Guide · Estate planning and inheritance
Panama Private Interest Foundation
What a Panamanian private interest foundation is, how it is used in wealth and succession planning and how it is set up.
- Law
- Law 25 of 1995
- Initial assets
- USD 10,000
- Registered agent
- Panamanian lawyer
- Updated
On this page
In short
A private interest foundation is a separate pool of assets that a person dedicates to certain purposes and beneficiaries, managed by a foundation council. It is used for succession planning and organizing family wealth, always for legitimate purposes.
How does a private interest foundation work?
- The founder contributes initial assets of at least USD 10,000.
- The foundation council manages the assets according to the foundation charter and, if there is one, its regulations.
- The beneficiaries receive the assets or income under the conditions set.
- A protector can supervise the council, if provided for.
- A Panamanian lawyer acts as registered agent.
What is it used for?
- Organizing succession and avoiding probate in several countries.
- Keeping family wealth together and setting how it is distributed.
- Separating personal assets from assets set aside for the family.
A foundation cannot be used to hide assets or to evade taxes or obligations to creditors: the law allows fraudulent contributions to be challenged, and beneficial ownership information is available to the authorities.
How is it set up?
01
Designing the foundation
Purposes, beneficiaries, foundation council and, where appropriate, a protector.
02
Foundation charter before a notary
It is formalized in a public deed.
03
Registration in the Public Registry
From registration, the foundation has legal personality.
04
Contribution of assets
Transfer of the assets to the foundation.
Frequently asked questions
Is a Panamanian foundation recognized in my country?
It depends on the country: some treat it as a trust, others as a company, and others apply their own rules. Its tax effect in your country is one of the points we review in the consultation.
How much does it cost to maintain?
There is an annual flat fee of USD 400 (USD 350 in the year of incorporation), plus the fees of the registered agent and, where applicable, the foundation council.
How is it different from a corporation?
A corporation is for doing business and has shareholders. A foundation has no owners and cannot habitually engage in commercial activities: it manages assets for its beneficiaries.
Does a foundation replace a will?
Not always. The foundation organizes the assets you contribute to it, but anything still in your name is inherited through succession. The usual approach is to combine it with a will in Panama.