Obligation to keep accounting records
In accordance with law 52 of October 2016, it is now mandatory to keep accounting records and supporting documentation for any legal entity that does not perform any operations that are perfected, executed or that take effect within the Republic of Panama.
According to our law any legal entity (company or foundations) that does not conduct operations that are perfected, executed or take effect within the Republic of Panama have now the obligation to keep accounting records and supporting documentation.
The above-mentioned law; No. 52 of 2016, was regulated in 2018 by Executive Decree No.258 and clarifies how these records should be kept.
Companies used only for asset holding (that do not engage in acts of commerce).
In this case, they should only provide information that demonstrates the value of the assets and its incomes; when formally required by a Panamanian authority (the Panama authority would request them to us as Resident Agent and we would request them to you).
Companies that do engage in acts of commerce.
In this case, the above regulation indicates that companies can keep its accounting records and supporting documentation within or outside the Republic of Panama, either through books or electronic media or technology, however, the accounting records must be carried out according to International Financial Reporting Standards (IFRS), and in the event that are formally required by a Panamanian authority, they must be endorsed by a public accountant (CPA), from the country where such records are kept (the Panama authority would request them to us as Resident Agent and we would request them to you).
The client must inform us, as Resident Agent of the company or foundation, the information of the contact person that keeps the accounting records and the address where they are kept. This information shall be supplied by means of our due-diligence form required for each corporation or foundation.
Do not hesitate in contact us for any questions regarding the above-mentioned law requirements.