A Foundation of Private interest or Private Foundation (“Foundation”) has a unique creation process and begins when one or more natural persons or legal entities such a as a corporation of any nationality (“Founder (s)”) creates before a notary a document known as a “Foundation Charter”, or Articles of Incorporation which is registered at the Public Registry of Panama, at this moment the parties undertake to provide the Foundation with a donation or initial (“Foundation Assets”) which can be from 1.00 USD , but the common amount is US$10,000 (which may be subsequently increased as it is not necessarily a paid in amount) to be managed by a “Foundation Council” which can be supervised by a “protector”, if appointed. A protector can be a member of an accounting firm, and individual or any person that the founder so decides.

Further donations, in any type, money or in assets are not subject to a limited to any tax or deadline. Panama Foundation does not have any legal requirement of disclosure. Upon registration in the Public Registry, the Foundation will exist as a legal entity.

A Private Foundation is considered as a result of a merge, between a Company and a Trust. One of its main similarities is that both are established by registering them at the Public Registry, therefore they obtain public visibility but limited to the content of the articles of association.

Assets that are donated or transferred into the Private Foundation are not of public domain, they are not registered in any public office, thus remain a private notarized document to be kept in custody between the Founder, Protector and Beneficiaries. In other words, it is a Trust Deed that remains confidential.

Like a company, Private Interest Foundation is a separate legal entity (that is it can hold property & sue and be sued in its own right) and its operations are governed by a Charter and Regulations (similar to the Memorandum and Articles of Association of a company). Usually a Private Interest Foundation can only be used as an asset holding entity (though it can carry out certain commercial functions depending on its country of registration).


The day to day management of a PIF is overseen by a Councillor or a Council (like a board of directors in the case of a company). However instead of shares a Foundation, like a Trust, has Beneficiaries who are ultimately entitled to the assets and income of the Foundation. Importantly the creator of the Foundation (usually called a “Founder”– see below) can still steer the direction of the Foundation post registration by being appointed as a Financial Adviser or Protector. Additionally the Founder can have certain powers reserved to him from the outset (eg the rights to appoint or remove Councillors, to exclude or change Beneficiaries or to appoint and remove Protectors).

Private Interest Foundations vs Trusts

The key difference between a Foundation and a Trust is that in the case of a Foundation the legal owner of the Foundation’s assets is the Foundation itself, a separate legal entity (usually) based in a nil tax jurisdiction. This is different to the situation of a Trust where the underling owner of trust assets are the (presently entitled) beneficiaries. This can have a significant impact in terms of tax liability.