Project finance in Panama is not regulated by any specific law, but rather by various laws and regulations, including the Civil Code, the Commercial Code, and Law No 129 of 31 December 2013 regarding chattel mortgages, among others.
Typical Financing Sources and Structures for Project Financings
The typical financing sources are banks and multilateral institutions. Nonetheless, various transactions have also been financed through export credit agencies. With respect to project bonds, these are typically used in a take-out or refinancing of a project, and not at a green-field stage.
The Main Issues when Structuring Deals
Generally, there are no restrictions on foreign investment in Panama, except for certain activities in which foreign governments (or government-owned entities) may be limited. There may also be relevant tax treaties that provide for a more favorable tax treatment. Typically, the project companies are corporations (sociedades anónimas), except for situations in which a shareholder of the project company is a US person, in which case, for US tax considerations, the project companies are typically structured as limited liability companies (sociedades de responsabilidad limitada).
Learn more in our Banking & Finance Guide prepared by Partners Arturo Gerbaud, Eloy Alfaro B., and Patricia Cordero – Originally published by Chambers & Partners. https://practiceguides.chambers.com/practice-guides/banking-finance-2021/panama
