How to pay a US company legally from Panama — and whether a US LLC makes sense for you
Panama is a fully dollarized economy and a major regional banking hub, making it a strategic base for entrepreneurs, freelancers, and digital businesses. Because Panama uses the US dollar (USD) as its legal tender and does not have a central bank imposing currency controls, outward payments to US companies are significantly more straightforward than in most Latin American countries. However, a US LLC can still access critical payment infrastructure for Panamanian founders and remote workers.
This guide covers: how to make a legitimate outward payment from Panama to a US company; what documentation your bank needs; the withholding-tax position; and whether forming a US LLC via FilingExpress is the right move for your business profile.
Who this is for
| Profile | Typical need |
|---|---|
| Freelancer / remote worker | Receiving USD from US clients via Payoneer, Wise, or direct ACH |
| BPO / IT services provider | Paying US suppliers, SaaS tools, or advertising platforms |
| E-commerce seller | Running a Shopify store with a US LLC as the merchant entity |
| Digital entrepreneur | Operating a business with USD earnings from abroad |
| Local business owner | Sending a wire transfer from a Panamanian bank to pay a US invoice |
Making a legitimate outward payment from Panama
The regulatory framework
Panama does not have a central bank or its own paper currency. The economy is fully dollarized, and the Superintendency of Banks of Panama (SBP) regulates the banking sector. Because there are no foreign exchange controls or currency conversion requirements, outward remittances for business purposes—including payments for software, SaaS subscriptions, advertising, professional services, and business formation costs—are permitted without prior regulatory approval.
While the government does not restrict the flow of capital, Panamanian banks maintain strict anti-money laundering (AML) and know-your-customer (KYC) protocols. This means that while you do not need central bank clearance, your bank will still require documentation to justify the outward transfer.
The SWIFT process
Panama hosts a large number of domestic and international banks. The most commonly used for business payments are Banco General, Banistmo, BAC Credomatic, and Global Bank.
What your bank will ask for:
- Invoice from the US company, with a clear description of the service or product
- Your RUC (Registro Único de Contribuyente) if paying as a registered business
- Valid government-issued ID (cédula or passport) for individual payers
- For larger amounts: a contract or service agreement to justify the transaction
- A completed wire transfer request form detailing the purpose of the payment
Typical processing time: 1–3 business days for SWIFT transfers to the US. Because the funds are already in USD, there is no currency conversion delay.
Fees: Panamanian banks typically charge a SWIFT fee of USD 35–50, plus potential correspondent bank deductions at the US end. Budget for USD 50–75 total friction per wire.
Alternatives to SWIFT wire
Wise (formerly TransferWise): Available to Panamanian residents for personal and business transfers. Useful for smaller amounts and for freelance payments. Wise is widely used by freelancers for paying US subscriptions and receiving client payments.
Payoneer: Widely used by freelancers on Upwork, Fiverr, and direct client arrangements. Payoneer issues a USD receiving account that US clients can pay via ACH. Withdrawals to Panamanian bank accounts are straightforward since the funds remain in USD.
Western Union / MoneyGram: Suitable for personal remittances but generally not recommended for B2B payments due to higher fees and less ideal documentation trails for corporate accounting.
Withholding tax position
Panama operates a territorial tax system, meaning only income generated within Panamanian territory is subject to income tax. However, Panama imposes withholding tax on payments to non-residents for services that benefit a Panamanian resident or entity.
The General Revenue Directorate (DGI) requires that royalties, interest, and commissions or fees for services paid to foreign entities are subject to withholding tax. The effective withholding tax rate on services is 12.5% (calculated as the standard 25% corporate rate applied to 50% of the remitted amount).
Panama and the United States do not have a comprehensive double taxation treaty covering income taxes (they only have a Tax Information Exchange Agreement). Therefore, payments to a US company for services that benefit a Panamanian business are generally subject to the 12.5% withholding tax under domestic law.
In practice, if the Panamanian payer decides not to withhold the tax, they cannot deduct the expense for local tax purposes. If you are paying for routine SaaS or software, the withholding mechanics can be complex, and you should confirm the exact treatment with a Panamanian tax adviser.
Does a US LLC make sense for you?
The case for a US LLC from Panama
Despite Panama's dollarized economy and lack of exchange controls, Panamanian businesses still face friction when accessing top-tier US payment gateways. A US LLC addresses several specific friction points:
Payment acceptance. Stripe is not officially supported for businesses incorporated in Panama. A US LLC with a US bank account provides the most reliable access to Stripe, PayPal Business, Shopify Payments, and Amazon Seller Central — all of which work more smoothly with a US entity.
Shopify store operations. If you are running a Shopify store targeting US or global consumers, a US LLC as the merchant entity enables Shopify Payments, improves checkout trust, and simplifies US sales tax compliance.
US banking. A US LLC can open a Mercury, Relay, or Bluevine business account online. This gives you a US ACH-receiving account and a US debit card, allowing you to hold and spend USD within the US banking system without routing funds through Panamanian correspondent banks.
For a detailed comparison, see our full Bluevine vs US Bank comparison.
Who should form a US LLC
- Freelancers and remote workers earning USD 500+/month from US or global clients who want cleaner payment infrastructure
- Shopify and e-commerce sellers targeting US consumers
- BPO and IT services providers who want to invoice from a US entity
- SaaS founders building for US or global markets
Who probably does not need one yet
- Businesses with purely local Panamanian revenue and no US clients
- Founders at the idea stage with no revenue
- Businesses that can already collect USD cleanly through Payoneer or direct wires without friction
Formation via FilingExpress
FilingExpress handles the full formation remotely — no US travel required. For a Panamanian founder, the typical path is:
- Wyoming LLC formation — the standard choice for non-residents. Approximately USD 150–200 all-in for the first year including registered agent.
- EIN (Employer Identification Number) — obtained from the IRS by fax or mail. No SSN required for non-residents. FilingExpress handles this as part of the formation package.
- US bank account — Mercury or Relay, applied for online after formation. Approval rates for Panamanian founders are reasonable with a clean application and clear business description.
- ITIN (Individual Taxpayer Identification Number) — required if you want to file a US personal tax return. Not required for the LLC itself if taxed as a disregarded entity.
For a detailed comparison, see our full Mercury vs Relay comparison.
Annual compliance: Wyoming LLCs require an annual report (approximately USD 60) and a registered agent (approximately USD 50–100/year). No state income tax in Wyoming.
US federal tax: A single-member LLC owned by a non-resident alien is a disregarded entity. It files Form 5472 and a pro-forma Form 1120 annually. No US federal income tax is owed on income not effectively connected with a US trade or business.
Practical steps to get started
- Assess your payment friction. If you are already collecting USD cleanly via local banks or Payoneer and have no US clients requiring a US entity, a US LLC may not be urgent. If you want Stripe, Shopify Payments, or US banking access, form the LLC now.
- Form the LLC. Use FilingExpress for a fully remote formation. Budget USD 200–300 for year one.
- Get your EIN. FilingExpress includes this. Takes 4–8 weeks by fax.
- Open a US bank account. Mercury is the most accessible for international founders. Apply online with your formation documents and EIN.
- Set up your payment stack. Stripe (once your LLC is approved) for client payments; wire transfers to move funds to your Panamanian bank when needed.
- File annually. Form 5472 + pro-forma 1120 by April 15. A US CPA charges approximately USD 300–600 for this filing.
Summary
Panama's dollarized economy and lack of exchange controls make outward payments to US companies straightforward via SWIFT from Banco General or Banistmo. However, a US LLC is worth forming if you want reliable Stripe access, Shopify Payments, or direct US banking. Formation is fully remote via FilingExpress, and the annual compliance burden is manageable. Here's what most guides won't tell you: while Panama uses the USD, local banks still face heavy correspondent banking scrutiny, meaning a direct US business account often saves you from unexpected wire delays.
For the broader picture on this topic, see our guide on how to pay a US company from your country.
See also
- Best Payment Processors for Non-Residents — Full Comparison For more context, see LLC vs C-Corp for Panama founders.