Law N° 52 dated on October 27th 2016 – About Accounting Records
The Panamanian Government has enacted Law number 52 dated October 27th 2016 (hereinafter identified as “Law 52”), requiring companies and private interest foundations; that do not carry out operations to be completed or that will not have effects in the Republic of Panama, to keep accounting records and maintain documents confirming their operation and activities as of January 1st 2017.
The new legislation defines the “accounting records” as the information that clearly and precisely states the legal entities’ commercial operations, assets, passives and their patrimony, allowing the validation of their financial status as well as the preparation of financial statements for said legal entities.
The “support documentation” confirming their operation and activities include the contracts, titles, statements of account, invoices, receipts or any other document that validates the transactions and operations executed by a legal entity.
The accounting records and support documentation must be kept and be available in the legal entity’s file for a period of five (5) years, counted as of the last day of the calendar year on which the transactions or operations were executed or as of the last day of the calendar year on which the legal entity ceases its operations.
The accounting records and support documentation may be kept at the legal entity’s Registered Agent’s office in the Republic of Panama or in any other place deemed advisable by its corporate organs be it in the Republic of Panama or abroad.
Concerning those cases in which these documents are kept in places other than the Registered Agent’s office, the legal entities are obliged to provide the following information in writing to their Registered Agent:
- The physical address where the accounting records and support documentation are kept.
- The name and contact information of the person in charge of keeping these documents in custody.
The legal entities must confirm their Registered Agent in writing any change of address, of the contact person or contact details concerning their accounting records and support documentation, within a period of fifteen (15) labor days, counted as of the date on which these changes were approved.
If the legal entity maintains its accounting records and support documentation outside of the Republic of Panama, it is obliged to provide them to its Registered Agent following the request received from a competent authority in the Republic of Panama, within a period of fifteen (15) labor days, counted as of the date on which the request of this information is notified to the Registered Agent.
In the event the legal entity does not provide the accounting records and the support documentation to the Registered Agent within the above mentioned period, the Registered Agent is obliged to present its resignation and stop acting as the entity’s Registered Agent.
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