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Panama trust law and key features
Panama trust law rests on Law 1 of 1984. This page lists each point with its reference and date, and your lawyer confirms how the rules apply to your deed, your trustee and the assets you plan to transfer into it.
Reviewed by a senior trust administrator, updated
The legal frame at a glance
What the law provides, with the source number for each item.
Key facts
- Trust structure
- A trust must be expressly declared in writing; verbal ones are invalid (art. 4)[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.
- 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.
- The article-level points come from articles 4, 7 and 38 of Law 1 of 1984, and your lawyer confirms how they apply.
The governing law
Panama’s core trust statute is the 1984 law on trusts. The official text is linked in the facts above, and each article-level row in the table below cites its article.
Law 21 of 2017 on fiduciaries is also listed in the facts above. Counsel reads the two laws together.
Panama is a civil law country, so the written law carries most of the weight.
Who may act as trustee
A trust company in Panama holds office as trustee, and we are your contact as a settlor living abroad. Your lawyer checks the trustee you are offered.
You can choose other people for other roles. A protector, an investment adviser or a co-trustee outside Panama may be possible, subject to the deed and to advice from counsel in Panama.
Features the law allows
Each row below gives the point and the article behind it. Your lawyer confirms how each point applies to your deed.
| Topic | What the law provides |
|---|---|
| Written deed | A trust must be expressly declared in writing; verbal ones are invalid (art. 4) |
| Revocability | Irrevocable unless the deed expressly says otherwise (art. 7) |
| Foreign law | A trust may be run under foreign law if the deed says so (art. 38) |
Source: Organo Judicial (CENDOJ): Ley 1 de 1984 sobre fideicomiso (Gaceta Oficial 19971), articles 4, 7 and 38.
Our page on wealth structuring and asset protection explains how we approach planning against claims in general.
Limits and requirements
Every feature comes with conditions, and a structure that ignores them can fail. The main points your lawyer will raise are these.
- Timing of transfers. How the timing of a transfer relates to an existing or expected claim is a point counsel examines before anything moves.
- Your home courts. A court at home may treat you as still owning assets you control, whatever the rules in Panama say.
- Retained control. The more control you keep, the more a court at home may look through the structure.
- Records and conduct. The trustee must act under the deed in practice, with real meetings and resolutions.
We never describe a trust as making assets untouchable. The structure gives your lawyer a set of rules to work with, and outcomes depend on facts and on courts we do not control.
The steps and documents show where these checks happen during set-up.
Sources and review dates
Every statutory point on this page comes from the 1984 trust law, articles 4, 7 and 38, in the official text dated 2026-11-06. The 2017 fiduciary law is listed from the same source entry.
The facts above carry their source and date; your lawyer confirms how each applies to your deed.
For tax questions, see the tax and reporting page. For what each part costs, see the cost guide, and for an overview return to the main guide.
Frequently asked questions
Which law governs a trust in Panama?
Law 1 of 1984 on trusts governs the trust in Panama, and the article-level points on this page come from articles 4, 7 and 38. Law 21 of 2017 is also listed in the facts. A deed may provide for foreign law (art. 38). Your lawyer confirms how they apply to your deed.
Who may act as trustee in Panama?
In practice a trust company based in Panama takes the role. We are your contact as a settlor living abroad, and we coordinate the papers and reporting around the trustee. Have your lawyer check the trustee you are offered before you sign anything. The deed sets out what that trustee may do.
Can a trust in Panama have a protector?
The deed can usually create a protector and set its powers, such as consenting to distributions or replacing the trustee. Whether and how Panama law provides for the role is a point your lawyer confirms for your case. A protector with wide powers tied to the settlor can weaken the structure.