Offshore Panama Corporation and Trust Services in Panama

The first trust law in Panama was adopted in the 1940's, based on the common law trust. However, in 1984 new provisions on trusts were enacted by means of Law No. 1 of January 5th, to complement other legal instruments and benefits provided by Panama as a tax haven to the international financial community.

This legislation introduced new and modern concepts to update the former law on trusts in order to make them more flexible and convenient to foreigners who were searching for a place to execute a trust overseas.

A trust is one of the most flexible existing financial mechanisms, able to handle almost any purpose, except illegal ones, of course. Its concept is based on the separation of legal ownership of the Trust assets (which rests with the Trustees) from the beneficial ownership (which rests with the beneficiaries). It has been specially designed to achieve the best asset protection.

A trust is a legal device that allows title to - and possession of - property to be held, used and/or managed by one person, the trustee, for the benefit of another different person or group, the beneficiaries.

The trust shall be created in a private document, with the only formality that the signature of settlor and trustee must be authenticated by a Panamanian Notary, so confidentiality is guaranteed. It is not necessary that the trust be executed in a public deed or be registered in any public register unless real property located in Panama is given in trust. The trust can contain any lawful clause as the needs of the settlor may require. According to articles 5 and 9 of Law No. 1, the trust may be created for any purpose provided it is not contrary to the law or public policy.

A trust is a special type of contract (recognised by law) between the settlor and the trustees.

The person who creates a trust, called the settlor, donor or grantor, transfers assets owned by him or her with specific instructions, legally binding for the trustees, that the trustees should hold the trust fund upon prescribed terms for the benefit of a named person or other: the beneficiaries.