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M&A - Restrictions in the Transfer of Shares

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Are there any restrictions under corporate law on the transfer of shares in a private company? Are there any restrictions on acquisitions by foreign buyers?

Restrictions on share transfer

The Corporations Law allows a company's articles of incorporation to contain provisions restricting the transfer of its shares, but any restriction that absolutely prohibits the transfer of shares is null. Rights of first refusal are frequently included in the articles of incorporation. Some regulated activities in certain sectors impose special requirements on shareholders, and therefore restrict the transfer of shares to parties that do not meet the requirements.

Foreign ownership restrictions

The Corporations Law does not restrict the foreign ownership of shares. However, under the National Constitution of Panama, retail sales can only be undertaken by Panamanian nationals. Panama aviation laws require at least 51% of the shares of Panamanian air carriers to be held by Panamanian nationals. Professional activities, including the practice of law, engineering and architecture, are also restricted to Panamanian nationals.

Private mergers and acquisitions in Panama – María de Lourdes Marengo ( | Nadya Price (

PATTON MORENO & ASVAT, the experienced legal guidance you can trust.

- An extract of the Private Mergers & Acquisitions Guide, originally published by Thomson Reuters


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