Panama law enters into force on January 1st 2017 the obligation for maintaining accounting records for legal entities that do not perform operations that are consummated, perfected or take effect within the Republic of Panama.
Accounting records are the information that indicate in a precise way the commercial operations of the legal entities; liabilities, assets, and equity, which would allow to determine the financial situation of the entity. They also include documentation to prove asset ownership for creation of liabilities, equity and proof of monetary and non-monetary transactions to determine the financial situation of the entity. The type of accounting record to be kept by the entity shall depend on the type of activities and transaction in which the legal entity engages in.
Accounting records and other related documents shall be made available for a period of no less than five years. This information must be kept in the offices of the legal entity’s resident agent or in any other place as determined by its management. In case that the information is not maintained in the offices of the resident agent, the Physical address where the accounting records and supporting documentation are being held; name and contact information of the person that maintains the records under their custody, must be provided in writing.
Consequently, the resident agent shall be informed of any change in the physical address or contact information within a period of no more than 15 business days from the day in which the change was effected. In case that a legal entity does not fulfil its obligations in relation to the accounting records, a penalty of USD$1,000 and additionally USD$100 for each day it continues not complying with the legislation.
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