A private interest foundation has been created in Panama by means of Law No. 25 of June 12 of 1995, inspired on the family foundations of Liechtenstein.

The principal object of a private interest foundation is to dispose of a patrimony for a define objective or objectives, during the life of a person or when said person died.

With the private interest foundation it is possible to establish the way on which a patrimony will be divided at the time of death of a person, however, the person maintains full control and use of its patrimony during its live.

It is important to take into account that a private interest foundation can replace the figure of a testament, without the necessity of entering into a legal proceeding, since the foundation may be dissolved after the death of the founder.

The difference between a corporation and a private interest foundation is that stocks do not represent the patrimony of the said foundation, since the founder will appoint the persons that will be beneficiate with the patrimony. Additionally, said foundation cannot be engaged, directly, in commercial acts but can be the owner of stocks, properties and/or banking accounts.

The beneficiary of a private foundation may also be a corporation, or any person related or not related to the founder.

In order to constitute a private interest foundation, it is necessary to know on benefit of who has been created the foundation, and to determine a Board of Directors that will be the ones ruling the foundation at the time of death of the founder.

It is not necessary to disclose in a public documents the ones that will receive the benefits of the foundation, since said regulations made be done in a private document, once the foundation has been legally constituted.

On the other hand, our firm or a member or members of our firm may appear as the founder of the private interest foundation in the public deed, but to designate in the regulations of the foundation a Protector who will be the one with the full control of the foundation. In the event that our firm, a member or members of our firm appear as founder, it will subject to a charge of US$100.00, per person, yearly.


The approximate time to constitute a private interest foundation in Panama is three (3) working days, count as of the date of receive of the proceeding instructions.

Panamanian private interest foundations are subject to the payment of a governmental annuity fee of US$250.00, until December 31, 2005. From January 1, 2006, the governmental annuity fee for the Panamanian private interest foundations will be US$300.00, based on the enactment of our tax law.

Foundations that are incorporated between January 1st and June 30th must paid its annuity fee prior to June 30, foundations that are incorporated between July 1st and December 31st must pay its annuity fee prior to December 31st. Failure of payment of the annuity fee in due time will result in the payment of a late fee of US$50.00.

Our law provides that Panamanian foundations must have a local attorney or local law firm as a Resident Agent, which will represent the foundation before the Panamanian governmental authorities. The annual fee for this purpose is US$150.00.

The approximate cost for the constitution of a Panamanian private interest foundation is as follows:

* As of January 1, 2005, the governmental annuity fee for Panamanian private interest foundation will be US$300.00.

The annual maintenance of the foundation, is as follows:

Additionally, the costs for drafting and preparing the internal regulations will be subject to a fee of US$150.00 per hour.