Panama Private Foundation. Service offer

Registration of Private Foundations in Panama is regulated by Law No. 25 of 12 July 1995 on Private Foundations.

Just as private foundations registered in Liechtenstein or Austria, Panama foundations are a hybrid form combining features of a classic trust and a private company. A foundation, unlike trust, is a legal entity, but it is set up by a founder through separating some of his property which the foundation uses to achieve certain non-profit goals.

1. To accumulate and manage the wealth of the founder’s family;
2. To protect the assets of the founder or beneficiaries (there is a special time limit for creditors to make their claims against the foundation assets, and such claims are only upheld if the assets are proved to have been transferred to the foundation in violation of the creditors’ rights);
3. To accumulate money that in the future will be spent on education of the founder’s children;
4. To ensure a certain order of priority in distributing assets to the heirs of the founder or of the first priority beneficiary;
5. To manage pension savings or receive insurance payments;
6. For charitable purposes;
7. To manage a group of companies (provided that the group belongs to one beneficiary or his family members).

To create a foundation, a founder signs a charter (articles) before a notary, which charter is then submitted to the Public Registry for registration. After the registration number is allocated, a foundation receives a status as a legal entity and can start operating.

According to the Law on Private Foundations, the charter must state the name of the founder, members of the Foundation Council and protector (if one is appointed at the time of setup) and the purposes for which a foundation is established.

Once established, a foundation should be transferred property or money for a sum of not less than USD 10 000.

A foundation is managed by the Foundation Council, the first members of which are appointed by the founder.

The Council must comprise at least three individuals (not necessarily Panamanian residents) or one or more legal entities.

When establishing a foundation, it is possible to use a nominee founder and Council members.

A foundation has no shareholders or members, but has beneficiaries. The details of the beneficiary (beneficiaries) must be specified either in the charter or in a specialized document called Regulations, which is confidential and is not filed for registration. This is why beneficiaries are normally stated in the Regulations.

The obligation to keep confidential the foundation’s activities or operations is imposed by law on both Council members and other parties (including officials) who have gained access to such information in the course of their normal business. The breach of confidentiality of such information can be penalized with a fine of USD 50 000 and / or a term of imprisonment of up to six months.

In addition to containing the details of beneficiaries, the Regulations may also state the procedure of appointing / changing Council members and protectors, how the foundation’s income is going to be distributed and other aspects of its operations. However the provisions of the Regulations cannot contradict the foundation’s charter or Law No. 25.

But a foundation, just like any Panama offshore company, must have a local agent and pay annual fees to the Public Registry.

*The fees are valid as of April 2025.