Accounting records in Panama Obligation to deliver to resident agents
Since 2016, Panamanian law has regulated, for legal entities (corporations, limited liability companies and private interest foundations), the obligation to keep accounting records and maintain supporting documentation for a minimum period of 5 years (Law 52 of 2016).
Recently, said law was amended by Law 254 of November 11, 2021, which regulated additional requirements related to the accounting records of legal entities incorporated in Panama. The most relevant aspects of said amendment are set forth below:
1. The obligation is created that the accounting records of Panamanian juridical persons be delivered annually to the resident agent, no later than April 30 of each year.
2. These accounting records shall have as closing date December 31 of the immediately preceding year. In this sense, the closing records as of December 31, 2021, must be delivered no later than April 30, 2022.
3. The records must be delivered in original or copy for the custody of the resident agent, who must keep them confidential.
4. It is important to specify that the information to be submitted is determined by the type of activity of the legal entity, as follows:
- Legal persons engaged exclusively in holding assets, such as real estate, shares, participation quotas, bank accounts and/or investment accounts, among others, must deliver as accounting records documents reflecting the value of the assets, the income generated by such assets and the liabilities related to such assets.
- Legal entities that carry out commercial acts outside the Republic of Panama must submit a daily book and a general ledger.
- On the other hand, juridical persons engaged in the purchase and sale of public or private debt and securities, for profit in their resale or by any other means of mercantile speculation, must submit the custodian's statement of account or the balance sheet of the juridical person.
5. In cases where the original accounting records are kept outside the offices of the resident agent, the legal entity is required to inform, annually and in writing, the resident agent of the name and contact details of the person who keeps the original accounting records and supporting documentation in its custody, as well as the physical address where they are kept.
6. Failure to comply with these obligations could result in the following penalties for the legal entity:
- Fines of US$5,000 to US$1,000,000.
- Suspension of the corporate rights of the legal entity.
- The impossibility to register any type of document in the Public Registry and to obtain certificates issued by said Registry.
In addition, the resident agent is obliged to relinquish its capacity as such, with respect to the legal entity that fails to comply with this obligation
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