private fundations


Panama Private Foundations

About the Foundation and comparing it with other juridical figures.
About the Founder
About the Foundation Council
About the Beneficiaries
About the Foundation’s Regulations
About the Commercial Activities
About the Foundation’s Assets

1. What is the difference between a Company and a Private Interest Foundation?

The main difference between the two is that the Panamanian company is used for commercial activities, and the private foundation is commonly used for heritage protection.
A Panamanian company is composed of shares and shareholders; the owners of the shares will be the company owners and, therefore, the ones who will enjoy the assets, unlike the Private Interest Foundation that has a founder and a beneficiary. In this case, the Foundation’s assets’ enjoyment will correspond to the beneficiary according to the provisions on the Foundation Charter.

2. What is the difference between a Trust and a Private Interest Foundation?

In a Trust, the trustee transfers some assets to a third person called a fiduciary to manage these assets for the benefit of a third person. In most cases, this figure is a bank or a specialized company in this matter. In the Private Interest Foundation, the assets are transferred to the Foundation; therefore, the founder will manage his own Foundation’s assets.

3. What are the differences between Liechtenstein’s Foundations and the Panamanian Private Interest Foundations?

There are many differences between these, such as:


  • The authorized capital of a Panamanian Foundation is US$10,000.00, which is a nominal capital that does not have to be paid in full.
  • In Liechtenstein’s Foundations, the capital has to be totally paid, and the annual tax will depend on the amount of the authorized capital.


  • The Government supervises Liechtenstein’s Foundations.
  • The Panamanian Foundations are not. The Founder can appoint a protection or supervision entity in a public document or, on their regulations, a private document, but this entity will always be private.


  • The assets from a Private Interest Foundation may not be the object of “seizure” for the Founder’s obligations.
  • Unlike Liechtenstein’s Foundations, this rule does not apply.


  • In the Private Foundation, the forced heirs’ figure does not exist.
  • Liechtenstein’s Foundations resembles more of a testament since this type of foundation applies hereditary rules.

4. What is the difference between a non-profit Foundation and a Private Interest Foundation?

The difference is that the Private Interest Foundation does not need the Government’s recognition, and the non-profit Foundation needs the State’s recognition.

5. Who is the Founder of a Private Interest Foundation?

The founder is the person in charge of creating the Foundation and transfers the assets to the Foundation; it can be one or several people of any nationality.

6. Can the Founder be a juridical person?

Yes. It can be a juridical person from any country in the World.

7. Can the Founder be the beneficiary of the Private Interest Foundation?

Yes. This is a strategy used for the heritage protection of the interested party.

8. What is a Nominee Founder?

This is used when the Foundation’s real founder does not want to appear in the Foundation Charter, which is a public document. In this case, a Panamanian company (acting for these purposes) from our Law Firm will appear as the Private Interest Foundation’s Founder.

9. If I choose to have a nominee Founder, how will I control the Foundation?

You will have a power of attorney in a private document to have control of the Foundation.

10. What is the Foundation Council of the Private Interest Foundation?

Is the one in charge of the management and control of this figure. Its members will represent the Foundation before third persons and the Government.

11. How many types of Foundation Councils can exist?

It can be composed of three natural persons of any nationality or by one juridical person (Foundation or Company).

12. What is the Nominee Foundation Council?

It is a figure used when the Foundation’s real managers do not want to be disclosed in any public document (Foundation Charter)? In this case, a company (acting for these purposes) of our Law Firm will appear as the Foundation Council of the Private Interest Foundation.

13. Who are the beneficiaries of a Private Interest Foundation?

These are the individuals or institutions receiving benefits from the foundation. In the Panamanian Foundations, the Beneficiary can be the Founder or any natural or juridical person of any nationality domiciled in any country in the world. It is not required to list the Foundation beneficiaries in the Foundation Charter that is a legal document registered in the Public Registry. You can list in the “Regulations” (A private document that is not registered).

14. How is the beneficiary appointed?

Law 25 of 1995 allows that the beneficiary is appointed in a private document which is the regulations. This way, the beneficiary resembles a Panamanian company’s shareholders because they are not disclosed in any public document.

15. Is it required to appoint the beneficiaries in the incorporation process?

Our law requires that the Foundation Charter has to mentions how to designate the beneficiaries. In most cases, they are designated in the Regulations (private document), which can be issued when the Founder or Foundation Council deems convenient. In other words, in practice, it doesn’t need to appoint a beneficiary immediately.

16. What are the regulations of the Foundation?

The regulations are a private document that specifies substantial information of the Foundation, such as who the beneficiaries are, their order of importance, and everything regarding the protectors (In case they have any); also establish what the Founder or Foundation Council deems appropriate concerning this figure. This document can be issued after the incorporation of the Foundation or later.

17. How private are the Regulations of the Foundation?

They are 100% private because they are not registered in any public institution in Panama.

18. Can a Private Interest Foundation exercise commercial activities?

Panamanian law establishes that a Foundation can’t exercise commercial profitable activities, but in practice, the following is common:

  • They can practice unusual or accidental commercial activities, and that the result from these activities will be used for the Foundation Charter’s established objectives.
  • They can practice any indirect commercial activities through a company.

19. Can a Foundation’s assets be seized or subject to garnishment?

Law 25 of 1995 regulates the Private Interest Foundations of Panama, and it guarantees that no assets can be seized or are subject to garnishment for the Founder’s obligations. On the other hand, they can be seized to cover the Foundation’s obligations.

20. What kind of assets can a Private Interest Foundation own?

Panama PIF can own any assets, such as shares/stocks, bonds, dividends, bank accounts, real estate, and more.

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