Glossary · Legal vehicle
Panamanian fiduciary trust
Legal vehicle regulated by Law 1 of 1984 (as amended) where a fiduciary administers assets (cash, real estate, securities) for the benefit of a third party according to the settlor's instructions. In Panamanian forestry investment, it is used for QIV and to hold a unit under collective titling while individual title subdivision is being processed.
Definition. Legal act by which a person (settlor / fideicomitente) transfers assets to a fiduciary to administer or dispose of them in favour of the beneficiary (fideicomisario), according to the trust contract's instructions.
The three parties
Settlor (fideicomitente)Transfers the assets and defines the instructions (in forestry investment: the investor or the operator).
FiduciaryLicensed entity that administers the assets (bank or fiduciary authorized by the Superintendence of Banks).
Beneficiary (fideicomisario)Final beneficiary — receives the proceeds and/or the assets once conditions are met (in forestry QIV: the investor).
Use in forestry investment
- QIV (Decree 722). The USD 300K (rising to USD 500K on Oct 15, 2026) is channelled via an authorized fiduciary trust. The fiduciary certifies the lawful origin and the qualified investment.
- Forestry subdivisions in process. While the subdivision to individual titles is being processed (Foresteak / Resolution 115-2026 case), the trust holds collective title and assigns rights to the investor.
- Asset protection. Trust assets form a separate estate from the fiduciary — protection against the fiduciary entity's bankruptcy.
Questions to ask before signing
- Who is the fiduciary? Is it authorized by Panama's Superintendence of Banks?
- What event triggers the transfer of individual title to the investor? (subdivision approval, time period, harvest, etc.)
- What happens if the fiduciary goes bankrupt or loses authorization? Is there a designated substitute fiduciary?
- What are the fiduciary's annual fees and how are they charged?
- Can I appoint a protector / supervisory committee?