Due Diligence Requirements
Overview of the information and documentation typically required to comply with due diligence obligations in Panama.
Panama’s due diligence framework requires resident agents to maintain updated information and supporting documentation for each client and each legal entity under their administration.
These obligations form part of Panama’s compliance and transparency framework, including Law 254 of 2021 and Executive Decree No. 177 of December 2024.
Key definitions:
- Obligated subjects: Persons or entities subject to supervision under Panama’s non-financial regulatory framework, including law firms acting as resident agents.
- Legal entity: The company or private interest foundation.
- Resident Agent: The lawyer or law firm legally appointed to act for the entity in Panama and maintain the required due diligence records.
Due diligence obligations
Before establishing a client relationship, clients must provide the following information and documentation and keep it current.
Adequate identification.
Resident agents must identify the client and beneficial owner, verify the information received, and keep the due diligence record updated. The level of review depends on the client profile, the services involved, and the relevant jurisdictions.
Know the nature of the client’s business.
Resident agents must obtain sufficient information to understand the client’s professional or business activity and record that information at the outset of the relationship.
Risk assessment and profile.
Resident agents must assess the risks linked to the client, the relevant jurisdictions, and the services or transactions involved. Depending on the level of risk identified, additional information and supporting documentation may be required regarding the client’s financial and transactional profile.
Ongoing monitoring.
Obligated subjects must review due diligence records periodically and confirm that client activity remains consistent with the client’s business or professional activity and financial or transactional profile.
Sanctions
Failure to provide the required information or documentation may result in sanctions.
Depending on the case, these measures may include suspension of corporate rights, monetary penalties, or, in serious cases, forced liquidation through the Public Registry of Panama. Liability may also extend to third parties that contribute to the non-compliance.
For any questions regarding the due diligence requirements applicable to your company or foundation in Panama, please contact our team.
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