According to Panamanian law, it is mandatory for every company to have a resident agent.
The resident agent in Panama is responsible for informing the offshore company about its annual obligations. Additionally, they are authorized to pay the annual corporate tax on behalf of the company. Another role of the resident agent is to be held responsible for the actions carried out by the offshore company outside of Panama.
However, it is important to note that resident agents in Panama are limited in certain aspects. They cannot participate in the internal decision-making processes of the offshore company or foundation. This responsibility solely lies with the directors, shareholders, or authorized representatives. The resident agent is also not permitted to assume obligations on behalf of the represented offshore company.
Who can be resident agents in Panama?
To become a resident agent in Panama, it is essential to be a lawyer, hold Panamanian citizenship, and reside in the country. Their name and mailing address will be recorded in the articles of incorporation of the offshore company. By law, the resident agent must now conduct due diligence on their client. In the event of receiving a notification from a competent authority, the resident agent must share their client's information. This supports the authorities in preventing money laundering, financing terrorism, and the proliferation of weapons of mass destruction.
The Non-Financial Subjects Superintendence is the entity responsible for supervising the work of resident agents in Panama. According to Executive Decree No. 13 of March 25, 2022, resident agents are obliged to report to this Superintendence who the ultimate beneficiaries are for each legal entity they represent.
Furthermore, according to Law 254 of November 11, 2021, resident agents in Panama are required to maintain the accounting records of each legal entity they administer. The filed records must cover the past five years. These records will be kept in the office of the resident agent or any other location, within or outside the country, always with the support of the management bodies of that legal entity.
Documents that the resident agent must receive annually from their clients:
Every year, the resident agent must request updated information from shareholders or ultimate beneficiaries of an offshore company or private interest foundation. The documents to be received include:
- Copy of the passport of the ultimate beneficiary.
- Accounting records of the company or foundation incorporated in Panama. These records should include all transactions carried out and the assets of the company.
- Summary containing the activities of the offshore company, its main clients and suppliers, and the countries where it conducts business activities.
Accounting for Panama offshore companies
Accounting was already mandatory before, but there was no obligation to submit it. With the new Law 624 of 2021, accounting must be submitted to the Resident Agent (us) every year. Therefore, to keep your company active, you will have to prepare the annual accounting, even if there are no operations, and indicate in that accounting if you hold bank accounts or properties. For more information, please watch the video.
Companies that have been registered for more than 5 years will need to submit, for the first time, the last 5 years of accounting. If the company has been registered for 4 years, then the last 4 years of accounting should be submitted, and so on.
It is not necessary for the accounting to be prepared by an accountant.
This update must be submitted before end of March, each year. If you are unable to meet the deadline, you must communicate this. If you are not using the company or foundation and do not wish to keep it active, you must also communicate this.
What happens if you do not comply with these requirements?
It should be noted that this data is not public and cannot be used by authorities without a court order. If you fail to comply, we are obligated to resign as the Resident Agent, which means that your company or foundation will be made inactive by the Public Registry and subsequently suspended. In this case, if you wish to reactivate it, it will cost you USD 2000 plus fines, surcharges, fees, and outstanding Resident Agent fees.
