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Panama trust: how it works and who it suits
A Panama trust is a fideicomiso under Panamanian law, in which a trustee holds your assets for the beneficiaries your deed names. A trust company in Panama holds office as trustee, and we coordinate the checks and paperwork with your own lawyer.
Reviewed by a senior trust administrator, updated
Key facts
- Trust structure
- A trust must be expressly declared in writing; verbal ones are invalid (art. 4)[1]
- Governing law
- Law 21 of 2017 (10 May 2017) on fiduciaries; Law 1 of 1984 on trusts[1]
- Foreign law rules
- A Panama trust may be run under foreign law if the deed says so (art. 38)[1]
- Reserved settlor powers
- A Panama trust is irrevocable unless the deed expressly says otherwise (art. 7)[1]
Numbers in brackets point to the Sources list at the end of this page.
Swipe sideways to see the whole diagram.
- SettlorSets up the structure and transfers assets into it
- transfers assets under a trust deedTrusteeHolds the assets and manages them under the trust deed
- holds and distributesBeneficiariesPeople who benefit from the trust under its terms
- Trustee holds legal titleTrust assetsThe property held in the structure
Roles and notes
| Part of the structure | What it does |
|---|---|
| Settlor | Sets up the structure and transfers assets into it |
| Trustee | Holds the assets and manages them under the trust deed |
| Beneficiaries | People who benefit from the trust under its terms |
| Trust assets | The property held in the structure |
- The settlor transfers assets to the trustee under a written deed and may live in any country.
- The trustee is a trust company in Panama; we coordinate the papers and reporting around it.
- Beneficiaries are named or described in the deed; the trustee acts only within its terms.
- Panama counsel drafts the deed, and your own lawyer reviews it at home.
How a Panama trust works
A trust is an arrangement under which one person, the settlor, transfers assets to a trustee. The trustee holds them for the beneficiaries the deed names or describes.
In Panama the trust is called a fideicomiso, and Panama trusts rest on Law 1 of 1984. The trust is not a legal person: the trustee holds legal title, and the deed says whom the assets are for.
A trust company in Panama holds office as trustee, and we are your contact as a settlor living abroad.
Panama is a civil law country, so its trust law comes from statute. Your lawyer confirms how it applies to your deed.
Many deeds are discretionary. The trustee decides who receives what and when, guided by the deed and by a letter of wishes from the settlor.
The letter guides the trustee but does not bind it. Keeping it current is the simplest way to make your intentions clear.
A trust can sit beside a company, which, unlike the trust, is a separate person with shareholders. The trustee then holds shares, and day-to-day dealings run through the company.
Panama also has private interest foundations, a separate form. This page covers the trust only.
Beneficiaries may receive distributions, by name or as a described class such as your children and their children.
A protector, where the deed creates one, can be given power over key decisions.
What the settlor may keep, such as a say over investments, is a question for counsel. Too much retained control can weaken the structure at home.
Who a trust in Panama suits
This structure suits families planning succession who hold a business through a holding company, and people with assets or beneficiaries in more than one country.
This page describes typical uses of a Panama trust. Reasons that bring people to a structure like this include:
- They want one deed and one set of records for assets in several countries.
- They hold shares in a family company and want an orderly plan for the next generation.
- They are weighing Latin American and Caribbean options and want sourced facts.
- They want their own lawyer to examine the structure before any money moves.
The deed may be drafted in Spanish, so ask counsel about translation in your first message.
A trust is not the right tool for every goal. The first review may show that a will, a company or another place suits you better.
Counsel at home must confirm that a structure in Panama is lawful and suitable where you live. We replace neither your lawyer nor your tax adviser.
What drives the cost
The cost follows the size and shape of the structure more than the place. We publish the set-up fee for a standard trust or foundation; annual administration, event-based work and third-party charges are quoted after we review your case.
Any figure in an estimate comes from the written terms of the trustee and the law firm.
The main drivers are:
- The number of parties, holding companies and bank accounts under the trust.
- The kinds of assets, since shares in private companies take more work than cash.
- The legal drafting, which grows with every special clause or role.
- The trustee’s yearly work: meetings, resolutions, records and reporting.
- Translation of the deed and supporting papers.
Tell us which assets you expect to transfer and whether a holding company is involved. The cost guide walks through each item.
An estimate is not an offer.
Documents and timeline
The set-up runs in a fixed order, and nothing is signed until your lawyer has reviewed the deed. The order is:
- Enquiry, then client acceptance and identity checks.
- Design of the structure with your lawyer, including any holding company.
- Drafting of the deed and your letter of wishes by counsel in Panama.
- Signing and acceptance by the trustee.
- Transfer of assets to the trustee or to a company the trust owns.
We ask first for identity documents, proof of address, evidence of the source of funds and wealth, and details of each beneficiary.
After that, timing depends on third parties: your lawyer, the trustee and the bank. We give you a checklist and a list of open items, not a promised date.
A missing bank letter can hold up every later step. The step-by-step guide lists the documents in order.
Panama compared with other places
Families often weigh several places against each other. The laws, the trustee options and the reporting duties differ, and the right answer depends on where you live and what you hold.
A fair comparison turns on five points: the governing statute, who is offered as trustee, what the register shows, what is reported to tax authorities, and what each step costs.
We do not rank places. The facts for Panama, each with its source and date, are on this page and on the law page, and our comparison tool sets places side by side. Your lawyer compares the statutes for your deed.
Tax follows the people, not only the trust. The tax and reporting page shows what to ask your adviser.
For the wider picture of planning against claims, see our page on wealth structuring and asset protection.
Facts we reviewed, with source and date
The table covers three articles of Law 1 of 1984, as named in the source. Your lawyer confirms how the Law applies to your case.
| Topic | What the source says |
|---|---|
| Written deed | A trust must be expressly declared in writing (art. 4) |
| Settlor’s powers | Irrevocable unless the deed says otherwise (art. 7) |
| Foreign law | A deed may provide for foreign law (art. 38) |
| Trust laws | Law 21 of 2017 (10 May 2017) and Law 1 of 1984 |
Basis: Organo Judicial (CENDOJ), Ley 1 de 1984 sobre fideicomiso, dated 2026-11-06. Law 21 of 2017 is listed from the same source entry.
Your lawyer confirms the duration of a trust and the limit for challenging a transfer for your deed.
Start with a quote.
Frequently asked questions
Who can set up a trust in Panama?
Any adult or company with assets to place in trust can be the settlor, subject to the identity checks the trustee runs. In Panama the trust is a fideicomiso. Spanish is a likely language for its deed, a point to raise with counsel early. Your lawyer and tax adviser confirm the structure suits you at home.
How do I start in Panama?
Write down who should benefit, what you plan to transfer and who advises you. Then send us a short message with your country of residence and whether you read Spanish. We reply in writing with a document list and a start date.