Is it safe to buy a Panamanian corporation’s shares which hold title to property in Panama?
With a proper title search and a meticulous due diligence done on the corporation that holds the property – yes it is generally safe. You need to hire a qualified attorney to carry out the due diligence and incorporate proper clauses in the Buy/Sell Contract of Shares. These clauses must include: 1) Guarantee to the buyer by the corporation of being free from all debts and liabilities (less those mentioned in the contract) and indemnification of the buyer from such liabilities. 2) Responsibility of the seller in case of any liability resulting from previous actions. 3) Guarantee by the corporation that purchase is 100% for both the shares and properties mentioned and described in the contract. This means that the buyer is owner of corporation’s share and the corporation is the owner of the titled property. Provided above clauses are inserted in the contract papers, Panamanian Laws would continue to safeguard buying of shares by a foreigner.
