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FAQ – Accounting Records in Panama

1. Is my Resident Agent required to prepare my Accounting Records?

No. The Resident Agent is only responsible for safekeeping the Accounting Records, whether originals or copies, and for maintaining their confidentiality, unless required by a competent authority. The Accounting Records must be prepared by a qualified accounting professional who is competent in the field and able to provide proper guidance. In the case of Sworn Declarations, these must be prepared by members of the Board of Directors, the Foundation Council, or the ultimate beneficial owners of the legal entity, as they are the ones who best understand the entity’s activity.

No. Accounting Records must be submitted to the Resident Agent of the legal entity each year by April 30.

Yes. The obligation to submit Accounting Records is based on the jurisdiction of the entity, not the nationality of its directors, shareholders, or beneficial owners. If your entity is incorporated in Panama and meets the conditions of being non-operational, a passive holding company, or operating abroad, this obligation applies to you.

No. While it is recommended that Accounting Records for operating entities be prepared by a qualified accountant capable of accurately reflecting the financial situation of the company, the accountant does not need to be Panamanian. However, it is advisable that the accountant is familiar with Panamanian accounting standards. According to Decree No. 177 of 2024, which regulates Law 254 of 2021, both Sworn Declarations and Financial Statements submitted to the Resident Agent in compliance with the Accounting Records obligation must be signed by:
– A member of the Board of Directors or Foundation Council (as applicable),
– The ultimate beneficial owner, or
– A duly authorized individual by means of a notarized power of attorney.

If the beneficial owner is Panamanian, a Sworn Declaration may be submitted indicating that the entity is a holding company and that its beneficial owner is Panamanian.
We provide a template for this type of declaration at the following link:
Model Sworn Declaration for Panamanian Beneficial Owners (PDF)
If the beneficial owner is a foreign national, the Law requires the submission of Financial Statements. We recommend consulting with your trusted accountant to reflect:
– The current book value of the asset, and
– The annual expenses generated by the property (e.g., utilities, maintenance).
With this information, a Statement of Equity for the entity may be prepared.

This type of declaration may be submitted regardless of whether the beneficial owner is Panamanian or foreign.

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