Hereby we notify our clients that by virtue of Law 18 of April 23, 2015 it has been advanced to May 4, 2015 the enactment of Law No. 47 of August, 2013 (the “Law”), whereby is established the regime for the custody of bearer shares of Panamanian corporations, and also, certain amendments are adopted pertaining to bearer shares.

Basically there exist two scenarios, which we proceed to explain as follows:

• Bearer Share Certificates issued before May 4, 2015

Bearer Share Certificates issued before this date must be replaced by share certificates registered in the owner’s name or delivered to an authorized custodian at the latest on December 31, 2015, along with an affidavit stating the ownership of said shares. Not complying with the above before said deadline, the owner of the bearer shares will not be able to exercise before the corporation the political and economic rights inherent to said shares.

• Bearer Share Certificates issued on or after May 4, 2015

Bearer Share Certificates issued as from this date must be delivered to an authorized custodian within a period of twenty (20) days, counting as from the approval of the issuance of said shares, along with an affidavit stating the ownership of said shares, and within said period, the owner of the bearer shares must prove to the issuing corporation the name and the address of the authorized custodian, as well as the details of a person that the corporation may contact if necessary. Otherwise, the corporation will annul the issuance of the bearer shares. These measures are required as from August 4, 2015.

Independently of the case, the Board of Directors or the Shareholders’ Assembly of the corporation that issue bearer shares, must authorize the corporation to adopt the custody of bearer shares regime referred to in the Law, and to register said authorization in the Public Registry of Panama. Not complying with the above before January 1, 2016, will have the effect that as from said date the Articles of Incorporation of the Corporation will be considered automatically amended by virtue of law, prohibiting the issuance of bearer shares.

Before the enactment of the Law, the options available are the following:

1. To issue shares registered in the owner’s name or to convert the previously issued bearer shares to shares registered in the owner’s name (i.e. to appoint a natural person or legal entity, including a private interest foundation or in favor of a trust); or

2. To deposit the bearer share certificates with an authorized custodian.

We must inform that Quijano & Associates is in the capacity of offering its clients the service of Authorized Custodian, as well as to assist in the drafting of the aforementioned affidavit and the resolution for adopting the immobilization of bearer shares regime.

For any additional query or clarification, please contact us or write to quijano@quijano.com