Accountants in Panama

Accountants in Panama

How Topaz Services can assist you with your business and assets

When doing international business or considering succession planning, the more prudent business person pays thought as to what is the most effective asset protection strategy. It is commonly held that one of the most effective strategies for asset protection involves relocating business and assets offshore, as this strategy can offer tax efficiencies and ring-fence your assets.

One of the most advantageous global offshore jurisdictions is Panama, with frequently used asset protection vehicles being those of the Panamanian corporation and the Panamanian Foundation.

Important to note that, despite all the negative press that has been reported over recent years which has led many to believe that “tax havens” such as Panama are unethical, moving your assets and business affairs to offshore jurisdictions is perfectly legal and a great method to protect your assets and manage your wealth.

In our website, you can access our library of resources which contains articles that describe the many benefits to be taken from forming a Panamanian corporation and a Panamanian foundation. However, this article will focus more on the accounting framework in Panama, the statutory accounting requirements for your legal entity in Panama, as well as the services we offer that can assist you with your local obligations when moving your assets offshore to Panama.

Overview of the legal framework for accountancy and auditing in Panama

In Panama, Law 57 of 1978, amended by Law 280 of 2021 for the Accounting Profession, enables the Technical Board of Accounting which is an agency under the Ministry of Commerce and Industries, to set the standards for accounting and auditing.

Since 2006, Law 6 of 2005 mandates that all small and medium sized corporations (SME´s) must prepare their accounts according to International Financial Reporting Standards (IFRS). Panama is a registered member of the IFRS, which is an organisation that helps to promote and enforce transparent and globally accepted accounting standards. Panama´s membership in this organisation is part of their effort to eradicate illicit money laundering activities and an indication of its commitment to promoting fair and trustworthy international business. Preparation of accounts to IFRS standards are also required by SME´s for tax purposes by the Panamanian tax authorities as per the Tax Code of 1956.

In respect of auditing, there are no requirements for the formal delivery of financial statements to the Panamanian authorities with the exception, as dictated by the tax code of 1956, of the requirement to conduct mandatory statutory audits by corporations that meet the following criteria;

a. Capital exceeding PAB$100,000, or
b. Annual sales or gross income exceeding PAB$50,000.

In the event that a company must have its financial statements audited, the audit must follow the audit standards adopted by Panama and be conducted by a Panamanian Certified Public Accountant (CPA). Additionally, the annual income tax return must be countersigned by a CPA.
In terms of corporate transparency, Law 52 of 2016, amended by Law 254 of 2021, introduced requirements for the holding of accounting records for Panamanian entities including whom is appointed as holder of accounting records and provision of supporting documentation. This recent development is explored in more detail in our other articles on this topic.

What are the advantages to be gained by engaging a local accountant in Panama?

When holding a Panamanian corporation or Panamanian foundation, it is highly recommended for a business owner to engage the services of a local accountant to attend to the entity´s local administrational obligations. This can also extend to those who have a corporation in another offshore jurisdiction, where accounting requirements are similar to those required by Panama.

Our team of Certified Public Accountants in Panama can assist business owners on a variety of matters to ensure that the business observes the local procedures. This can only improve the company´s overall functioning and there are other benefits that can be taken, which include;

  • Local knowledge of the systems
    For a non-resident or non-native Spanish speaker, navigating the legal and tax systems in Panama for your entity is highly challenging. With the assistance of a local accountant this time consuming, and potentially frustrating, task is taken care of by a professional.
  • Confidentiality
    By keeping the accounting records in Panama, the business owner is isolating the financial data to just one jurisdiction. The requirement for protection of privacy and confidentiality in Panama is statutory by law, and is a key reason why business owners form offshore structures in Panama.
  • Time
    With the engagement of a professional accountant, the task of taking care of the mundane administrational and reporting requirements is covered, leaving a business owner more time to focus on other important matters such as business growth, operations and marketing or, for those who have their offshore structure in place solely for succession planning purposes, more time for their own personal affairs.

How can Topaz Services assist?

Topaz Services, S.A., has a full suite of services available, such as banking and business start-up assistance, and embracing corporate administration, succession planning as well as accounting and local tax guidance.

Our accounting and tax services include the following;

Our services are according to the International Financial Reporting Standards and local tax regulations in Panama, so you can have peace of mind that your entity is compliant and up to date as we tend to the day-to-day details while you can focus on the growth of your enterprise. You can also explore our entire portfolio of services available, such as banking and business start-up assistance, and embracing corporate administration, succession planning as well as accounting and local tax guidance.

Our team of Certified Public Accountants in Panama offer solutions tailored to your company´s specific needs and we have a lot of experience of dealing with offshore companies from many jurisdictions, as well as Panama. if you choose to engage our services, we will guide you on your accounting and reporting obligations and you will benefit greatly from our knowledge of dealing with all the local fiscal authorities.
The selection of the right accountant for you is a business-critical decision for the future of your business and it is no small matter to make the right choice when choosing a service provider. When taking your business affairs into uncharted waters, such as Panama, our proficiency in both Spanish and English can be of invaluable assistance to a client.

Topaz Services has been providing quality advice and expertise for over forty years and our experience in Panama is accompanied by the reliability, understanding, personal approach and responsibility you could expect from a British-run professional company.

Contact us today, and let our experience be your guide.