Legal Framework

Law 52 of October 27, 2016 by which the obligation of certain lagal entities to keep accounting records and other provisions for the management and operation of Panamanian corporations is established.


Obligatory accounting and others

  • Legal entities, whose operations are not perfected, carried out or having their effects in the Republic of Panama are required to keep accounting records (as defined in article 4, paragraph 5 of the Law) and supporting documents at the offices of their resident agents in the Republic of Panama, or at any other place in the Republic of Panama or abroad as determined by its adminisrative organs. Records shall be available for up to 5 years after the completion date of the transaction or corporation ceasing to operate.
  •  The resident agent is required to keep a register of the place where legal entities not operating in Panama keep their accounting records, if other than at the resident agent's office. The register shall include:
  1. Name of the legal entity;
  2. Physical address where the accounting records and supporting documents are kept;
  3. Name of the person keeping the accounting records and supporting documents in custody.
  • The resident agent is required to keep a copy of the register of shares and shareholders of corporations for which it acts as such.
  • In cases where the legal entity keeps the accounting records and supporting documents outside Panama, it shall be required to provide the same to the resident agent prior request from competent authority in a term no greater than 15 days.
  • The resident agent is required to resign as such for any legal entity failing to present the accounting records within the term mentioned in the preceding point. No new resident agent may be registered until the causes of the sanction have been cured.

We take this opportunity to inform you that starting on January 2017, our group companies will be in a position to provide from the most basic accounting and reporting services up to any advice on more complex business, tax and accounting operations. We will be sending you a list of services and fees.

Delinquent companies

  • Failure by a legal entity to settle the sole annual tax shall cause the non-recording of any corporate act subject to registration at the Public Registry of Panama and no certification shall be issued for such legal entity.
  • Failure to settle the annual tax for three conscutive years will entail the suspension of the legal entity's corporate rights causing the impossiblility for the entity to start legal actions, do business or dispose of its assets.
  • On registration of the legal entity's suspension at the Public Registry of Panama, it shall have two years to be restored by payment of US $1,000.00. Upon expiration of this term without the entity being restored, the Registry shall proceed its final deregistration.

Delivery of bearer shares to authorized custodian

Bearer shares that have not been given into custody shall by law, forfeit all its political and economic rights. Please contact us if you need a legal solution for this situation.

Executive Decree No. 258 of September 13, 2018, which rules Law 52 of October 27, 2016, which establishes the obligation to maintain accounting records for certain legal entities and states other provisions.

Law 254 of November 11, 2021, which introduces adjustments to laws already in force in matters of international tax transparency, prevention of money laundering, financing of terrorism and the proliferation of weapons of mass destruction.



The main purpose of said Law is to establish the obligation to prepare and submit on an annual basis, the accounting records of your Panamanian legal vehicles to Morgan & Morgan as its resident agent. In addition, it obliges the final beneficiary to provide more financial information to its resident agent about the commercial activities of its legal entity since the latter is obliged, among other things, to carry out periodic monitoring of the commercial and financial operations of the legal entities for whom provides this and other legal services.


Failure to comply with the above obligations will result in a series of administrative sanctions to the legal vehicles (for example, suspension of corporate rights and even forced liquidation) and fines (ranging from US$5,000.00 to US$1,000,000.00). In addition, a series of new obligations and sanctions are imposed on resident agents not provided for in the previous laws that have been modified by Law 254. For example, the resident agent must inform the competent authority, annually, of the legal vehicles that have not sent the accounting records to our offices in Panama.

It is important to note that Law 254 is still pending regulation, that is, there may be changes to the form and presentation of financial and accounting information and sanctions.


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