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Project Finance: Security taken over shares

Can security be taken over shares in companies incorporated in Panama? Are the shares in certificated form?

Under Panamanian law, any individual or legal entity, whether national or foreign, can own and pledge shares held in Panamanian corporate vehicles. A pledge of shares of a Panamanian company may be governed by laws other than those of Panama, and a court in Panama would enforce terms in accordance with the laws of the corresponding jurisdiction, unless these are in contravention of Panamanian public policy.

A pledge of shares must be agreed in writing. Minimum requirements for its validity include:

  • Delivery of the corresponding share certificate(s) to the pledgee or to an agreed third party.

  • The parties must agree the method to be used to determine the value of shares to ensure fair value against the debt. In the absence of such an agreement, the shares would be appraised by two experts named by each of the parties, or a third one appointed by these two in the case of disagreement, or by judicial authority in the absence of experts.

Registration of the share pledge is not necessary but annotation in the Stock Registry of the company is advisable.

Shares of Panamanian companies may be issued in nominative and bearer form. Law 47 of 6 August 2013 adopted a regime for the custody of bearer share certificates, which provides that if the company issues bearer shares, these must be placed in the custody of an authorised custodian.

Any legal entity that has obtained a concession or has been awarded a public bid by the government must have 100% of its shares issued in registered form.

Project Finance in Panama – Key contacts:

María de Lourdes Marengo ( | Nadya Price (


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