For residents of Panama who own a US LLC
US LLC Owned From Panama: Form 5472, Taxes and Filing
A US LLC owned from Panama has a yearly IRS filing even if it earns nothing in the US. This guide shows the filings, the Panamanian tax ID that goes on Form 5472, and what it means that the US does not have a tax treaty with Panama.
Quick answer
Does a resident of Panama who owns a US LLC have to file with the IRS?
Yes, if the LLC had a reportable transaction with you, and forming and funding it counts. A single-member US LLC owned by a resident of Panama files Form 5472 with a pro forma Form 1120 each year, usually by April 15 for a calendar year, even with no income. The US does not have an income tax treaty with Panama, which affects how profits and US-source payments are taxed, not whether Form 5472 is due.
At a glance
- Yearly US filing
- Form 5472 with a pro forma Form 1120
- US tax treaty with Panama
- No, per the IRS treaty list
- Your home tax ID
- Your RUC (Registro Unico de Contribuyente), which for an individual is the same as the personal identity number
- Currency
- Convert Panamanian balboas, where an amount is not already in US dollars to US dollars; the form is in US dollars
- Fees
- See our Form 5472 filing service page, or request a quote
Without a US treaty: LLC owners in Panama
The United States has no income tax treaty with Panama (IRS treaty list). For an LLC owner that has two consequences.
US tax on profit depends only on US law. The question is whether the LLC's income is effectively connected with a US trade or business. With no treaty, there is no permanent establishment threshold to rely on. Work done from Panama for US customers is often outside that, but staff, an agent or premises in the US can bring it in, and then a Form 1040-NR is due for an individual owner.
No treaty claim on Form W-8BEN. There is no treaty to claim under (IRS), and US-source dividends, interest and royalties are generally withheld at 30% (IRS).
The yearly US filings for an LLC owned from Panama
Here is the yearly list for a single-member LLC whose only owner lives in Panama.
- Every year with a related-party transaction: Form 5472, attached to a pro forma Form 1120. Forming the LLC, funding it and taking money out all count (IRS instructions). The LLC usually owes no US income tax as a disregarded entity; this is an information return.
- Once, soon after you start: the BE-13 survey to the Bureau of Economic Analysis, generally within 45 days of a foreign person setting up or buying a US business (BEA rule).
- Every year, to the state: whatever the formation state charges; US LLC annual fees by state lists them.
- Only sometimes: Form 1040-NR, when the LLC earns income effectively connected with a US trade or business (IRS).
Missing Form 5472 costs US$25,000 per failure, and a substantially incomplete form counts as not filed.
What we need from an owner in Panama
To prepare the filing for an owner in Panama, we ask for:
- Your passport and your home address in Panama
- Your tax ID: For a resident of Panama, this is usually your RUC (Registro Unico de Contribuyente), which for an individual is the same as the personal identity number (OECD tax ID sheet).
- The LLC's formation documents and EIN letter
- Bank and payment account statements for the year, so every transfer between you and the LLC can be listed, converted from Panamanian balboas, where an amount is not already in US dollars where needed
The IRS wants all amounts in US dollars and the same tax ID used every year (IRS).
Reporting the LLC in Panama
Owners living in Panama, including many foreign nationals who moved there, use a US LLC for consulting, online businesses and US-facing sales.
We do not advise on the tax law of Panama. Your local adviser decides how the LLC is reported at home, and we give them the US returns and numbers so both sides match.
Filing from Panama with us
For an owner in Panama, we prepare the Form 5472 and pro forma Form 1120 filing, or the full year for a single-member LLC. Gurleen Kaur, CPA (BC and Washington), prepares and signs. See our Form 5472 filing service for fees, or request a quote.
See our Form 5472 filing service, the annual compliance package and which state to form in.
The legal sources behind this page (Panama)
The treaty articles and US provisions this guide relies on.
Treaty
- There is no US income tax treaty with Panama: it is not on the IRS A to Z treaty list. The Internal Revenue Code applies without treaty changes.
US law
- Form 5472: Internal Revenue Code section 6038A and Treas. Reg. section 1.6038A-1; final regulations T.D. 9796 treat a foreign-owned US disregarded entity as a corporation for this purpose (IRS Form 5472 instructions).
- US trade or business and effectively connected income: Code sections 864 and 871 (IRS Pub 519).
- Withholding on US-source payments to nonresidents without a treaty rate: IRS Pub 515.
- BE-13: 15 CFR 801.7 (eCFR).
The tax law of Panama itself also applies to you; check it with a local adviser.
Owners in other countries
Every country page uses the same US rules with that country's treaty status and tax ID. See all of them on US LLC tax by country.
- The Netherlands
- Turkey (Turkiye)
- Romania
- China
- Argentina
- Brazil
- The United Kingdom
- Germany
- India
- Pakistan
- The United Arab Emirates
- South Africa
- Australia
- Peru
- Greece
- Italy
- Spain
- France
- Nigeria
- Mexico
- The Philippines
- Poland
- Portugal
- Israel
- Japan
- South Korea
- Thailand
- Ireland
- Switzerland
- Sweden
- Austria
- Belgium
- Denmark
- Norway
- New Zealand
- Singapore
- Hong Kong
- Malaysia
- Colombia
- Kenya
- Ghana
- Saudi Arabia
- Vietnam
- Chile
- The Czech Republic
- Finland
- Iceland
- Estonia
- Latvia
- Lithuania
- Slovakia
- Slovenia
- Indonesia
- Ukraine
- Egypt
- Bangladesh
- Morocco
- Sri Lanka
- Bulgaria
- Cyprus
- Malta
Common questions
Is Form 5472 required for an LLC owned from Panama with no income?
Yes, when there was a reportable transaction with you, such as funding the LLC. No income is needed. A missing or substantially incomplete form carries a US$25,000 penalty.
Which tax ID from Panama do you need from me?
Your RUC (Registro Unico de Contribuyente), which for an individual is the same as the personal identity number. The IRS asks for the same foreign tax ID every year.
Does the United States have a tax treaty with Panama?
No. Panama is not on the IRS list of US income tax treaties, so you cannot claim treaty benefits on Form W-8BEN. Form 5472 is due either way.
Do I need a Form 1040-NR as an LLC owner in Panama?
Usually only Form 5472 with the pro forma Form 1120 is filed. A Form 1040-NR is needed if the LLC has income effectively connected with a US trade or business, and with no treaty there is no permanent establishment test to rely on.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- IRS: United States income tax treaties, A to Z
- IRS: Instructions for Form 5472
- IRS: Form 5472
- IRS: Publication 515, withholding on nonresident aliens and foreign entities
- IRS: Instructions for Form W-8BEN
- eCFR: 15 CFR 801.7 (BE-13 reporting requirement)
- OECD: Information on tax identification numbers, Panama
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Form 5472 filing service, Annual compliance package, US LLC tax by country.
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Prepared and signed by a licensed US CPA who can represent you before the IRS. Verify Gurleen Kaur's Washington licence (#41150) on CPAverify