The panama private interest foundation is a legal entity that was developed based on the private interest. Foundation models from three different jurisdictions including the Principality of Liechtenstein, Switzerland, and Luxembourg. The Panamanian Government carefully designed the Panama Private Interest Foundation with the intentions of creating a more modern, more flexible, and more affordable estate planning vehicle for people from around the globe. The assets of the Panama Private Interest Foundation take on a separate legal identity from the personal assets of the Founder, Protector, Council, or Beneficiaries.


Popularly know as a Panama Foundation they can also be used for Estate Planning where the Founder transfers title to current assets and has the Panama Foundation acquire Panama real estate, Panama assets and open Panama bank accounts and Panama investment accounts


According to article 27 of Law 25 of 1995, Private Interest Foundations are exempt from payment of any taxes, contributions, duties, liens or assessments of any kind arising from the acts of constitution, amendment or extinction of the same, as well as acts of transfer or encumbrance of the Foundations assets and the income arising thereof, when related to assets localized abroad; Money deposited by natural or juridical persons whose income does not derive from a Panamanian source is not taxable in Panama for any reason; Shares or securities of any kind issued by corporations which income is not derived from a Panama source, or which are not taxable for any reason, even when such shares or securities are deposited in the Republic of Panama.

The Panama Private Interest Foundation offers clear advantages for international estate planning, providing the ultimate in privacy, anonymity, and protection to the Protectors, Founders, and Beneficiaries of the Panama Foundation. The Panama Foundation is a solution to a global need for an affordable, anonymous, flexible, private, estate planning vehicle that can be used to hold Panama assets such as corporations, trusts, bank accounts, investment accounts, real estate, or any other type of asset around the world.


The only information made public are the names of the Founder, the member (s) of the Foundation Council and the name of the Protector, this last if it is so established on the Foundation Charter, as the Protector can be appointed by means of a private and confidential document.

The Foundation Regulations are for internal purposes of the Foundation and are not a matter of public records. Information regarding names of beneficiaries and of the protector and method for distribution of assets can be contained within the Regulations, thus will not be publicly disclosed.


The private foundation legislation requests that the resident agent and any other persons or institutions that, because of their functions, obtain information related to the activities, transactions or operations of the private foundation, be obligated to keep strict discretion, even after the foundation has been extinct.


Private Foundations and Trusts have clear differences:

The big difference between a trust and a foundation is the foundation is a separate judicial person. The term judicial person means an unnatural person

PIF’s are based on Civil Law and they are constituted by means of a public legal document and filed for registration, it is in fact, an existing legal entity, whereas a Trust is based on Common Law and are established by means of a private contract that does need to be filed with any government agency, it is not an existing legal entity, it is in fact a legal contract.

Another difference is that the Foundation Charter does not need to specify the rights and obligations of every party involved that can be done by means of a private and confidential document, while a Trust deed has to be very specific and clear regarding the rights and obligations of the Trustee