Morgan & Morgan and 3 lawyers of the firm are nominated in the first edition of the Latin American Energy and Infrastructure Awards, an event organized by the Iberian Legal Group and its publication The Latin American Lawyer, with the aim to recognize the excellence and achievements of professionals in the energy and infrastructure sector in the region.
The nominations include the following categories:
Morgan & Morgan is characterized by its participation as legal advisors in the most important infrastructure projects in the country. The mining project Cobre Panama, the Panama Metro system, the hydroelectric power plant Changuinola I, the country’s first wind farm, among others; are just a few in which our team of lawyers has participated in all phases from its development to its financing.
The awards gala will take place on October 24 in Mexico City.
In order to comply with the international guidelines regarding corporate transparency, the government of Panama enacted Law 52 of October 27, 2016 in the Official Gazette, which establishes the obligation for Panamanian companies and other entities to maintain accounting records, financial records and supporting documentation of all transactions that took place during the last five (5) years, so that their financial status can be easily determined with reasonable accuracy.
The corresponding records and documentation should be sufficient to demonstrate and evidence the transactions executed by the company accurately.
To whom does this Law apply?
Law 52 was regulated by Executive Decree No. 258 of September 13, 2018 and is applicable to legal entities that do not carry out operations to be completed or that will not have effects within the Republic of Panama.
Legal Entities are any corporation, limited liability companies, any other legal entity for commercial purposes and private interest foundation, incorporated and in force in accordance with the laws of the Republic of Panama
Regulations established in the Law
Accounting records must be held by the Resident Agent; otherwise, the clients are obliged to provide to the Resident Agent the physical address where they are held and the name and contact information of the person in charge of keeping these documents in custody. Additionally, if there is a change of address for any reason, the client must inform the Resident Agent of the new address within the next fifteen (15) days.
If the information is not kept by the Resident Agent, it must be delivered to it within the next fifteen (15) days counted as of the date on which this information is requested.
Additionally, Resident Agents are required to keep a copy of the records of shares and shareholders of the companies under their administration.
The Resident Agent will be obliged to resign as such in the event that the legal entity fail to provide the accounting records within the aforementioned period of fifteen (15) days, a new Resident Agent may not be registered until the grounds that gave rise to the sanction are remedied.
Such information regarding where the accounting records are held are relevant to Article 5 of Law 52, as:
The physical address where the accounting records are held and the name of the person who keeps the accounting records and supporting documentation.
The records must be prepared and endorsed by a Certified Public Accountant of the Republic of Panama.
Legal entities that fail to comply with the obligations established in Law 52 will be subject by the competent authorities to a fine of $1,000.00 and a penalty of $100.00 for each day of noncompliance.
Karla Pinilla, CPA
Morgan & Morgan
Morgan & Morgan provided pro bono tax advice to Camara de Reciclaje de Panamá, Asociacion Marea Verde, Enseña por Panama y Fundación Banco de Alimentos
Panama, August 6, 2019. The Recycling Chamber of Panama, the Marea Verde Association, Enseña por Panama and the Food Bank Foundation, were authorized to obtain the Resolution of the General Directorate of Revenues (DGI for its initials in Spanish) that approves these organizations to receive donations deductible from income tax.
Angélica Ortiz, Taxation Department, Morgan & Morgan
Law 37 of June 5, 2018, adds line 9 to article 709 of the Fiscal Code, which is related to the annual income tax deductions to which natural persons are entitled, regarding school expenses incurred by the taxpayer with respect to their dependents. Additionally, Executive Decree 368 of December 26, 2018 and Resolution No. 201-1635 of May 13, 2019, establish the regulations applicable to the deduction of said expenses.
From the regulations indicated above, we highlight the following aspects:
- School expenses, including tuition and school fees, supplies, uniforms and school transportation, incurred by taxpayers with respect to their minor dependents, will be deductible from the taxable income.
- School expenses related to the payment of tuition and credit hours incurred by taxpayers with respect to their dependents of legal age who are still under their tutelage, attending third-level or higher education.
- The deduction may be up to a maximum annual amount of B/.3,600.00, for each dependent; and may also be applied to taxpayers who pay for their own studies, as long as they submit their tax return declaration.
- Employees who pay Income Tax, in order to make the deduction, must: i) submit an affidavit of the fiscal period in which they incurred those expenses and ii) submit a petition requesting the deduction, duly accompanied by the detail of school expenses and supporting documentation (invoices).
- Invoices or equivalent documents supporting the school expenses to be deductible must be issued in the name of the father, mother or the person who has legal tutelage of the student. They may also be issued in the name of the dependent.
- The deduction of school expenses will be recognized only for payments made in the Panamanian territory.
- The financial obligation of parents with their children of legal age will be until they reach 25 years-old.
- Taxpayers whose dependants have a level of disability but that does not prevent them from attending an educational or university center will be entitled to the deduction of all school expenses.
- School expenses will be deductible in the tax return declaration of the year 2019, and be settled in the year 2020.
Panama, July 3, 2019. For the sixth consecutive year, Morgan & Morgan has received the “Leading Lights” recognition in Latin America for the Pro Bono program that the firm executes.
This distinction was granted by the publication Latin Lawyer, who together with the Cyrus R. Vance Center for International Justice conducted an annual survey with regards to institutionalization of the practice, high standards in this area and active participation of the lawyers. Only two Panamanian firms managed to achieve this recognition, sharing honors with others of very high caliber across the region.
“There are more than 20 NGOs who the firm assists on legal matters related to: corporate services, labor and tax procedures, among other areas of law. This allows these organizations to focus on the development of their own activities and at the same time receive training in areas where they are not experts”, said Camila De Vengoechea, coordinator of the program within the firm.
More on the Pro Bono program
Among the achievements of Morgan & Morgan in the execution of the Pro Bono program, are the support in the drafting of bills such as: Law regulating the activities of volunteer work in the Republic of Panama, Law creating the Food Bank of Panama, Law that creates the Central Blood Bank, Law that creates the Recycling Chamber of Panama, Law that creates the Board of Trustees of the National Theater of Panama and the Law that creates the Board of Trustees of the Reina Torre de Araúz Museum.
Executive Decree No. 238 of June 10, 2019
REQUIREMENTS TO APPLY FOR PERMANENT RESIDENCY FOR EXECUTIVES OF MULTINATIONAL HEADQUARTERS OFFICES (“SEM” for its acronym in Spanish).
As of June 11th, 2019, the requirements to apply for the Permanent Resident Permit for Executives of SEM companies who i) continue working at a SEM company, and ii) no longer work for a SEM company.Read more
Executive Decree No. 249 of June 10, 2019
PROCEDURE AND REQUIREMENTS TO APPLY FOR PERMANENT RESIDENCY FOR FOREIGNERS WHO HAVE OBTAINED RENEWAL OF THEIR PROVISIONAL RESIDENCE PERMITS OF 10 YEARS AND 6 YEARS ARE ESTABLISHED.
As of June 13th 2019, the date on which this Executive Decree became effective, the procedure and requirements for applying to the Permanent Residency for foreigners who have obtained their 10 or 6-year Provisional Residence Permits are established.Read more
Executive Decree No. 237 of June 10, 2019
EXECUTIVE DECREE NO. 182 OF MAY 28th 2019, THROUGH WHICH THE TEMPORARY RESIDENCE PERMIT AS EMPLOYEE OF AVIATION COMPANIES WAS CREATED, IS MODIFIED.
As of June 11th 2019, the current Executive Decree for the Subcategory of Temporary Resident as Employee of Aviation Companies located in the Republic of Panama, is modified.Read more
In this edition of Chambers & Partners, the securities team of Morgan & Morgan summarized the key aspects and developments in Panama, where the activity in the securities sector has been performed in recent years as an alternative form of financing.
The guide is available here
As of May 28th, 2019, five (5) Executive Decrees were enacted to modify rules related to the granting of residence and work permits. The main changes are the following:
NATIONAL IMMIGRATION AUTHORITY.
- Stay Visa for citizens of the United States of America:
A new category of Stay Visa is created for citizens of the United States of America, for reasons of studies, investment, temporary or technical work, or labor transfer. It will be granted for a term of one (1) year, extendable annually up to five (5) more times.
- Temporary Resident as Employee of Aviation Companies:
The category of Temporary Resident is modified for Employees of Aviation Companies based in the Republic of Panama, who will be granted a residence permit for two (2) years, extendable for the same term, until completing a total period of six (6) years.
MINISTRY OF LABOR
- Work Permit for Permanent Residents:
A new category of work permit is created for permanent residents, which will be granted for a term of three (3) years, extendable for the same term.
- Work Permit for Foreigners married to a national:
It will be now granted for two (2) years the first time and the extension for three (3) years each time. Previously, it was granted for a term of one (1) year, extendable for one (1) year each time.
- Work Permit for Foreigners, within ten percent of the ordinary personnel:
It will now be granted for a term of two (2) years, extendable for the same time. Previously it was granted for a term of one (1) year, extendable for one (1) year each time.
- Work Permit for Expert or Technicians, within fifteen percent of the specialized personnel:
It will now be granted for a term of two (2) years, extendable for the same time. Previously, it was granted for a term of one (1) year, extendable for one (1) year each time until completing five years.
- Work Permit Marrakech Agreement:
The minimum number of workers that a company must have of less than ten (10) workers is established. The company must have a minimum of three (3) Panamanian workers and may only have as a foreigner the worker applying for the work permit.
- Work Permit for Professional Foreigner:
It will now be granted the term of two (2) years, the first time, and the extensions for three (3) years each time. You can apply for this work permit with a temporary ID card; that is, even by not having the resolution of approval of residence permit.
In the year 2000, the United Nations General Assembly designated April 26 as World Intellectual Property Day. The purpose of this is to highlight the role that intellectual property rights play in encouraging innovation and creativity.
Across the globe, and at the initiative of the World Intellectual Property Organization (WIPO), there is a campaign every year to attract public interest to issues related to Intellectual Property. In 2019, the World IP Day Celebration takes the name “Reach for Gold: IP and Sports” and looks closely at the world of sports and how innovation, creativity and IP rights support the development of this industry around the globe.
Within the framework of this celebration, two activities will take place in our country. WIPO, the General Directorate of the Registry of Industrial Property (DIGERPI), the World Customs Organization (WCO), the Patent and Trademark Office of the United States of America (USPTO), the Spanish Patent and Trademark Office (OEPM) and the Inter-American Association of Intellectual Property (ASIPI) have prepared a sub-regional Seminar on the enforcement of Intellectual Property (IP) rights for the agencies responsible for enforcing said laws. This Seminar aims to promote the importance of monitoring intellectual property rights in the trade of goods.
On the other hand, the University of Panama organizes an initiative that consists of the creation of a space for academic, scientific and cultural innovation of great impact to develop the topic of IP and sports. This activity will be aimed at making the general public aware of the importance of Intellectual Property Law in trademark registration and how it promotes the development of different economic sectors.
Intellectual Property, tech and the legal sector
On January 31, 2019, WIPO published its first study on “technology trends”, focusing on artificial intelligence (AI) and where there is already a marked growth in the number of applications for patents related to the technology sector. It is a reality that there is already a great variety of products that will change our lifestyle, better to say, that they are already changing it, for example “bitcoins”, and the “internet of things” (IoT), where you can see a clear example of where the world is heading to in relation to mass consumption through technological means. All this leads us to suppose that, although the majority of patents in the world come from industrialized countries, in Panama and in the rest of Latin America, we must be prepared for the demand for services that this sector could bring in the immediate future.
In the legal sector, the replacement of attorneys by artificial technology that provides “legal advice” is already a reality that aims to displace human intelligence with AI, but what is the result of these advances? We will have to wait and see, since the variables of a case cannot be considered by artificial intelligence, this without mentioning the emotional intelligence that should be key in any legal advice, especially in countries of our region.
Benefits of our IP legislation and situation with China
Our country has a highly developed legislation for the protection of Intellectual Rights in general, including trademarks, patents, industrial models, plant varieties and copyrights. Our laws allow the effective protection of intellectual rights by their legitimate owners and for their exclusive use.
Latin America is a very attractive market for producers in Asia (China, Japan and Korea), North America and Europe, whose products land in Latin American markets. Most of these products transit through the Panama Canal, Panamanian ports or the Colon Free Zone. Therefore, whether you plan to protect a brand, register it in Panama for later use in the country or region, or because Panama is the gateway to the rest of the emerging markets in Latin America, Panama should always be on the list of countries that register and use a brand.
In the special case of China, our country and the Asian giant held a fifth round of negotiations of the Free Trade Agreement (FTA) from April 24 to 26, 2019 in Beijing (China). This round consists of the chapters on financial services, market access and customs procedures. The Intellectual Property chapters were proposed and negotiated by Panama and they were already approved by both parties in the Fourth Round of negotiations in 2018. For this chapter, the negotiations made by Panama with the European Free Trade Association (EFTA) have been used as a basis; and the most important regarding the negotiation with China is that Panama fully complies with all the articles proposed in said negotiation and does not need to update its legislation which, in other words, is one of the most complete in the region, especially in matters of border protection against piracy.