received advanced training, enhancing the quality of medical care available to citizens. These improvements have contributed to increased life expectancy and reduced mortality rates.

     

    What progress has Panama made in education, and how has it impacted society?

    Panama has made substantial progress in its education sector, with a focus on increasing access to quality education. Investment in educational infrastructure, teacher training, and curriculum development has led to improved educational outcomes.

     

    These advancements in education have a profound impact on society by empowering individuals with knowledge and skills. A well-educated population is better equipped to contribute to the workforce, drive economic growth, and participate in the nation’s development. Education has become a cornerstone of Panama’s social progress, paving the way for a brighter future.

  • Types of Trademarks

    Types of Trademarks

    Types of Trademarks

     

    Law 35 of 1996 (modified by Law 61 of 2012), in Article 90, establishes the elements that can constitute trademarks. Some of these elements are: words, images, figures, symbols and graphics, three-dimensional shapes, colors, sounds, smells or flavors.

     

    Consequently, the types of trademark can be:

     

    DENOMINATIVE

    Consists exclusively of words or letters, numbers or other customary typographical characters or a combination thereof that can be written.

     

    FIGURATIVE

    Consists only of figures, images, color combinations, symbols or drawings, without incorporating words, letters or numbers.

     

    MIXED

    Are a combination of verbal and figurative elements.

     

    OLFACTORY

    Consists in the use of a scent, aroma or fragrance as a distinctive and exclusive feature of a trademark.

     

    SONOROUS

    Consists exclusively of a sound or a combination of sounds.

     

    THREE-DIMENSIONAL

    Are trademarks that permit the recognition or identification of a product by means of its shape, container and packaging.

  • Understanding Trademark Misuse Consequences

    Understanding Trademark Misuse Consequences

    Understanding Trademark Misuse Consequences

     

    Executive Decree No. 466 of 2015, which modifies Executive Decree No. 123 of 1996, establishes the scope of application that the National Customs Authority (NCA) has to  apply sanctions when the provisions of the laws on industrial property, copyright and their related rights are violated.

     

    When the NCA retains merchandise in process or in transit, it will carry out an inventory and official appraisal of the retained merchandise and notify by edict the owner of the protected right, the consignee of the merchandise, and interested third parties.

     

    Once the owner of the protected right has been notified, he may present opposition to the transit or processing of the merchandise in the NCA. If no opposition is filed, the merchandise will be released.

     

    In the event that an opposition has been filed and the bond has been deposited, the NCA   will send the merchandise retained for custody outside the port area to the Public Ministry and the investigation phase will continue.

  • Understanding ITBMS Rates in Panama: 7%, 10%, and 15%

    Understanding ITBMS Rates in Panama: 7%, 10%, and 15%

    SME and their ITBMS TAX  obligations

     

    For small and medium-sized companies in Panama, the Transfer Tax on Personal Property and Services (known by the Spanish acronym of ITBMS) is similar to the value-added tax that exists in other countries.

     

    The following are some important aspects that small and medium-sized companies should take into consideration:

     

    1. REGISTRATION: When the annual income of the companies exceeds USD$36,000.00, they must register as a taxpayer of the ITBMS with the Directorate General of Income (DGI);
    2. BILLING AND DECLARATIONS: Companies must issue invoices that include the ITBMS in their sales of goods and services;
    3. ITBMS RATES: In Panama, there are different ITBMS rates: 7%, 10%, and 15%. It is important that small and medium-sized companies know what rates apply to their products or services;
    4. EXEMPTIONS AND REDUCED RATES: Some goods and services are exempt from the ITBMS, while others may have reduced rates. The companies should be informed on the exemptions and reduced rates applicable to their business in order to properly comply with the tax regulations;
    5. TAX ADVICE: Due to the complexity of the tax legislation and possible updates, it is advisable to seek tax advice to ensure correct compliance with the obligations related to the ITBMS and other taxes.
  • United States and Panama: Strategic Semiconductor Supply Chain Partnership

    United States and Panama: Strategic Semiconductor Supply Chain Partnership

    United States Chooses Panama to Strengthen Semiconductor Supply Chain

     

    The United States has chosen Panama as a strategic partner to strengthen the semiconductor supply chain. Panama’s geographical location and political and economic stability make it a key logistics center. This partnership will benefit both countries by diversifying the supply chain and creating economic and technological opportunities for Panama. The collaboration promises to drive sustainable development and regional competitiveness in the digital era.

  • All about trademarks – Part II

    All about trademarks – Part II

    All about trademarks (II)

    August 30, 2023

    How are trademarks classified?

    Trademarks are classified as product trademarks and service trademarks.

     

    Is there a trademark classification system?

    The trademark classification system is called the Niza Classification. It is an international classification that applies to the registration of trademarks and consists composed of 45 classes distributed as follows: from class 1 to class 34, is the classification of products, and from class 35 to class 45, is the classification of services.

     

    Did you know that in Panama there is a class 0?

    Panama is the only country that uses a class 0 to classify trade name records.  This classification covers the trade name of a company or industrial, commercial, or service establishment.

  • Frequently asked questions about the Single and Private Registry of Final Beneficiaries

    Frequently asked questions about the Single and Private Registry of Final Beneficiaries

    Frequently asked questions about the Single and Private Registry of Final Beneficiaries

     

    1. What is the Single and Private Registry of Final Beneficiaries (known by the Spanish acronym of RUBF)?

    It is a system whereby lawyers that offer the services of resident agent, register the legal entities that they represent and their final beneficiaries.

     

    1. What is the entity responsible for ensuring compliance?

    The Superintendence of Non-Financial Subjects (known by the Spanish acronym of SSNF).

     

    1. Is the registration to the RUBF mandatory?

    All resident agents have the obligation to register with the RUBF.

     

    1. Is there any cost to register with the RUBF?

    There are no registration costs.

     

    1. What are the steps to follow to comply with the RUBF?

            ◦ Register as a resident agent;

            ◦ Register the corporation; and

            ◦ Register the final beneficiaries.

     

    1. Legal basis?

             Law 129 of 2020 and Executive Decree No.13 of 2022.

  • Single and Private Registry of Final Beneficiaries in Panama: Enhancing Transparency and Combating Money Laundering

    Single and Private Registry of Final Beneficiaries in Panama: Enhancing Transparency and Combating Money Laundering

    Single and Private Registry of Final Beneficiaries of Legal Entities in Panama: Transparency and Fight against Money Laundering

     

    Pursuant to Law 129 of 2020 and Executive Decree No. 13 of 2022, the Single and Private Registry of Final Beneficiaries of Legal Entities (known by the Spanish acronym of RUBF) was created, as a tool that promotes transparency in the financial system, prevents money laundering, fights against terrorist financing and strengthens the integrity of the business system of the country.

     

    The resident agents are required to register in the RUBF and to provide the following information:

     

    • Data of the legal entity; and
    • Data of the final beneficiaries.

     

    The law designates the Superintendency of Non-Financial Subjects, as the governmental entity responsible for the administration and custody of the RUBF.