Wealth planning · Panama
The Panama private interest foundation is governed by Law 25 of 12 June 1995, as amended in 2005, 2006 and 2013. This guide explains what it is, how it is formed, what it protects and what it does not, based on the full text of the law.
The essentials. Minimum endowment of B/.10,000 (art. 5); a Panamanian lawyer as resident agent (art. 5); legal personality upon registration (art. 9); a separate estate not subject to seizure except for its own debts, damages in pursuing its purposes and beneficiaries’ rights (art. 11); creditors may challenge fraudulent contributions for three years (art. 15); a Council of at least three members (art. 17).
| Topic | What the law says | Art. |
|---|---|---|
| Formation | One or more persons; notarized private document or before a notary | 1 and 4 |
| Charter | Name, B/.10,000 endowment, Council, resident agent, purposes, beneficiaries | 5 |
| Personality | Upon registration in the Public Registry | 9 |
| Separate estate | Not seizable except legal exceptions | 11 |
| Fraud of creditors | Challenge within 3 years | 15 |
| Revocability | Irrevocable with exceptions | 12 and 13 |
| Council and protector | Three members; optional protector; annual accounts | 17 to 20 |
| Tax | Franchise tax; exemption for foreign assets and income | 8 and 27 |
| Confidentiality | Six months’ imprisonment and B/.50,000 fine | 35 |
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Message us on WhatsAppAn estate dedicated exclusively to the purposes stated in its charter, created by one or more natural or legal persons (art. 1 of Law 25 of 1995). It may not pursue profit, but may carry out commercial activities on a non-habitual basis if the proceeds go to its purposes (art. 3).
The charter must state an initial endowment of not less than the equivalent of B/.10,000 (art. 5, no. 2), which may later be increased by the founder or by third parties (art. 1).
Name including the word 'foundation'; initial endowment; the Foundation Council with addresses; domicile; a resident agent who must be a Panamanian lawyer or law firm and who countersigns the charter; purposes; how beneficiaries are designated; reservation of the right to amend; duration; destination of assets on dissolution; other lawful clauses (art. 5). Since Law 131 of 2013 the founder may delegate his or her powers to a third party in the charter.
By private document with the founder's signature authenticated by a notary, or directly before a notary (art. 4); the charter is protocolized and registered in the Public Registry, and acquires legal personality upon registration (arts. 6 and 9).
They form a separate estate from the founder's personal assets and may not be seized or attached, except for the foundation's own obligations, damages caused in carrying out its purposes, or beneficiaries' legitimate rights (art. 11). Creditors of the founder may challenge contributions made in fraud of creditors within three years of the contribution (art. 15).
It is irrevocable unless the charter is not registered, the charter provides otherwise, or a ground for revoking donations applies (art. 12). A foundation created to take effect after the founder's death may be revoked by the founder but not by his or her heirs (art. 13).
A Foundation Council of at least three members unless it is a legal entity (art. 17), with the duties of art. 18. The charter may require prior authorization from a protector or other supervisory body (art. 19). The Council renders accounts at least annually, deemed approved after ninety days without objection (art. 20).
It pays registry fees and an annual franchise tax like corporations (art. 8, referring to art. 318-A of the Fiscal Code). Acts and income relating to assets located abroad and to money or securities whose income is not Panamanian-source are tax-exempt (art. 27 as amended by Law 6 of 2005). Panamanian-source income is taxable.
The law provides that inheritance rules of the founder's or beneficiaries' domicile are not enforceable against the foundation (art. 14) and that heirs may not revoke it (art. 13). It is not a tool to defeat creditors: contributions in fraud of creditors may be challenged for three years (art. 15).
Council members, supervisory bodies and anyone who learns of its operations must keep confidentiality, under penalty of six months' imprisonment and a B/.50,000 fine (art. 35), without prejudice to disclosures required by law and anti-money-laundering rules.
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Related: asset protection in Panama · Panama corporation · fundación de interés privado (Español)
General information based on Law 25 of 1995 (read in full in Official Gazette 22804 on 30 October 2026) as amended by Law 6 of 2005 (art. 27), Law 32 of 2006 (art. 11) and Law 131 of 2013 (art. 5). The franchise tax is governed by art. 318-A of the Fiscal Code and anti-money-laundering duties by Law 23 of 2015 as amended. It is not individual legal advice.