Improvements in Panama Corporation Law for Redomiciliation

Decree Law 5 of 1997 included several improvements for the redomiciliation and powers of attorney for corporations which are still useful today

Improvements in Panama Corporation Law for Redomiciliation 

Decree Law 5 of 1997 has been enacted by the Executive Branch which contains changes to the Commercial Code (C.C.) and Law 1 of 1984 on Trusts. The new legislation has provisions which allow more flexible procedures and records for Panamanian companies and trusts. 

Redomiciliation in Panama:

The Decree Law adds provis ions to Article 11 of the Commercial Code for redomiciliation. Foreign corporations seeking to be chartered under Panama Law are required to record in the Panama's Public Registry:

1- a certificate of good standing from the jurisdiction of origin, 

2- legalized copy of the minutes of the meeting approving the redomiciliation

3- Articles of Incorporation with amendments conforming to Panama Law. 

The documents must be authenticated with Apostille or by Panama Consul. Once recorded in Panama, the continuation of the corporation under the laws of Panama shall have effects between the parties or before third parties from the date of its initial incorporation in the country of origin. The corporation will continue as owner and holder of all assets, rights and licences, despite the redomiciliation. The recording can also be conditionally conducted in Panama, having definite redomiciliation subject to the eventual recordation of the redomiciliation orders by its attorney-in-fact. 

Redomiciliation out of Panama:

Panamanian corporations are now allowed to continue under the laws of another country and redomiciliate abroad, as long as the corporation has no outstanding corporate franchise flat taxes. This is conducted by recording in Panama the corresponding corporate agreement to redomiciliate and the certificate of good standing from the new jurisdiction