Panama
Panama is a well-established financial center, known for its territorial tax system, under which foreign-sourced income is tax-free. This makes it a highly attractive jurisdiction for international business, trusts, and wealth management. With a stable legal framework and a strong banking sector, Panama has been a preferred choice for high-net-worth individuals and corporations seeking privacy and asset protection.
Panama’s trust law allows for flexible estate planning and wealth preservation, with strong confidentiality protections. Additionally, private interest foundations provide an alternative to trusts, particularly for families looking for secure multigenerational wealth planning. These foundations offer legal separation of assets while allowing the founder to maintain control over administration.
Advantages of Panama as a Fiduciary and Tax Jurisdiction:
No tax on foreign-sourced income, ensuring tax efficiency for international businesses.
Strong trust laws, providing asset protection and estate planning benefits.
Private interest foundations, allowing for structured wealth management.
Confidentiality protections, with no public disclosure of trust or foundation beneficiaries.
Efficient company incorporation, with minimal reporting requirements.
Well-developed banking and financial sector, supporting international clients.
Potential Considerations:
International scrutiny, as Panama has faced regulatory challenges in the past.
Stricter compliance requirements, with AML and KYC obligations increasing.
Limited tax treaties, which may impact certain international tax planning strategies.
Substance requirements for some business structures, requiring careful planning.
Panama remains a strong option for fiduciary services, particularly for those seeking privacy and tax efficiency. However, due to evolving global regulations, proper legal and financial advice is necessary to ensure compliance while maximizing the benefits of Panama’s structures.