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Trusts in Panama

Although existing conventional guarantees have been the historically used mechanism to ensure the return of credits and interests, they are still a complex and cumbersome procedure for financial institutions.

The dynamics of the current economy require equally dynamic procedures to speed up and lower the cost of incorporating a company, transferring and executing guarantees and, thereby, save time and reduce costs.

This explains why the not-so-new law of 1984 related with the security trust has taken on so much force during the recent years in the Republic of Panama. The security trust facilitates the entrepreneur -big or small- to obtain credits and inspire confidence in financial institutions.

This possibility comes from a bank financing backed by a mechanism that allows a person (trustor) to transfer goods to another person (fiduciary) to serve as collateral for an obligation entered with a financial institution (beneficiary).

In Panama, the fiduciary, who is in charge of executing the trust, can be a financial institution or an authorized Law Office which is permanently supervised by regulatory bodies.

This is a process that gives confidence to both, directors and executives of the financial system, and organizations that fight money laundering and financing of terrorism.

Less expenses; smoother

In some way, the guarantee trust can be seen as a variant of the traditional financing scheme provided by the banks, but it has benefits as regards to legal expenses, the speed of the transaction and the execution of the security trusts.

As regards of trusts for the acquisition of vehicles and other movable properties, the benefit is it requires less procedures because the transaction does not have to be recorded in a public deed or registered in the Public Registry.

As regards any eventual breach of the obligation contracted by the trustor, the guarantees may be executed without having to carry out legal proceedings, because the assets given in the trust constitute an autonomous equity in favor of the trustee and not a credit right, as is the case with the mortgages.

Manage the capital

The agility and relative simplicity of the security trust has turned it into an increasingly popular mechanism, especially in Panama were both, banks and law offices authorized by the Superintendency of Assets can act as fiduciaries.

In essence, the security trust seeks to assure the creditor that the debtor will faithfully and punctually pay the debt and interest of the financing received through the trustee.

On his hand, the trustee is responsible for managing the assets placed under his responsibility: preparing the trust contracts, integrating the trust file, carrying out procedures before the competent authorities, registering the property of the assets, granting powers, to identify, measure and mitigate risks, etc.


Generally speaking, the trust has as many modalities as clauses the contracting parties want to include, all in the interest of Panama’s support for human development and national or foreign business efforts.

Candanedo Correa Abogados is a law firm authorized by the Superintendence of Assets to provide trust-related services. We have a team of lawyers specialized in security trusts as well as testamentary trusts, investment trust, administrative trust, etc.

We stand out thanks to our professional work, ethics, honesty, responsibility and transparency over more than twelve years of work and experience in Law and Advice. We are committed to provide an excellent service. Contact Us!