Panama trusts (fideicomiso) for property buyers: what the law says, who can be the trustee, and when you need one

A Panamanian trust (fideicomiso) is a written contract in which you transfer assets to a trustee that holds a license from the Superintendency of Banks, so they are managed as a separate estate for a stated purpose. You do not need one to buy property in Panama; under Decree 17 of 2026 it is one of two options only when you buy off-plan for the Qualified Investor visa.

Verified October 22, 2026 against the official texts linked in the sources.

What a fideicomiso is under Panamanian law

Panama regulates trusts in Law 1 of 1984, rewritten in large part by Law 21 of May 10, 2017 (Gaceta Oficial 28277), which also made the Superintendency of Banks the only regulator of trustees. Three roles matter: the settlor (fideicomitente) who transfers the assets, the trustee (fiduciario) who holds and manages them, and the beneficiary who receives the benefit. The settlor and the beneficiary can be the same person.

• It must be in writing. Verbal, presumed or implied trusts are void (Article 4 of Law 1, as rewritten).
• The contract must say certain things: who the settlor and trustee are, the beneficiary and substitutes (except purpose trusts), the purpose, the assets, the trustee's powers and limits, a domicile in Panama, a statement that it is made under Panamanian law, and a warning that the trustee does not guarantee the result. It also needs a resident agent in Panama, who must be a lawyer or a law firm and who countersigns the contract (Article 9). A trust missing these formalities is void (Article 12).
• The assets become a separate estate. They are independent of the settlor's, the trustee's and the beneficiary's own assets, and the trustee must keep them apart from its other business (Article 15).
• The trustee owes effort, not a result. The law says its obligations are "of means, not of result" (Article 29): it must act diligently and professionally, and it cannot promise that the purpose will be met.
• Unless the contract says otherwise, the settlor pays the costs and expenses of the trust (Article 15). The law sets no fee; it is whatever the contract and the trustee agree.

A trust can also be revocable if it says so: revocation by the settlor is one of the listed ways a trust ends (Article 33).

Who can be the trustee, and how to check

Article 12 of Law 21 allows three kinds of trustee: banks (through specialized trust departments), individuals and companies, all with a trust license from the Superintendency of Banks. State banks and companies wholly owned by the State do not need one, nor do pension-fund administrators acting in trusts the law itself orders. Only licensed trustees, and those the law authorizes, may use the words "fideicomiso" or "fiduciario" in their name or advertising (Article 21). Each trustee must keep a guarantee of B/.250,000 in favor of the Superintendency (Article 27, in the 2017 text; the Superintendency can adjust it).

You can check a trustee yourself. The Superintendency publishes its list of licensed trustees; on October 22, 2026 it showed 55. Because the State entities above are not licensed, a name missing from that list is not proof of a problem, but it is a reason to ask what law authorizes the entity. The resident agent is a lawyer: ask for the idoneidad number and check it, as in our guide on how to check a lawyer.

Expect paperwork. The law requires the trustee to identify and verify where the assets come from and to ask the settlor for what it needs to know the customer and the beneficial owner (Article 35). That is the law, not a sign of distrust.

Do you need a trust to buy property in Panama? No

No law we found requires a foreign buyer to hold a Panamanian property through a trust. You can buy directly in your own name, or through a company or foundation. The confusion has a real source: Decree 17 of September 8, 2026, which sets the Qualified Investor visa minimums, mentions trusts in two places.

• Where Decree 17 uses a trust (Article 7): when you invest through a purchase promise on a property that is not finished, you can either pay the amount into a trust at a licensed bank or trust company, which pays the promise out in full, or pay the developer in full backed by an irrevocable bank guarantee. The trust is one of two options, and it applies only to that route.
• Putting the money in a trust does not cost you "first sale" status (Article 4), which is the status that carries the lower B/.300,000 minimum rather than B/.500,000.
• For a finished property the decree measures the net value of "the property" (Articles 4 and 5) and does not ask for a trust. Our reading of the text is that it does not add several properties together, while for securities it does allow adding investments (Article 8). That is our reading, not a ruling from Migration or the Ministry of Commerce.

The decree's rules, with the source and the dates, are in our Qualified Investor case study. If someone tells you that a trust is now mandatory for all property purchases, ask them for the article that says so.

How a property trust works

A trust over a property in Panama must be made by public instrument (Article 11 of Law 1), and the transfer is registered. The trustee receives title in its name, recorded in the Public Registry "with indication of the trust it belongs to" (Article 14). For real estate in Panama, the trust takes effect against third parties from the date the transfer is registered (Article 13). The deed can be registered with partial information about the trust, but it cannot leave out the parties' general details or the purposes of the trust that relate to that property.

Trusts are also used as security for a loan: a lender can take the property in trust to secure the debt, and then the trust is tied to the loan contract. The law allows individuals to deduct up to B/.15,000 a year of interest paid under a mortgage trust on their main home, when they are co-debtors (Article 94 of Law 21, restoring section 1 of Article 709 of the Fiscal Code). That is a different use from the ownership trust this guide describes.

Many kinds of trusts, and the bank's role when you borrow

The law does not give a closed list of trust types. It defines the trust by its purpose clause (Articles 9 and 41-D of Law 1, as amended) and leaves the use to the contract, so the same tool can serve very different ends: planning an estate, holding the assets of a joint venture, managing wealth, or securing a loan. What matters for you is which one you are being offered, and what its contract says.

For a purchase with a loan, the relevant type is the guarantee trust (fideicomiso de garantía), which exists to secure an obligation; the Superintendency of Banks describes it in its training material on trusts for housing projects. The law says that in a trust meant to secure a loan the settlor chooses the trustee, who must be acceptable to the lender, and that the lender or a company of its group can be the trustee if the settlor is told and expressly accepts (last paragraph of Article 9). So a bank as trustee is normal when a bank finances the purchase, and the terms follow that loan. That comes from the loan contract and the bank's policy. We found no rule that every property purchase must go through a bank trust, and for the off-plan route in Decree 17 the text accepts "a bank or trust company" with a license.

A bank in the structure does not replace your own checks. The trustee's duty is to act diligently, not to guarantee a result, and the checks the law lists for it concern who the customer is and where the assets come from (Article 35). The title, the permits, the building's debts and the contract are still yours to verify; our due diligence guide covers them.

What it protects, and what it does not

Article 15 says trust assets cannot be seized or attached, with four exceptions: obligations incurred or damages caused in carrying out the trust, liens already placed on those assets, and third parties when the assets were transferred or withheld through fraud to their prejudice. The action to challenge a transfer into a trust expires three years after the transfer. A trust is therefore a separate estate with defined edges, not a place where a debt that already exists disappears.

On recognition, the law says a trust properly made under Panamanian law cannot be invalidated, and the settlor's capacity cannot be questioned, because the law of the settlor's home country does not recognize trusts (Article 12). That protects the trust inside Panama. How your own country treats a Panamanian trust (for taxes, reporting, inheritance or forced heirship) is decided there, and we did not review any country's rules. Ask a tax professional where you are tax resident.

What the law says about taxes

Article 41-C of Law 1, added by Law 21 (Article 115), says that putting assets into a trust is exempt from every tax, and so is returning the assets, or what is left of them, to the person who contributed them. Transfers to beneficiaries or to third parties other than that person are taxed as usual. In practice that means the line between "moving it into the trust" and "moving it out to someone else" is where tax questions start. We found no fee schedule or tax calculation in the official texts for a specific property, so confirm the cost of your case with your lawyer before signing. Property tax on the property itself is a separate matter, covered in our property tax guide.

Where people get this wrong

The usual slips are: believing a trust is required to buy property; treating it as a shield for debts that already exist; using the word "fideicomiso" for an arrangement with an unlicensed provider; signing without a resident agent who is a licensed lawyer; and assuming that because Panama recognizes the trust, so does your home country. Before you sign, our due diligence guide lists what to verify about the property, the seller and the contract.

How Proper looks at this

Proper does not sell real estate or any property product, and today it does not receive payment from the professionals it refers you to; if that changes, we'll tell you before it affects you. If you are weighing a trust, a company, or buying directly, the Clarity Session (US$300) is a private 60–90 minute call where we map your plan, what to verify and in what order, and which specialist you would need, if any.

Sources

Checked October 22, 2026.

• Law 21 of May 10, 2017, official text in the Gaceta Oficial Digital 28277 of May 12, 2017 (hosted by the tax authority) and Infojurídica record of Law 21 of 2017. Articles cited here are those of Law 21 and of the articles of Law 1 of 1984 as it rewrote them.
• Superintendencia de Bancos de Panamá: licensed trustees; Superintendencia de Bancos, 2022 banking-update session: the guarantee trust for housing projects.
• Executive Decree 17 of September 8, 2026, Gaceta Oficial 30613 (Articles 3 to 8).