The Panamanian Government has enacted Law number 52 dated October 27th, 2016 (hereinafter identified as "Law 52"). The law states that the non-payment of the legal entity's annual tax within the corresponding period will cause the non-registration of any document in the Panama Public Registry and the non-issuance of any certification relating thereto.

Accordingly, the Panama Public Registry will suspend the legal entity's corporate rights when it has not completed the payment of its annual tax for a period of three (3) consecutive years or if it has not paid the fines or sanctions that have been applied. Once the suspension of the corporate rights is registered in the Panama Public Registry the legal entity may not:
a) Initiate legal processes,

b) carry out businesses or dispose of its assets;

c) Present claims or exercise any right;

d) Perform any binding corporate act;

Nonetheless, when corporate rights have been suspended, it may:

a) Present a request for its reactivation;

b) Continue with its defense in those processes initiated against it; and

c) Continue with the legal procedures initiated before the suspension date.

Once the suspension is registered the legal entity may be reactivated within 2 years. If the periods expires without any reactivation, the Panama Public Registry will cancel the legal entity registration definitively. In this case, the entity is deemed dissolved.