The civil-law equivalent of a common-law trust.
Panama’s Private Interest Foundation (Fundación de Interés Privado, Law 25 of 1995) gives civil-law jurisdictions and Latin-American clients a sophisticated alternative to common-law trusts — same protection, same flexibility, same privacy, but in a familiar legal-tradition wrapper.
What makes Panama the right pick.
Latin America’s most-used civil-law asset-protection wrapper, with 30 years of practice and a strong charging-order framework.
Civil-law foundation, not a trust
Panama Foundations are a separate legal person that owns its own assets. The founder’s role ends at endowment; thereafter the Foundation Council manages assets per the by-laws. No trustee/trust relationship to construct — cleaner for civil-law tax authorities.
Three-year fraudulent-transfer SOL
Law 25 establishes a 3-year statute of limitations on creditor challenges to founder transfers. Longer than Cook Islands but shorter than Liechtenstein.
0% Panamanian tax on foreign-source income
Panama operates a strict territorial tax system. Foundations are not taxed on foreign-source income at any level — dividends, interest, capital gains, real-estate rents, business income from outside Panama.
No public register of founders or beneficiaries
The Public Registry of Foundations records only the foundation name, founder name, and council members. Beneficiary identity is private and held only by the foundation council and the protector.
Founder can be a beneficiary
Law 25 explicitly permits the founder to be a beneficiary. Combined with the protector role, this gives substantial structural flexibility for control and succession.
Forced-heirship override
Law 25 explicitly states that Panama Foundation property is not subject to foreign forced-heirship rules. A foundation founded by a French, Spanish, or Latin-American national bypasses civil-code reserved-share rules.
When Panama is the right choice.
The fact patterns where this jurisdiction outperforms alternatives.
Latin-American HNW family wealth
Mexican, Colombian, Argentine, Brazilian, and Chilean families routinely use Panama foundations for multi-generational wealth holding outside their home tax authorities and forced-heirship rules.
Civil-law European succession planning
Spanish, Italian, French, and German clients prefer Panama foundations over common-law trusts for the cleaner legal-tradition fit and the explicit forced-heirship override.
Banking-secrecy-oriented holding
While CRS-compliant, Panama foundations remain materially less transparent than US LLCs or UK companies — useful for clients who value the structural opacity of a private legal person.
Real-estate holding across Latin America
Panama foundations are the standard wrapper for Latin-American family real-estate portfolios spanning multiple jurisdictions, with the foundation as central holder and local SPVs as title-holders.
Setup
Annual administration
Timeline
What clients ask before settling.
Pragmatic answers on the Panama framework specifically.
How is a foundation different from a trust?
Can I keep control as the founder?
What about US tax treatment?
Is Panama still a ‘safe’ jurisdiction post-Pandora Papers?
Can foundations hold cryptocurrency?
Ready to set up your Panama structure?
Book a strategy call and we’ll quote a complete formation-and-administration package within twenty-four hours.
Book a strategy call →