Panama private companies

Panama limited liability company - LLC

Created under Law 24 of 1966, however Law 4 of 2009 was enacted to replace it, also known as “Sociedad de Responsabilidad Limitada”. They do not offer complete anonymity to the members and are not as flexible as those established in other jurisdictions. Members are only liable to the paid in or subscribed capital of the Company.

Panamanian LLC are used mostly for commercial purposes, so they will be governed by the rules and customs of commerce. There are two types of LLC:

  • 2 or more members: with at least 2 members, and a maximum of 20. If the 2 members are spouses, and third member should be included.
  • Individual LLC: known as “Empresa de Responsabilidad Limitada”. Formed by one person, or a spouses. The value of the goods transferred to the Individual LLC is equivalent to more than $5000, not in cash nor liquid assets, the values assigned to the assets should be certified by a CPA (certified public accountant). The individual LLC doesn't allow any member to take dividends from the LLC, only if company's profits are clearly established.

Main Characteristics of Panama´s LLCs:

  • They can carry out business anywhere
  • Need 2 persons to be incorporated, natural or legal
  • LLCs must have 2 partners minimum, there is not maximum amount of partners
  • LLCs become operational as soon as the articles are registered in the Panama Public Registry
  • Panamanian LLCs can merge with another legal entity, or can be converted into any other type of legal entity and change address.
  • There´s no minimum authorized capital required, and it can be in any currency
  • The capital is divided into shares to each partner
  • The liability of a partner is limited to the amount of his/her shares in the capital of the LLC

Taxation of Panamanian LLCs

Any income or dividend coming from a foreign source, paid to partners, will not levy any tax in the Panamanian territory.

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