A new law in Panama that makes it easier to identify owners of bearer shares and the conclusion by the Cayman Islands government of negotiations with the United States on the sharing of tax information under the US Foreign Account Tax Compliance Act (FATCA) have sounded the death knell for secrecy in the region’s tax havens.
Panama’s move to abolish anonymity for bearer share holders combined with recent double taxation and tax information exchange agreements have put the country’s secretive tax haven status at risk following concerted pressure from the OECD and G20.
At the start of August, Panama’s president signed law no.47 aiming to improve transparency in the country’s financial system. The law, which will come into force on August 6, 2015, sets out to establish a custodial regime applicable to bearer shares which requires owners to appoint an authorized custodian in order to maintain a record of the final beneficiary of the instruments.
The act was passed so as to allow a competent authority (such as a foreign government) to receive information about the owners of bearer shares. A three-year transition period will apply from August 6, 2015 in respect of bearer shares issued prior to the law’s entry into force.
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