Q&A Accounting Records in Panama

So, since posting the article regarding the need for accounting records, we have a number of questions asked by clients, so we thought we would provide a “Q&A Accounting Records”:

Q&A Accounting Records, Questions regarding accounting records in PanamaIs this true even for companies that do no business but only hold title to a property?

Yes – if the company does not actively do business but is holding assets of any nature, it should at the very least have a balance sheet. This would show the value of the asset (the property) and the value of the capital or loans made to the company which provided for the purchase of the proprety.  Additionally, there should be included in the accounting the annual property taxes which are paid on the property, or any maintenance costs that are paid by the company that owns the property.  Correspondingly, you would need to indicate where the funds come from to pay for these taxes (capital into the company, loans, or rental income).

qa2…I will also need to be advised as to just what I need to keep records of.  My  corporations are solely to hold real estate and are within my foundation.  Other than the corporations,  a bank account, the foundation has no other purpose.

For the corporations which hold the real estate, you will need to prepare an accounting such as that suggested above:  a balance sheet that shows the value of the asset (the property) and the value of the capital or loans made .

For the Foundation which owns the corporations, you should prepare a balance sheet which shows the assets (corporations – with their values – and the bank account).  Funds moving in or out of the bank account should also be accounted, and you should attach to your accounting the monthly bank statements.  As explained in our original article, there is no requirement to have a “formal accounting”, but it should at the very least have a balance sheet with assets, liabilities and capital.

Following are some basic examples of sample balance sheets:

balance sheet, Q&A accounting records

Accounting Records example balance sheet

Q&A accounting records, sample balance sheet

Sample Balance Sheet

As more questions are asked, we will attempt to update and provide answers to these questions about what is required in 2017.