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.

PATTON, MORENO & ASVAT