What is a Trust?

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How is a Trust created?

The Trust is a legal act by which a person called 'Trustor' transfers assets to a person called 'Trustee', to administer or dispose of them in favor of a beneficiary or 'Trust Beneficiary', which may be the Trustor itself.

The Trustee is usually a company, with trust license, professional and usually engaged in the business of managing properties, investing on liquid assets, and dispose of goods that are legally under the legitimate ownership of said trustee, but subject to the provisions of the trust instrument.

In order to transmit the authority or supremacy that the trustor has over the trust and, therefore, on the assets it manages, it is necessary to formalize a trust agreement, which is totally confidential and unavailable for third parties. Trust agreements produce effects regarding third parties since the trustor and the trustee´s signatures (or of the attorney thereof) have been authenticated by a notary public or a Panamanian Consul.

There is no standard model of a trust contract; the trust contract is structured as a "tailored suit", as required by the Trustor. The Contract establishes the conditions that must be met in order for the Trustee to proceed with the distribution of the assets and the manner, time and place where the assets will be distributed.

Trusts are not registered in the Public Registry of Panama.

There is no standard model of a trust contract; the trust contract is structured as a "tailored suit", as required by the Trustor.

Uses and Benefits

The transfer of assets to a trustee is usually done to replace the will (if any) and to carry out commercial transactions, the most common being:


  • Cash Funds
  • Family planning
  • Investment Portfolios
  • Insurance Policies
  • Share certificates
  • Guarantees (Mortgage on properties, transfer of promissory notes portfolios, transfer of cash flow, pledge on shares, among others)
  • Signing of international contracts
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Legal Structure

Parties of a Trust


The incumbent or owner (natural person or legal entity) of the present or future assets and who constitutes the trust.


Is the natural person or legal entity which has the trust license and which is professional and usually engaged to the trust; that is entrusted with the management of the transferred assets according to the will of the Trustor.


(Trust Beneficiary) is the natural person or legal entity in favor of whom the trust is created.


(Optional): The Trustor may appoint a natural person or legal entity in order to appear as protector; whose function is to monitor and safeguard the control and management of the assets given in trust to the trustee.