A law introduced in Panama on 27 October 2016 (Law No. 52) introduces a new obligation for certain entities to maintain accounting records and supporting documentation. Law No, 52, which will apply as from 1 January 2017, also provides for penalties for failure to comply with the rules, including the suspension of a legal entity’s corporate rights.
The public registry will suspend all corporate rights of legal entities that:
- Do not designate a new Panamanian agent within 90 days after the resignation, removal or termination of the prior resident agent;
- Are in delinquent status with respect to the franchise tax for three consecutive years; or
- Are in delinquent status in relation to the payment of a penalty or fine that has been imposed by a competent authority.
Once a legal entity is suspended from the public registry, reactivation cannot be sought for two years. The person requesting the reactivation of the entity must pay a fine of PAB 1,000 and correct the issues that gave rise to the suspension.
If reactivation is not sought for a period of two years after the permissible window for reactivation opens, the public registry will proceed with the permanent cancellation of the legal entity. Once dissolved, the legal entity must follow the proceedings required for liquidation.
News reference from Deloitte News “New law imposes accounting record obligations on offshore legal entities”.
Once the company has been finally dissolved, it cannot be reactivated again. If for any reason you have inactive Panama companies under your portfolio that you might be interested in reactivating please get in contact with us to provide assistance.