Panama Limited Liability Companies (LLC / SRL)
A flexible corporate vehicle that combines the asset-protection benefits of a corporation with streamlined administration, designed for international investors and local entrepreneurs. Governed by Law 4 of January 9, 2009.
What is an LLC and why choose it?
The Panamanian Limited Liability Company (known locally as Sociedad de Responsabilidad Limitada or SRL, and internationally as LLC) is a flexible corporate vehicle that combines the asset-protection benefits of a corporation with the straightforward administration ideal for small and medium-sized businesses. Governed by Law 4 of January 9, 2009, the LLC may carry out civil or commercial activities both within Panama and abroad, making it a compelling choice for local entrepreneurs and international investors alike who seek to operate from a stable, internationally recognized jurisdiction.
An LLC is a legal structure designed for those who wish to clearly separate their personal wealth from the company’s assets. Members are liable only up to the amount of their contributions, meaning that personal assets such as homes, savings or vehicles remain shielded from the company’s obligations. Combined with Panama’s straightforward administration and tax advantages, the LLC is an excellent vehicle for small and medium-sized businesses, joint ventures, family holdings and international operations.
Key Features of a Panamanian LLC
Corporate Name & Duration
The company must adopt a name available in the Panama Public Registry, followed by “Sociedad de Responsabilidad Limitada” or “S. de R.L.” Duration may be perpetual or for a fixed term.
Subscribers & Members
At least two (2) subscribers are required. The LLC must have at least two (2) members registered with the Public Registry; there is no maximum cap. Members may freely transfer their participation through a private document.
Share Capital
Capital may be denominated in any currency and need not be paid up at incorporation. We suggest a reference initial capital of US$10,000. Each member’s liability is strictly limited to the value of their contribution.
Management
Management may be entrusted to one or more administrators (members or non-members), and the company may also appoint officers or attorneys-in-fact with defined powers.
Resident Agent
Every LLC must appoint a Resident Agent in Panama, a role that may only be performed by a licensed attorney or law firm. Díaz & Asociados provides this service as a core part of its corporate advisory.
Language & Meetings
Articles of incorporation may be drafted in Spanish or any additional language. Members’ or administrators’ meetings may be held outside Panama and via electronic means.
Incorporation Process
The LLC is incorporated through a notarized private document or public deed, which must then be filed with the Panama Public Registry. The articles of incorporation must include:
- Identification and address of subscribers and members.
- Registered address of the company.
- Duration (perpetual or fixed term).
- Corporate purpose (may be broad or restricted to a specific activity).
- Authorized share capital, currency, participations or quotas, and unit value.
- Designation of administrators and legal representatives.
- Designation of officers or attorneys-in-fact, general or special, and their powers.
- Designation of the Resident Agent.
- Any other clause the parties wish to include.
Benefits of Incorporating an LLC in Panama
Transparency & International Recognition
Member information is recorded in the Public Registry, meeting the transparency standards required today in many jurisdictions to conduct international business.
Asset Segregation
Members’ personal assets remain isolated from the company’s liabilities, mirroring the protection afforded by a corporation.
Flexible Conversion
An LLC can be converted into a Corporation —and vice versa— at any time, providing freedom to adapt the structure to the evolution of the business.
Offshore Tax Exemption
Income generated by the LLC outside Panama is not subject to Panamanian income tax, in application of the territoriality principle.
International Operations
The LLC may hold assets, bank accounts and property anywhere in the world, with no requirement to declare them in Panama.
Virtual Meetings
Members’ or administrators’ meetings may be held outside Panama and via electronic means, offering maximum operational flexibility.
Maintenance Obligations
To remain in good standing, every Panamanian LLC must comply with:
Annual Flat Tax (Tasa Única)
US$300.00 per year, payable to the Panamanian government from the second year of the LLC’s existence. Same amount as a Panama Corporation (S.A.).
Resident Agent
US$250.00 per year. Annual fee for the attorney or law firm serving as Resident Agent — mandatory by law for all Panamanian LLCs.
Common Uses of an LLC
Small & Medium-Sized Businesses
Operating businesses in Panama with a clear separation between members’ personal assets and the company’s obligations.
International Trade
International trade of goods under the territoriality principle, provided goods do not enter Panamanian fiscal territory.
Family Holdings
Estate-planning vehicles and family asset structuring with legal protection and management flexibility.
Asset Holding
Holding real estate, bank accounts, interests in other companies and any type of lawful asset worldwide.
Joint Ventures
Projects among multiple partners with clear participation rules and liability limited to each member’s contribution.
Tax-Efficient Structuring
Tax-efficient structuring for entrepreneurs and independent professionals operating across multiple jurisdictions.
Why Choose Díaz & Asociados?
Our firm supports clients across the entire life cycle of the company —from name availability checks and drafting of the articles of incorporation, to Public Registry filing, bank account opening, Resident Agent services, and annual accounting and regulatory compliance. We assist domestic and international clients and deliver personalized service in both Spanish and English.
Panama-Based Legal Guidance
Our firm is based in Panama and provides legal services directly under Panamanian law, offering precise guidance from professionals working within the local legal system.
International Focus
We work primarily with international clients —entrepreneurs, investors, families and companies— requiring legal services tailored to cross-border circumstances and objectives.
Full Life Cycle Support
From incorporation to dissolution, including amendments, participation transfers, accounting compliance and corporate restructurings.
Bank Account Opening
Full assistance for opening bank accounts in Panama and abroad, a key service for internationally operating companies.
Tax Advisory
Tax advisory and annual accounting compliance in line with international transparency standards of the OECD Global Forum.
IP Advisory
Intellectual property advisory, trademark registration and protection of intangible assets in Panama and internationally.
LLC Incorporation Fees
We offer two packages depending on whether the LLC will operate actively in Panama or be used for asset holding, investment or international purposes.
- Preparation and filing of Articles of Incorporation
- Filing with the Panama Public Registry
- Basic corporate legal documentation
- Initial corporate setup for holding or non-operational purposes
- DGI registration (Dirección General de Ingresos)
- Obtención de RUC y NIT
Reference fees. Request a personalized quote for additional services.
- Preparation and filing of Articles of Incorporation
- Filing with the Panama Public Registry
- DGI registration (Dirección General de Ingresos)
- Obtención de RUC y NIT
- Municipal registration (MUPA)
- Registration in Panama Emprende
- Aviso de Operación (Business Operating Notice)
- Assistance with corporate legal setup
Reference fees. Request a personalized quote for additional services.
Frequently Asked Questions about Panama LLCs
What is the difference between an LLC and a Corporation?
A Corporation issues shares and allows greater shareholder anonymity; the LLC operates through participation quotas and requires members to be registered in the Public Registry. The LLC is generally simpler to manage and is often preferred in jurisdictions that demand transparency.
Do I need a Resident Agent?
Yes. Law 4 of 2009 requires every LLC to appoint a Resident Agent in Panama, who must be an attorney or law firm. Díaz & Asociados provides this service.
What is the Panama Public Registry?
It is the government agency where all corporate acts are recorded: incorporations, amendments to articles, changes in management, transfers of participations and dissolutions.
Does the LLC pay taxes in Panama?
Only on income generated within Panamanian territory. Foreign-source income is exempt, in accordance with the territoriality principle.
How long does incorporation take?
Typically 5 to 10 business days, depending on name availability and timely submission of members’ documents.
Can I convert my LLC into a Corporation later?
Yes. Conversion is permitted by law and may be carried out whenever the members decide.
Other Corporate Services
Panama Corporation (S.A.)
The most widely used corporate structure in Panama. Greater anonymity, share issuance and broad flexibility for international business. Learn more →
Private Interest Foundation
Ideal for estate planning, family succession and asset protection. A unique feature of Panamanian law. Learn more →
Legal Fees
Transparent information on our legal fees for all corporate, immigration and real estate services. Learn more →
Incorporate Your Panama LLC with Expert Legal Guidance
Our firm assists domestic and international clients with the incorporation, structuring, compliance and ongoing legal maintenance of Panama Limited Liability Companies. Contact us to discuss your requirements and begin the process.