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Effective 1 January 2017, the Panamanian Government requires Corporate and Foundation Ordinances in the Republic of Panama to maintain accounting records and supporting documentation to comply with Law Number 52 (“Law 52”) passed on 27 October 2016.

Key Obligations

The trust must be registered with the New Zealand Inland Revenue Department within 30 days of establishment (or by 30 June 2017 for existing trusts). The registration requirements include the following:

1. Corporations and foundations incorporated under the laws of the Republic of Panama that do not carry out their operations within the Republic of Panama are now obliged to maintain accounting records and supporting documentation.
2. Accounting records and supporting documentation are to be kept in the offices of the Resident Agent of the entity in the Republic of Panama, or in any other place as determined by the administrative bodies of the entity.
3. In the event that accounting records and supporting documentation are not kept at the Resident Agent’s office, the following information must be provided in writing to the Resident Agent:
   • Physical address where the accounting records and supporting documentation will be kept.
   • Name and contact details of the person that will maintain such records and documents in custody.
4. The Resident Agent must also be informed of any changes to the above information, in writing, no later than 15 working days.
5. Should the accounting records and supporting documentation of the corporation or foundation be kept outside of the Republic of Panama, the documents must be provided to the Resident Agent within 15 days from request by the Inland Revenue Directorate of the Ministry of Economy and Finance. If such requirements are not fulfilled, the Resident Agent will have 10 working days after the entity falls into default to tender its resignation to the Public Registry Office for filing, free of charge.

Any entity that fails to comply with the obligations of Law 52, will be subject to a fine of US$1,000, and an additional US$100 for each day that the contravention continues.

Accounting Records and Supporting Documentation

1. Accounting records refers to clear and precise data detailing the commercial transactions of the entity, which will allow determination of its financial situation, as well as for the preparation of financial statements.
2. Supporting documentation refers to contracts, invoices, receipts and any other document needed to sustain the transactions of the entity.

To find out more about Accounting Services in Panama, please contact: Panama@asiacititrust.com