Private Foundations in Panama

Private interest foundations are legal entities that, although they cannot actively participate in commercial negotiations, can be used to include, maintain, and protect other types of assets and investments such as real estate, shares of other companies, bank and investment accounts, among others.

Our experts in Panamanian law can provide you with the information and advice you need to open your private interest foundation in Panama.

What are Private Foundations in Panama?

The private interest foundation is a legal instrument created by one or more “founders”, who can be both natural and legal persons. To be formed, it is necessary to sign the Foundational Act document and register it with the Public Registry of Panama.

In said document, the founder(s) undertake to assign a patrimony to the foundation to be managed by the members that make up the Foundational Council in favor of the beneficiary(ies), according to what is established in the Foundational Act.

Characteristics of Private Foundations in Panama

Private interest foundations are highly valued and employed in the country as part of estate planning, asset protection, and succession processes. In this sense, we will now mention some of its most relevant characteristics:

Separate Patrimony

The foundation’s patrimony is completely independent of its founders; therefore, the assets belonging to the foundation are protected and cannot be affected by legal actions or measures that go against the interests of the founders or beneficiaries.

Autonomous Management

The details of how the assigned patrimony will be managed can be included in the Foundation Regulations, which is not required to be presented to the Public Registry, so its content can be kept anonymous.

Tax Benefits

In Panama, private interest foundations are exempt from taxes, levies, contributions, or tributes, as long as the assets that constitute it are located outside the country; the deposited money does not come from a Panamanian source, and the shares or securities are not issued by Panamanian source companies or taxable income in the country.

Common uses of Private Foundations in Panama

What are the benefits of establishing a private foundation in Panama?

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2021-05-12

I have to say that I have been incredibly impressed and pleased with the quality, efficiency and thoroughness of the great service we have received from the whole PGS team. We have purchased two condos and also established Permanent Residency in Panama using PGS services for all of our legal requirements. Emilio and Edwin and all of their colleagues have been there every step of the way, providing sage, timely and patient guidance and efforts on our behalf. With their help, all of our steps to go through real estate and residency processes went very smoothly. They have also been very cost effective, offering better pricing and fees than other legal firms we looked at in Panama. We have been very happy that we made the decision to go with PGS! I need to make a very special mention of Andrea Cooper who has acted as our real estate agent for two major purchases over the past four years. Andrea has gone well above and beyond our expectations on these efforts. She has been the best real estate agent we have worked with, in any country, including our home of Canada. Anyone looking to buy or lease real estate in Panama is in great hands if they make the decision to work with Andrea and the whole extended PGS team. A big thank you to PGS!

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