Panama

Introduction Most readers will know that the origin of this topic, like many others, related to changes in anti–money laundering, counter‑terrorist financing and counter‑proliferation regimes is found in the FATF Recommendations, also known as the “International Standards.” The FATF Recommendations, first issued in 1990, have undergone numerous modifications. Some revisions have been broad and substantive, while others have resulted only in targeted adjustments. This is the case with Recommendation 24, “Transparency and beneficial ownership of legal persons” and its Interpretive Note, both of which were amended and adopted at the October 2024 FATF Plenary following a complex consultation process involving countries, organizations and even private‑sector stakeholders. Recommendation 24 was revised, among other aspects, to include an obligation for countries to adopt effective measures ensuring that shareholders and directors acting as nominees are not misused for money laundering or terrorist financing purposes. Likewise, the Interpretive Note incorporated three mechanisms suggested by FATF to safeguard against the misuse of nominee services: Transparency Mechanism This mechanism requires any person acting as a nominee to disclose their status, as well as their own information and that of the person who appoints them (nominator), to the company and to any relevant registry so that such information can be officially recorded. Depending on the system adopted by each country under Recommendation 24, the “registry” may include the share register, the Companies Register, or the Beneficial Ownership Register, where such a register exists. The registry must maintain this information, and the nominee status must be made public, for example, through a label or asterisk placed next to the nominee’s name. Licensing Mechanism Under this approach, nominees must obtain a license or belong to a licensed and regulated profession under AML laws. The country must therefore establish a formal licensing and regulatory system. In addition, the Transparency requirements described under the first mechanism must also be met. Prohibition A country may opt to partially or fully prohibit the use of nominee shareholders and/or nominee directors, eliminating the figure entirely or allowing it only under strict conditions. Following these changes, various jurisdictions have begun reviewing and updating their legal frameworks to align with the new standards of Recommendation 24. Country Case Studies Panama — Transparency Requirement Panama follows the Transparency Requirement. Through Agreement JD‑02‑2022, controls were established over the provision of nominee services. The Agreement imposes strict obligations on annual risk assessments, enhanced due diligence, detailed documentation, traceability and risk mitigation, all within the framework of Law 23 and its risk‑based approach. Additionally, the Agreement requires resident agents to submit annual declarations indicating (i) the number of companies with nominee relationships, and (ii) information regarding nominees and their nominators. British Virgin Islands — Transparency Requirement The British Virgin Islands has also adopted the Transparency Requirement. Beginning January 2nd, 2025, the BVI Business Companies (Amendment) Act, 2024 and the related Beneficial Ownership and Companies Regulations 2024 entered into force, introducing major transparency obligations directly affecting the use of nominee shareholders and nominee/professional directors. Companies must now file specific information with the Registrar whenever a shareholder acts in a nominee capacity, including the nominator’s identity and the dates on which nominee relationships begin or end. In addition, companies must file their Register of Members (capturing any nominee status) with the Registrar on a non‑public basis. With respect to directors, the BVI does not formally prohibit nominee directorships but has introduced new filing requirements. These obligations expand regulatory oversight and transparency for individuals offering nominee director services, complementing the broader reforms to beneficial ownership reporting and member register filings. As a result, nominee directors are now more visible to authorities. Bermuda — Prohibition Requirement Bermuda has opted for the Prohibition Requirement. On 21 November 2025, the Companies (Prohibition of Bearer Shares and Nominee Directors) Amendment Act 2025 was passed and came fully into force on 10 December 2025. This Act amends the Companies Act 1981 and the Limited Liability Company Act 2016 with respect to bearer shares, nominee directors, alternate directors and beneficial ownership record‑keeping. Under the amendments, the appointment of nominee directors is expressly prohibited. Although the legislation does not define “nominee,” Bermuda relied on the definitions included in the FATF Standards. Bahamas — Mixed Regime (Transparency + Prohibition) Bahamas presents a mixed regime, fully permissible under Recommendation 24, combining the Prohibition Requirement (for nominee directors) and the Transparency Requirement (for nominee shareholders). The International Business Companies (Amendment) Act, 2025, published in the Official Gazette of 19 June 2025, introduces major amendments to the Companies Act (Ch. 308) and the IBC Act (Ch. 309). The most relevant changes include: Explicit Prohibition of Nominee Directors Through the insertion of Section 41A, “Prohibition of Nominee Directors,” the Act prohibits individuals acting under the instructions of a third party (such as a beneficial owner) from serving as directors of an IBC in The Bahamas. Transparency Requirement for Nominee Shareholders When a shareholder acts as a nominee: this must be explicitly indicated in the Memorandum and the Register, a declaration of trust identifying the beneficiary must be executed and kept at the company’s registered office, and the nominee shareholder must disclose the identity and relevant particulars of the person on whose behalf they act, in compliance with the Register of Beneficial Ownership Act 2018. The Act includes a six‑month transitional period for companies to replace nominee directors and update their records and beneficial ownership documentation. Belize — Licensing Requirement Belize adopted the Licensing Requirement with the issuance of the Financial Services Commission (Nominee Shareholders and Directors) Regulations, 2025 (SI No. 158 of 2025). This regulation transforms the provision of nominee services into a regulated activity requiring prior licensing or authorization from the FSC to the service provider, fit and proper test to the proposed nominees which need to be employed by the registered agent with management position or if not provided by the registered agent, be nominated only once directly by the Beneficial owner and be physically present in Belize during the period appointment. This regime is accompanied by continued transparency obligations, including disclosure of nominee status and nominator identity to registries and authorities, are fully consistent with the second mechanism permitted under Recommendation 24. The regulations also impose strengthened obligations on registered agents, who must identify, document and report all nominee relationships and must submit a declaration to the authority within six (6) months of the regulation’s entry into force, detailing: the measures adopted to identify nominee relationships, the compliance status of all companies under administration, and a list of non‑compliant companies, with reasons or justifications. In summary, Belize professionalizes and subject’s nominee service providers to prior supervision while preserving the transparency sub‑requirements established by FATF. Nevis — Licensing Requirement Nevis meets FATF expectations for beneficial ownership transparency through a simple but effective model centered on its system of licensed Registered Agents. Legislation requires that beneficial ownership information of Nevis legal persons be obtained and maintained by these agents, who must keep such information adequate, accurate and up‑to‑date, in accordance with the obligations imposed on trust and corporate service providers. This information is kept in the Registered Agent’s records (separate from the internal registers of members or directors that companies must maintain) ensuring that authorities can access verified ownership and control data when necessary while preserving the jurisdiction’s longstanding confidentiality framework. With respect to nominee arrangements, Nevis adds an additional compliance layer through its licensing regime under the Nevis Trust and Corporate Service Providers Ordinance, 2021. Applicants seeking a Class I or Class IV license, both of which authorize the provision or arrangement of nominee directors or nominee shareholders, must expressly indicate that they will provide nominee services and must submit full due‑diligence information on the individuals who will act as nominees as part of the regulator’s fit‑and‑proper assessment process. This mechanism preserves confidentiality, since nominee identities are not publicly disclosed, while ensuring that the Regulator has complete visibility over who is acting as a nominee within Nevis incorporated entities. As a result, Nevis complies with international standards by guaranteeing regulatory access to verified beneficial ownership and nominee information, yet maintains the non‑public, privacy‑protective structure characteristic of the jurisdiction. Cross-Cutting Observations Across all jurisdictions examined, regardless of the mechanism chosen to mitigate misuse of nominee services, there are sanctioning frameworks applicable both to companies and to providers of nominee services. Whether through enhanced transparency, licensing requirements or outright prohibition, each regime incorporates administrative and/or monetary penalties for failures to comply with disclosure, registration, verification or authorization obligations, ensuring that nominee arrangements remain subject to effective controls and an enforcement structure consistent with FATF standards. Among the approaches reviewed, licensing emerges as the most balanced and comprehensive mechanism for managing nominee arrangements. In addition to ensuring that the identities of both nominee and nominator are formally recorded, thus capturing all the benefits of transparency‑based models, licensing places these actors within a regulated perimeter. By requiring nominee service providers to operate as licensed persons or entities, jurisdictions introduce a further layer of institutional control: one that empowers competent authorities to supervise, monitor and enforce compliance on an ongoing basis. This supervisory oversight strengthens the integrity of nominee services, aligns market practices with FATF expectations, and enhances the overall reliability of corporate transparency frameworks by ensuring that nominee activities are not only disclosed, but also subject to continuous regulatory scrutiny. By contrast, an outright prohibition of nominee arrangements represents the most restrictive and arguably the least proportionate approach. International organizations, including the World Bank and the FATF, acknowledge that properly regulated nominee arrangements can serve legitimate and sometimes necessary purposes within corporate governance systems. These include compliance with local laws requiring a minimum number of directors, the need for companies to access specialized managerial expertise, or situations in which a shareholder may require a trusted individual to exercise representation on their behalf in the conduct of corporate affairs. Blanket bans on such arrangements overlook these legitimate use cases and risk infringing upon individual rights protected under national constitutions or human rights frameworks, particularly where the freedom to choose representatives or structure corporate governance is recognized. Consequently, prohibition may compromise both proportionality and legal soundness, making it a far less balanced option compared to licensing or enhanced‑transparency models. Conclusion The reforms undertaken by various jurisdictions to mitigate the misuse of nominee services represent a significant advancement toward the transparency and traceability objectives required under FATF Recommendation 24. Although countries have adopted different mechanisms, all converge on the need to ensure that nominee services are not used to obscure beneficial ownership or facilitate money laundering or terrorist financing. However, it is essential to emphasize that choosing the appropriate mechanism requires more than meeting formal requirements. Countries must be particularly careful when determining which model to implement and how to design it, ensuring full alignment with FATF’s technical definitions of nominator, nominee, nominee director and nominee shareholder. These definitions are not merely conceptual, they provide the necessary foundation to avoid regulatory gaps, ensure coherence, and guarantee that disclosure, registration and control obligations effectively reach the individuals who truly own or control legal persons. Eyra Michelle Perdomo Ballesteros Attorney Private Wealth Law & Corporate Services team Morgan & Morgan Email: [email protected]

Panama, January 7, 2026. Morgan & Morgan advised Banistmo Investment Corporation, S.A. in its role as: (i) trustee of the guarantee trust for financing and (ii) trustee of the trust required under applicable regulations for the Eastern Pan-American Highway Rehabilitation Project. This Project is one of the most important public infrastructure projects currently underway in the Republic of Panama, and the first project in the country developed under the Public-Private Partnership (PPP) model. The financial closing, presented by the PPP Contractor APP Ruta del Este de ISA Vías for an amount exceeding US$281,000,000.00, represents the most important “Project Finance” transaction in the region and an unprecedented achievement for Panama. This milestone confirms that the project has a solid financial structure that ensures its execution and completion and reaffirms the role of the Ministry of Public Works (MOP) as the contracting entity representing the Panamanian State and the main promoter of this mega project, aimed at modernizing and strengthening the national road network—marking a turning point in public infrastructure investment in the country. This mega project, which stretches from the corregimiento of Las Garzas in the district of Panama to Yaviza in Darién, covering 246.2 kilometers, currently shows a physical progress of 9.4%. This progress has been made possible thanks to the coordinated participation of a broad group of international and local banking institutions, as well as specialized financial, technical, and legal advisors, whose involvement provided support and strength to an operation structured under the highest standards of the PPP investment model. Partner Kharla Aizpurua O. and associate Miguel Arias M. advised Banistmo Investment Corporation, S.A. in this transaction. For full details, you can access the complete official press release here.

Panama, December 5, 2025. Morgan & Morgan represented Electron Investment, S.A. (“EISA”) in structuring and negotiating a bridge financing granted by BAC International Bank, Inc., the proceeds of which were used for the early redemption of corporate bonds issued in 2020 through the Latin American Stock Exchange (Latinex). Once the existing bonds were canceled, Morgan & Morgan led the expedited registration process before the Superintendency of the Securities Market for a public offering of corporate bonds of up to US$175,000,000, as well as the placement of the first series of secured bonds, intended to repay the bridge loan and ensure the continuity of the company’s strategic operations. The new secured bonds are backed by a comprehensive security package that includes a guaranty trust, a pledge over shares, mortgages on fixed assets and chattel, unconditional assignment of rights under power purchase agreements, and conditional assignment of material agreements. EISA is a leading Panamanian company in the energy sector, specializing in hydroelectric power generation. It is the developer of the Pando and Monte Lirio hydroelectric projects, located in the upper-middle basin of the Chiriquí Viejo River in the province of Chiriquí. Monte Lirio has an installed capacity of 51.6 MW, while Pando adds an additional installed capacity of 32.6 MW. This complex financing reaffirms EISA’s strength and Morgan & Morgan’s commitment to transactions that promote sustainability and growth in the energy sector. Partner Ana Carolina Castillo, and associates Miguel Arias M., Eduardo Oteiza and Ariana Linares advised EISA in this transaction.

Panama, December 1, 2025. Morgan & Morgan acted as legal counsel to Banco Davivienda Panamá in the successful closing of a landmark transaction involving the integration of Scotiabank Panamá’s operations (The Bank of Nova Scotia) into Banco Davivienda Panamá. This transaction extends beyond Panama, as Scotiabank’s operations in Costa Rica and Colombia will also be integrated into Grupo Davivienda in those countries. It is a transaction of significant regional impact, strengthening the financial position of two leading banking groups in Latin America. The integration across these three markets represents more than $60 billion in assets and a customer base exceeding 29.6 million, positioning the combined entity as one of the largest banking conglomerates in the region. The legal team was led by partner Roberto Vidal, alongside partners Ana Carolina Castillo, Jose Rafael Reyes, and Sophia Lee; senior associate Maria Eugenia Brenes; and associates Ariana Linares, Angélica Ortiz, David Ramos, Katia Pallares, Arantxa Fernandez, and Perla Piña, who played a key role in advising Banco Davivienda Panamá throughout the transaction.     Morgan & Morgan is recognized as Pro Bono Leading Lights 2025. Panama, December 1, 2025. For thirteen consecutive years, Morgan & Morgan has received the “Leading Lights” recognition in Latin America for the firm´s Pro Bono program. Only Morgan & Morgan achieved this status in Panama, sharing honors with leading regional firms. This distinction is granted annually by Latin Lawyer, who, together with the Cyrus R. Vance Center for International Justice, investigates the institutionalization of the practice within the firms and the participation of their legal team. In 2025, Morgan & Morgan reaffirms its commitment to offer legal advice to more than 25 non-for-profit organizations (NGOs), highlighting the advice provided to Banco de Alimentos Panama and Marea Verde, two foundations that play a crucial role in their respective areas of work. Moreover, the firm continues to support adjustments to bills related to the maritime and corporate sector in Panama and provides regular advice to Trust Law, Vance Center, and Red Pro Bono, attending legal research on matters with social impact. We are very proud of the more than 40 lawyers of the firm who participated in this program in 2025, contributing their expertise and time to pro bono legal services.     Morgan & Morgan advised Grupo Estrella on the acquisition of Cemex Panama. Panama, October 3, 2025. Morgan & Morgan acted as legal counsel to Grupo Estrella in the acquisition of Cemex Panama’s assets, a transaction valued at over US$200 million. The deal included the Cemento Bayano plant, located in Calzada Larga, Chilibre, with two integrated production lines, as well as cement, ready-mix concrete, and aggregates operations. Grupo Estrella, an industrial conglomerate headquartered in the Dominican Republic, has maintained a presence in Panama for over 12 years through major infrastructure and energy projects. “We are very pleased to strengthen our presence in Panama and be part of its growth and development. This investment will allow us to offer comprehensive solutions for the local and regional markets,” said Giuseppe Maniscalco, President of Grupo Estrella’s Industrial Division and President of the Board of Directors of Cemento Bayano. Morgan & Morgan worked with a multidisciplinary team for this complex transaction, led by partner Kharla Aizpurúa O., with the support of partners José Rafael Reyes, Milagros Caballero, José Carrizo, and Raúl Bermúdez. The team also included senior associates Mónica Moreno, María Eugenia Brenes, Rodolfo Palma and Allen Candanedo, and associates Eduardo Oteiza, Arantxa Fernández, Katia Pallares, Angélica Ortíz, María Alejandra Rodríguez, Miguel Rodríguez, Yaneth Barrera, and David Ramos.