The Panamanian Law 52 of October 27, 2016 (the "Law"), which relates to accounting records and the annual franchise tax of Panamanian entities (corporations and foundations), came into effect on 1 January 2017.
Panamanian entities are now under the obligation to keep accounting records and to maintain supporting documentation at the offices of its resident agent in Panama or at any other place within or outside Panama. Where the accounting records and supporting documentation (Records) are maintained at a place other than the offices of the resident agent (RA), the entity shall be under the following obligations:
- to provide written notice to the RA of the physical address where the Records are maintained and the name and contact data of the person maintaining same under his custody;
- inform the resident agent, in writing, of any changes within fifteen working days;
- provide the Records to the resident agent, upon request from the competent authority, within fifteen working days, if not, the resident agent shall be under the obligation to resign.
Failure to comply with the dispositions of the Law shall be sanctioned with a US$1,000 fine, plus US$100 for each additional day that the non-compliance continues and is not remedied.
Copies of the share and shareholders registries of Panama corporations are required to be sent to the resident agent.
The Public Registry shall suspend the corporate rights to any entity that does not pay its franchise tax for a period of three consecutive years - then the entity shall have two years to be revived by paying the reactivation fine and fees. Upon expiration of two years, the Public Registry of Panama shall proceed with the definitive cancellation of the entity.
Please click here for a copy of the Law.
To view the full bulletin please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.