LLC Companies in Panama
Overview
Panama Limited Liability Companies (LLC) work similar to a Corporation but with less complexity. Law 4 from January 9, 2009 regulates their requirements and operations. These companies can carry civil or commercial activities, whether in Panama or anywhere in the world.
LLCs must carry a name available at the Panamanian Public Registry, and such name must include the suffix Sociedad de Responsabilidad Limitada or the initials S. de RL The LLC can be established for a finite period of time, or indefinitely.
Characteristics
Subscribers: The law requires a minimum of 2 persons, whether natural or legal, to open an LLC. These persons can be Panamanian or foreigners, and they are NOT required to be a company owner.
Initial Investment: The initial capital to open the LLC does not have to be liquid or available up front, and can be registered in any currency. The responsibility of each partner is limited and proportional to the capital invested.
Partners: The law requires a minimum of two partners or owners to open the LLC, whose information must be recorded in the Public Registry. These can be natural or legal persons, and there’s no maximum cap the number of partners. Owners can dispose of their stake in the company at any time with a private document.
Incorporation process
The law requires a private notarized document or a notarized public deed to open an LLC and register such company in the Public Registry. This document will include:
- The personal details of subscribers and partners
- The LLC official location
- The LLC duration, whether for a finite period of time, or indefinite
- The purpose of the LLC, which can be open or limited
- The initial capital investment in any currency, which we recommend to be of US10,000. However, the minimum capital investment can be less or more than that.
- The personal details of managers responsible for the LLC administration and the legal representation. These managers may or may not be LLC owners
- The personal details of any other administration member (e.g. secretary, treasurer, etc), persons with general or special power of attorney, and
Advantages
One of the main benefits of an LLC is its transparency, given that the owner’s personal information is publicly available, which is a requirement to do business in many countries nowadays.
Besides, it is possible to use Panamanian LLCs to do business whether in Panama or abroad, and the owner’s personal assets are separate from the LLC assets in the same way that Corporations (such as IBC) work.
On top of that, LLCs can be converted to Corporations at any time, and the other way around.
Finally, all foreign, non-Panamanian sources of income of the LLC are NOT subject to Panamanian income taxes.
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