Country guide · Panama
The real requirements, what it costs every year, what you file with the IRS even with zero revenue, and why a Panama resident billing abroad is usually better served by an LLC than by a local corporation.
This is the most searched question and the worst explained. To form a US LLC as a Panama resident you need:
What you do not need: a visa, a trip, a US partner, your own US address or an ITIN. The ITIN comes later and only in some cases — if you end up filing a personal US return, or if a particular bank insists — and is quoted separately.
This is the question that actually matters once you live in Panama, where setting up a local company is simple and cheap. The answer is not about tax: it is about getting paid.
Stripe, PayPal, Amazon, Upwork and nearly every US platform onboard an LLC with an EIN without argument. A Panamanian company gets extra documentation requests, delays, or a flat no. If your clients or payment rails sit in the United States, the LLC is the vehicle that lets you invoice and collect. If your business is local — a shop, services inside Panama — the Panamanian company is still the right answer, and nobody should sell you an LLC for that.
An LLC has an annual floor you pay whether you invoice or not. Putting it in writing before charging you is the minimum.
| Item | Year 1 | Year 2 onward |
|---|---|---|
| Full formation LLC, EIN, operating agreement, banking guide | Quoted on your case | — |
| Wyoming state fee | USD 102, included above | USD 60 annual report |
| Registered agent | Included | USD 150 per year |
| Mandatory federal filing Form 5472 + pro forma 1120 | Quoted per tax year | Quoted per tax year |
One concrete advantage of Panama: the balboa is pegged to the dollar and the dollar is what circulates, so there is no conversion and no exchange controls in the way. You pay and collect in the same currency the company operates in.
On the US side there is an obligation that does not depend on revenue: Form 5472 with the pro forma 1120, every year, starting with the first. The penalty for not filing starts at USD 25,000 and is automatic. Whether you also owe federal income tax depends on where the income is earned: working from Panama with no US office or staff, the usual answer is no federal tax and only the informational filings. If your operation touches US soil, Form 1040-NR applies.
On the Panamanian side, the system is territorial: foreign-source income generally is not taxed there. How that applies to your case is confirmed by a Panamanian accountant who knows your situation, and we give them the LLC paperwork they will need. What you will not hear from us is that you pay nothing anywhere.
With the EIN and your passport you can open an account remotely at digital banks such as Mercury or Relay. Worth knowing: Panama came off the FATF grey list in late 2023, but the history still weighs and some banks ask for additional documentation when the owner lives there. It is not a blocker, it is a longer process.
What drives approval is describing precisely what the company does, who the clients are and where the money comes from. The banking guide is included and, if you are declined, we give you the written fallback plan at no extra cost.
A document issued in the United States — the LLC's articles, a certificate of status, a power of attorney — is not valid before the Panamanian Public Registry or a local bank on its own: it needs an apostille. Panama is party to the Hague Convention, so the apostille is enough and no consular legalization is required. We handle it from USD 250, online notarization included, shipping quoted separately by destination. Details on the apostille page.
Based somewhere else? There are country guides for Argentina, Chile, Colombia, Spain, Mexico and Peru.
Your passport, and little else. No US ID, no visa, no local partner, no travel. The state requires a registered agent with a physical address there, included for the first year, and the EIN is issued without a Social Security number, as a foreign owner.
Full formation is quoted on your case and includes the first-year Wyoming state fee (USD 102), the EIN, the operating agreement and the registered agent for year 1. From year two, the floor is USD 60 for the annual report plus USD 150 for the registered agent. The mandatory federal filing is separate and quoted per tax year.
Because of how you get paid. Stripe, PayPal, Amazon and most US platforms onboard an LLC with an EIN without friction, while a Panamanian company faces extra review or outright rejection. If your clients or payment rails are in the United States, the LLC is what lets you collect. If your business is purely local, the Panamanian company still makes more sense.
It depends on where the income is earned, not where the company is registered. Working from Panama with no US office or staff, the usual answer is no federal income tax and only informational filings. If your operation physically touches the United States — warehouse inventory, an office, employees — Form 1040-NR enters the picture.
Panama taxes on a territorial basis: foreign-source income generally is not taxed there. How that applies to your specific case is confirmed by a Panamanian accountant, and we hand them the LLC paperwork they will need. What you will not hear from us is that you pay nothing anywhere: that line belongs to people who disappear afterwards.
Panama came off the FATF grey list in late 2023, but the history still weighs: some digital banks ask for extra documentation when the owner is resident there. It is not a blocker, it is a longer process. What matters most is describing precisely what the business does and where the funds come from.
Full formation is quoted on your case, with the state fee and the first year of registered agent included. If you would rather review your case first — especially if you are torn between an LLC and a Panamanian company — the 15-minute consultation is USD 29 and is credited toward any service you hire afterwards.
Signed by Onell Lanfranco: public accountant licensed in Argentina, Florida notary public with a commission verifiable on Sunbiz, and author of «El impuesto al novato».
This page is informational and is not individualized legal or tax advice. Your Panamanian tax position is determined by a licensed accountant there.
Two or three lines: what you will invoice from Panama, whether there are partners, and what you already have in place. I answer personally with the diagnosis and a fixed quote, in writing.
GUIA GRATUITA · PDF DESCARGABLE
Si tenés una LLC en EE.UU. con dueño extranjero, este reporte vence cada año. La multa es automática. El IRS no avisa.
Sin spam. Te enviamos el PDF al instante.
LISTO
También te lo mandamos por email para que lo tengas a mano.
Abrir PDF →CHECKLIST GRATUITO · APOSTILLA FLORIDA
Te paso el checklist completo que uso con mis clientes para que no te rechacen documentos en Argentina, México, Colombia, Chile, Perú o donde necesites usarlos.
Sin spam. Te enviamos el PDF al instante.
LISTO
También te lo mandamos por email para que lo tengas a mano.
Abrir PDF →