Law 624: what changes for offshore Companies?

Law 624: what changes for offshore Companies?

After Law 624 of 2021 goes into effect, offshore companies, real estate holdings, and inactive companies registered in Panama that have cryptocurrencies will have to keep accounting records. The Resident Agent will take guard this accounting and will have to keep it for a period of 5 years.

What does Law 624  contain?

Faced with multiple pressures from international organizations, Panama’s government decided to give in. President Laurentino Cortizo approved Law 624. This legal instrument demands that offshore companies that don’t pay taxes in Panama keep and show accounting records.

This Law includes the demands of the International Financial Action Task Force (IFATF). This organization threatened to put Panama on its blacklist. According to the Panamanian authorities, this law is trying to strengthen the county’s legal framework. Said law will also help to prevent money laundering and financing terrorism.

How much will Law 624 affect cryptocurrency holders?

In accordance with this new legal instrument, the information that proves the value of the cryptocurrencies held by this legal personality must appear in offshore company’s accounting. Plus, the income obtained with said assets, and from liabilities linked to these assets, will have to be reflected in the records.

The offshore companies that carry out operations outside of Panama will also have to keep, together with the accounting records, a daily log and a ledger.

How to create an accounting record for Panama’s companies that manage cryptocurrencies

Law 624 obligates offshore companies in Panama to dedicate an additional budget for mounting the accounting structure. One of the most economic options being used these days, is to turn to a specialized software program called CPA Data Panama.

This program has been shown to be very useful. It has a friendly interface in three languages (English, Spanish and Italian). The software organizes your accounting information according to the parameters established by the Panamanian authorities. Further, it counts on diverse functions, among which is printing the balances that can then be audited by a certified public accountant.

CPA Data Panama is also a valuable backup tool for the Resident Agent who represents the offshore company in Panama.

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