How to set up and operate an LLC from Panama?

More and more entrepreneurs based in Panama want to set up a US LLC. The reason is simple: international credibility, access to US payments, ease of banking, and a solid professional image.

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But a poorly structured LLC can become a tax or banking trap. Setting up an LLC from Panama is extremely powerful... provided you understand territorial logic, tax residency, and flow consistency. Here is the complete method, without any dangerous shortcuts.

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Why Create an LLC While Living in Panama?

A US Limited Liability Company (LLC) offers several strategic advantages.

It allows you to:

• Access US payment processors (Stripe US, PayPal US, etc.)

• Open fintech accounts such as Mercury

• Invoice in USD with credibility

• Work with US clients more easily

• Operate internationally with stronger institutional perception

 

For an entrepreneur living in Panama, this creates a bridge between:

• The US market

• International clients

• Panama’s territorial tax system

However, an LLC is not a magic solution. It must be integrated into a coherent territorial strategy.

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LLC Taxation: What Most People Misunderstand

A US LLC is not automatically taxed at the federal level if:

• It has no US trade or business

• It has no US employees

• It has no permanent establishment in the US

• It is owned by a non-US resident

 

In that case, the LLC is generally treated as a “pass-through entity.”

This means taxation depends on the tax residence of the owner.

If you are a tax resident in Panama and your income is foreign-sourced, it may not be taxable locally under Panama’s territorial tax system.

 

However, if you are still tax resident in Europe or elsewhere, the LLC income may be taxable in your country of residence.

The structure itself does not eliminate taxation.
Your tax residency determines the outcome.

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Where Should You Form Your LLC?

The two most common states are:

Wyoming

Low fees, simple administration, strong privacy.

Delaware

Highly recognized, often used for startups and institutional credibility.

For most digital entrepreneurs and consultants, Wyoming is usually sufficient.

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Steps to Create an LLC from Panama

• Technically, creating an LLC is straightforward:

• Choose the state.

• Select a Registered Agent.

• File the Articles of Organization.

• Obtain an EIN (Employer Identification Number).

• Open a bank or fintech account.

• The real question is not how to create it.
  The real question is how to use it correctly from Panama.

 

How to Use a US LLC While Living in Panama

Scenario 1: International Freelancer or Consultant

You live in Panama.
You invoice US or European clients through your LLC.
Payments are received in a US account.

If your tax residency is properly established in Panama and your income is foreign-sourced from a Panamanian perspective, local taxation may be zero.

But if your center of economic interest remains in Europe, risks arise.

 

Scenario 2: E-commerce or Digital Business

An LLC is ideal for:

• Amazon US

• Stripe US

• US-based SaaS or digital products

However, the place of management, decision-making, and effective control matters for tax purposes.

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Scenario 3: International Holding Strategy

Some entrepreneurs combine:

• A Panamanian corporation

• A US LLC

• A hybrid banking structure

This requires personalized analysis.

 

Banking: LLC + Panama Reality

Creating an LLC does not guarantee banking stability.

Banks and fintech companies evaluate:

• Your tax residence

• Source of funds

• Business coherence

• Risk profile

• Compliance transparency

 

This is where a compliant banking infrastructure becomes essential.

An LLC + clear Panamanian residence + structured flows = stability.
An LLC without coherence = potential account closure.

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Common Mistakes to Avoid

• Creating an LLC without clear tax residency

• Assuming an LLC eliminates taxation everywhere

• Mixing personal and business funds

• Ignoring US reporting obligations (Form 5472, etc.)

• Underestimating banking compliance

• An LLC is a tool.
  Used incorrectly, it becomes a liability.

 

Can You Combine a US LLC with Panama?

Yes — and it is a common strategy.

Panama offers:

• Stable residency

• Territorial taxation

• A solid banking environment

 

The US LLC offers:

• Access to the US market

• Payment infrastructure

• International credibility

When combined intelligently, these two jurisdictions create a flexible and powerful international structure.

This is structured freedom applied in practice.

 

Field Reality Example

An IT consultant living in Panama creates a Wyoming LLC to serve US clients.

He establishes proper Panamanian tax residency, structures his flows clearly, opens a Mercury account, and separates personal and business finances.

Result: compliant and stable structure.

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Another entrepreneur creates an LLC while remaining tax resident in Europe.

Result: tax requalification and exposure to audits.

The difference is always structural coherence.

 

Create Your LLC Easily

If you want to create a US LLC quickly and professionally, we recommend using a structured and reliable formation service.

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The service includes:

• Fast formation

• Registered Agent

• EIN assistance

• Support for non-residents

Creation is simple.
Strategic structuring is what truly matters.