Offshore Panama IBC Vs Offshore Panama LLC
Offshore Corporations (IBC) and Offshore Limited Liability Companies ( LLC) have features in common. Although they have many similarities, there are important differences that can make one more effective than the other depending on the case of each client. Knowing some of these differences will help you choose the best option for your business.
- Panama LLC must be formed by a minimum of two (2) members or partner while in a Panama IBC have no requirement as to the minimum number of shareholders.
- In a Panama LLC the shares are not considered as negociable securities, so in order to be transfer it will no be suffice to endorse and deliver them; the transfer needs to be approved by the partners and it must be recored in a public minute while in a Panama IBC the shares can be transferred either privately handing the title in case of bearer shares or endorsing the certificate of action in case of registered shares.
- A Panama LLC only requieres a minimum of one (1) administrator who may be natural or legal person of any nationality, whereas in a Panama IBC the board should be compose by a minimum of three (3) persons who must be natural persons of any nationality.
- The abbreviation to be used for a Panama LLC Company must be S de RL whereas for Panama IBC can be used SA, Inc. or Corp.
- In some countries LLC and IBC are tax differently, for example IBC are consider as per se corporations and are not eligible to elect passthrought treatment, however LLC can chose its classification for tax purposes because are considered as an entitiy with at least two members and that offers the choise to choose to be taxes either as a corporation or as a partnership. Because in LLC all members has liability therefore they must elect passthrough tax treatment in which is allow the income or loss generated by the LLC to be reflected on the personal income tax return of the partners.
- In both juridical figures the capital should not be paid or released but is representative in shares or participation.
- Its provide protection to shareholders / partners since it is considered a separate legal entity and the members are only liable to the extent of their participation.
- Both figures can be used for offshore use because they have the same tax advantages as to payment of taxes.
- Both figures should only pay an annual fee of US $ 300.00 to keep up with the Panamanian state.