How to set up a trust in Panama

Before you start: what you decide

Five points are worth settling with your lawyer before a Panama trust is opened. A direction on each is enough at the start, and final answers can follow.

• Who benefits. Name the beneficiaries or describe them as a class, such as your children and their children, because the deed must say so in writing.
• What goes in. Cash, listed securities, private company shares and property each need different paperwork.
• Whether a holding company sits under the trust. The trustee then holds shares, and day-to-day dealings run through the company.
• Who holds which role. Beyond the trustee, the deed can create a protector and say who may advise on investments.
• What you keep. A Panama trust is irrevocable unless the deed says otherwise, so settle with your lawyer any power you want to reserve.

Put the answers in plain words. From them we prepare a short brief for the lawyer and the trustee, which cuts the number of drafting rounds.

The law page sets out the rules behind each feature, with sources.

Step by step: from enquiry to signed deed

The deed is signed only after your lawyer has reviewed it, and assets move only after the trustee has accepted office.

Think of the order below as the service process we run, not a sequence set by statute. Your lawyer confirms any step that the law itself fixes.

1. Enquiry. You send your country of residence, the assets you plan to move and the people who should benefit.
2. Client acceptance and identity checks. The checks come first because every later step waits on them. You get acceptance or an early no.
3. Structure design. We agree with you and your lawyer a diagram, the roles and the language of the deed.
4. Drafting. Counsel in Panama drafts the deed, and you review it with your lawyer.
5. Signing. You and the trustee sign the deed, and the trustee confirms in writing that it has accepted office.
6. Funding. The assets pass to the trustee, or to a company the trust owns.

We send a quote and the list of papers, so you can collect them before a start date.

A trust company in Panama holds office as trustee, and we coordinate the papers and reporting around it. Our identity checks come first, and your start date is confirmed in writing.

Documents the trustee asks for

In almost every case the same core papers are requested. Collecting them ahead of time removes the commonest delay.

• A valid passport for each settlor, beneficiary and other controller of the trust.
• Proof of address, such as a recent bank statement or utility bill.
• A short account of where your wealth came from, with supporting papers.
• A list of the assets you plan to move, with recent statements.
• Details of each beneficiary, and of the protector if the deed creates one.
• Records of any company that will sit beneath the trust.

Expect requests for certified copies. Because the deed may be drafted in Spanish, some papers could need translating, and counsel says which. Your lawyer can also say which forms the trustee accepts.

A single checklist comes from us, and one set of copies then goes to the lawyer, the trustee and the bank.

Identity and source-of-funds checks

The trustee applies client checks of its own on top of ours.

Source of funds is the origin of the money going into the trust today. Source of wealth is the history of how you built your overall position.

The evidence takes the form of sale contracts, payslips, tax returns, dividend statements or company accounts, which the trustee reads to be sure the assets are lawful.

A timeline showing how you earned or inherited the assets answers most questions before they come up.

A check may end in a refusal. If we cannot take a case, we say so early, and the trustee may decline on its own grounds.

Each year the trustee may ask for fresh papers. Keep the originals safe and report any change of address or circumstances.

After the trust is set up

With assets in, the trustee runs the trust under the deed, keeps the accounts, passes resolutions and records every decision.

You, we and the trustee meet at fixed points, not weekly. Review once a year, and again whenever the family or the assets change.

Life events qualify: a marriage, a birth, a move abroad or the sale of a business. The review is the time to update your letter of wishes.

Your tax follows you as a person and not only the trust. Your home country decides what you report, so your tax adviser should see the draft deed before you sign.

The cost guide explains the yearly work, and the overview shows who does what.