Private Interest Foundations and Law 526: What the Family Office Client Needs to Know | EDTIJ<\/title>\n<meta name=\"description\" content=\"Law 526 changed Panama's tax landscape, but the Private Interest Foundation remains a valid patrimonial planning tool \u2014 when used correctly. Here is the analysis.\">\n<\/head>\n<body style=\"margin:0; padding:0; background-color:#FAFAF8; font-family:Georgia, 'Times New Roman', serif; color:#3A3330;\">\n\n<article style=\"max-width:760px; margin:0 auto; padding:60px 32px;\">\n\n \n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin-bottom:20px;\">\n Patrimonial Planning \u00b7 June 2026\n <\/div>\n\n \n <h1 style=\"font-family:Georgia, serif; font-size:34px; font-weight:normal; color:#3A3330; line-height:1.25; letter-spacing:0.5px; margin:0 0 16px 0;\">\n Private Interest Foundations and Law 526: What the Family Office Client Needs to Know\n <\/h1>\n\n \n <p style=\"font-family:Georgia, serif; font-size:17px; color:#7A706A; font-style:italic; line-height:1.6; margin:0 0 32px 0;\">\n Law 526 changed Panama’s tax landscape, but it did not eliminate patrimonial planning tools. The Private Interest Foundation remains valid \u2014 when you understand its position in the new framework.\n <\/p>\n\n \n <div style=\"border-top:2px solid #B8976A; width:60px; margin-bottom:36px;\"><\/div>\n\n \n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The enactment of <strong>Law No. 526<\/strong> on May 28, 2026 generated an understandable reaction among many patrimonial planning clients: concern about their Panamanian structures, uncertainty about whether to restructure, and questions about Panama’s future as a jurisdiction for family wealth protection.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The concern is reasonable. But the conclusion that “we need to leave Panama” or “the Private Interest Foundation no longer works” is, in most cases, premature and incorrect.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 36px 0;\">\n What Law 526 does require is an honest conversation between the client and their lawyer about <em>what the structure actually does<\/em>, <em>what income it generates<\/em>, and <em>what patrimonial objectives it serves<\/em>. That conversation \u2014 not panic \u2014 is the correct response.\n <\/p>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The Panamanian Private Interest Foundation: what it is and why it’s used<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The Private Interest Foundation (Fundaci\u00f3n de Inter\u00e9s Privado, or FIP) is an instrument created by Law 25 of 1995, unique to Panamanian law. It is neither a corporation nor a trust, though it shares elements with both. It is an independent legal person, without shareholders, whose assets are dedicated to the purposes the founder establishes in its constitutive charter.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The reasons family office clients use the FIP go well beyond tax treatment:\n <\/p>\n\n <div style=\"background-color:#F2EDE8; border-left:3px solid #B8976A; padding:20px 24px; margin-bottom:20px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#3A3330; margin-bottom:14px;\">Why the FIP is used<\/div>\n <div style=\"font-size:14px; line-height:2.1; color:#4A4440;\">\n \u2014 <strong>Asset protection:<\/strong> the foundation’s assets are separated from the founder’s personal assets and, in principle, from their creditors<br>\n \u2014 <strong>Succession planning:<\/strong> allows the founder to define beneficiaries, conditions, and timing of asset distribution<br>\n \u2014 <strong>Control:<\/strong> the founder can retain management powers without formal ownership of the assets<br>\n \u2014 <strong>Privacy:<\/strong> does not require public disclosure of beneficiaries in most circumstances<br>\n \u2014 <strong>Continuity:<\/strong> survives the founder’s death without the need for formal probate proceedings\n <\/div>\n <\/div>\n\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n These objectives \u2014 protection, succession, control, privacy, continuity \u2014 do not disappear with Law 526. What changes is the analysis of <em>whether the FIP falls within the scope<\/em> of the law, and whether that scope has tax consequences the client needs to understand.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The FIP and Law 526: three possible scenarios<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 24px 0;\">\n How a FIP is treated under Law 526 depends on two factors: <strong>what is above it<\/strong> (who controls it?) and <strong>what is below it<\/strong> (what assets does it hold? does it own foreign entities?).\n <\/p>\n\n \n <div style=\"margin-bottom:24px; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#5A8A6A; font-weight:bold; margin-bottom:12px;\">Scenario 1 \u00b7 Likely Out of Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Natural person \u2192 Panamanian FIP \u2192 investment portfolios or foreign deposits (no foreign subsidiaries)\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n The FIP is a Panamanian entity. The founder is a natural person. There is no second entity in another jurisdiction controlling the FIP. If the foundation’s assets consist of direct financial investments \u2014 listed shares, bonds, bank accounts abroad \u2014 without the FIP owning foreign corporate entities, a multinational group <strong>probably does not exist<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, Law 526 likely <strong>does not apply<\/strong> and the FIP retains its current position without needing to demonstrate economic substance.\n <\/p>\n <\/div>\n\n \n <div style=\"margin-bottom:24px; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8604A; font-weight:bold; margin-bottom:12px;\">Scenario 2 \u00b7 Within Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Natural person \u2192 Panamanian FIP \u2192 shares in foreign companies \u2192 dividends and foreign income\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n If the FIP holds shares or equity stakes in foreign companies and receives dividends or other passive income from them, the FIP and those foreign entities configure a multinational group: two legal entities in different jurisdictions connected by ownership. Law 526 <strong>applies<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, the lawyer must assess whether the FIP can demonstrate economic substance, or whether the structure’s architecture should be reconsidered \u2014 but <em>that does not necessarily mean eliminating the FIP<\/em>. It may mean adjusting which assets sit inside it.\n <\/p>\n <\/div>\n\n \n <div style=\"margin-bottom:0; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8604A; font-weight:bold; margin-bottom:12px;\">Scenario 3 \u00b7 Within Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Foreign trust \u2192 Panamanian FIP \u2192 assets and investments\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n When a foreign trust sits above the Panamanian FIP \u2014 a structure some international advisors recommend for privacy or cross-border succession planning purposes \u2014 the trust is a legal entity in another jurisdiction that controls the FIP. That configures a multinational group. Law 526 <strong>applies<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, the analysis should consider whether the cost of the additional trust layer remains justified in the new tax environment, or whether the structure can be simplified.\n <\/p>\n <\/div>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">What does not change: the patrimonial value of the FIP<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n Even in scenarios where Law 526 applies, the FIP does not lose its value as a patrimonial tool. What changes is the tax cost of certain income \u2014 not the utility of the structure for the purposes for which it was created.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n If a FIP was established to protect family assets from potential creditors, ensure patrimonial continuity on the founder’s death, or establish a distribution order among beneficiaries across generations \u2014 those objectives remain valid. And the FIP remains one of the most effective instruments for achieving them within Panamanian law.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n The decision to restructure, adjust, or maintain the FIP must be based on a complete analysis of the client’s objectives \u2014 not on an automatic reaction to the enactment of Law 526.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The questions the family office client should ask<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The productive conversation with a patrimonial lawyer right now is not “does Law 526 affect me?” but a set of more precise questions:\n <\/p>\n\n <div style=\"background-color:#F2EDE8; border-left:3px solid #B8976A; padding:20px 24px; margin-bottom:20px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#3A3330; margin-bottom:16px;\">The four questions of the patrimonial diagnostic<\/div>\n <table style=\"width:100%; border-collapse:collapse;\">\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">1<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What is inside the FIP?<\/strong> Direct financial assets or equity stakes in foreign companies? This determines the scenario.<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">2<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What is above the FIP?<\/strong> Is the founder the only natural person, or is there a trust or other entity above it?<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">3<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What foreign income does the FIP generate?<\/strong> Dividends from subsidiaries? Interest? Capital gains from a portfolio? The nature of the income determines the scope.<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">4<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What objectives does the FIP serve that cannot be achieved otherwise?<\/strong> Protection, succession, privacy, control. Those objectives weigh heavily in the restructuring decision.<\/td>\n <\/tr>\n <\/table>\n <\/div>\n\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n With those four answers on the table, the lawyer can formulate an informed recommendation \u2014 not a generic one, but one specific to that client’s structure and objectives.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The time to act is now<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The implementing regulations for Law 526 \u2014 expected before the end of August 2026 \u2014 will define specific application criteria. But the patrimonial diagnostic described above does not depend on those regulations. What is inside the FIP, what is above it, and what income it generates \u2014 that the client knows today, and a lawyer can analyze today.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n The client who begins this conversation now has time to make decisions calmly. The one who waits until December 2026 will make the same decisions under pressure.\n <\/p>\n <\/div>\n\n \n <div style=\"background-color:#3A3330; padding:36px 40px; margin-top:8px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin-bottom:14px;\">At EDTIJ<\/div>\n <p style=\"font-family:Georgia, serif; font-size:16px; color:#ffffff; line-height:1.6; margin:0 0 16px 0; font-style:italic;\">\n “We know our clients’ structures. That is why we can go straight to the right question: is this FIP within the scope of Law 526? And what do we do if it is?”\n <\/p>\n <p style=\"font-size:14px; color:#C9BEB8; line-height:1.8; margin:0 0 16px 0;\">\n If you have a Private Interest Foundation or other patrimonial structure in Panama and want to understand its position under Law 526, we are available for the analysis.\n <\/p>\n <p style=\"font-size:14px; color:#B8976A; margin:0;\">\n <strong>mdellat@edtij.com \u00b7 +507-340-6324 \u00b7 edtij.com<\/strong>\n <\/p>\n <\/div>\n\n \n <div style=\"margin-top:40px; padding-top:24px; border-top:1px solid #D9D4CC;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8976A; margin-bottom:8px;\">Author<\/div>\n <div style=\"font-size:14px; font-weight:bold; color:#3A3330;\">Marisel Della Togna<\/div>\n <div style=\"font-size:13px; color:#7A706A; margin-top:2px;\">Partner \u2014 EDTIJ \u00b7 Escobar, Della Togna, Icaza & Jurado<\/div>\n <div style=\"font-size:13px; color:#B8976A; margin-top:4px;\">mdellat@edtij.com<\/div>\n <\/div>\n\n \n <div style=\"margin-top:32px; font-family:Arial, sans-serif; font-size:11px; color:#A09590; line-height:1.7; border-top:1px solid #EDEAE5; padding-top:20px;\">\n <em>This article is for general informational purposes only and does not constitute legal advice. The specific analysis of each Private Interest Foundation requires an individualized review of its structure, assets, and patrimonial objectives. Conclusions are subject to the pending Executive regulations of Law 526, expected before the end of August 2026.<\/em>\n <\/div>\n\n<\/article>\n<\/body>\n<\/html>\n\n","protected":false},"excerpt":{"rendered":"<p>Patrimonial Planning \u00b7 June 2026 Private Interest Foundations and Law 526: What the Family Office Client Needs to Know | EDTIJ Patrimonial Planning \u00b7 June 2026 Private Interest Foundations and Law 526: What the Family Office Client Needs to Know Law 526 changed Panama’s tax landscape, but it did not eliminate patrimonial planning tools. The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[14,20,10,12,19],"class_list":["post-3285","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-international-business","tag-ley526","tag-offshore","tag-panama","tag-sustanciaeconomica"],"yoast_head":"\n<title>Private Interest Foundations and Law 526: What the Family Office Client Needs to Know -<\/title>\n<meta name=\"description\" content=\"Law 526 is in effect and family office clients are asking: does it affect my Private Interest Foundation? 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{"id":3285,"date":"2026-06-20T19:28:20","date_gmt":"2026-06-21T00:28:20","guid":{"rendered":"https:\/\/www.edtij.com\/en\/?p=3285"},"modified":"2026-06-20T19:28:22","modified_gmt":"2026-06-21T00:28:22","slug":"private-interest-foundation-law-526-patrimonial-planning","status":"publish","type":"post","link":"https:\/\/www.edtij.com\/en\/private-interest-foundation-law-526-patrimonial-planning\/","title":{"rendered":"Private Interest Foundations and Law 526: What the Family Office Client Needs to Know"},"content":{"rendered":"\n

Patrimonial Planning \u00b7 June 2026<\/p>\n\n\n\n\n\n\n\n\nPrivate Interest Foundations and Law 526: What the Family Office Client Needs to Know | EDTIJ<\/title>\n<meta name=\"description\" content=\"Law 526 changed Panama's tax landscape, but the Private Interest Foundation remains a valid patrimonial planning tool \u2014 when used correctly. Here is the analysis.\">\n<\/head>\n<body style=\"margin:0; padding:0; background-color:#FAFAF8; font-family:Georgia, 'Times New Roman', serif; color:#3A3330;\">\n\n<article style=\"max-width:760px; margin:0 auto; padding:60px 32px;\">\n\n \n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin-bottom:20px;\">\n Patrimonial Planning \u00b7 June 2026\n <\/div>\n\n \n <h1 style=\"font-family:Georgia, serif; font-size:34px; font-weight:normal; color:#3A3330; line-height:1.25; letter-spacing:0.5px; margin:0 0 16px 0;\">\n Private Interest Foundations and Law 526: What the Family Office Client Needs to Know\n <\/h1>\n\n \n <p style=\"font-family:Georgia, serif; font-size:17px; color:#7A706A; font-style:italic; line-height:1.6; margin:0 0 32px 0;\">\n Law 526 changed Panama’s tax landscape, but it did not eliminate patrimonial planning tools. The Private Interest Foundation remains valid \u2014 when you understand its position in the new framework.\n <\/p>\n\n \n <div style=\"border-top:2px solid #B8976A; width:60px; margin-bottom:36px;\"><\/div>\n\n \n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The enactment of <strong>Law No. 526<\/strong> on May 28, 2026 generated an understandable reaction among many patrimonial planning clients: concern about their Panamanian structures, uncertainty about whether to restructure, and questions about Panama’s future as a jurisdiction for family wealth protection.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The concern is reasonable. But the conclusion that “we need to leave Panama” or “the Private Interest Foundation no longer works” is, in most cases, premature and incorrect.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 36px 0;\">\n What Law 526 does require is an honest conversation between the client and their lawyer about <em>what the structure actually does<\/em>, <em>what income it generates<\/em>, and <em>what patrimonial objectives it serves<\/em>. That conversation \u2014 not panic \u2014 is the correct response.\n <\/p>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The Panamanian Private Interest Foundation: what it is and why it’s used<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The Private Interest Foundation (Fundaci\u00f3n de Inter\u00e9s Privado, or FIP) is an instrument created by Law 25 of 1995, unique to Panamanian law. It is neither a corporation nor a trust, though it shares elements with both. It is an independent legal person, without shareholders, whose assets are dedicated to the purposes the founder establishes in its constitutive charter.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The reasons family office clients use the FIP go well beyond tax treatment:\n <\/p>\n\n <div style=\"background-color:#F2EDE8; border-left:3px solid #B8976A; padding:20px 24px; margin-bottom:20px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#3A3330; margin-bottom:14px;\">Why the FIP is used<\/div>\n <div style=\"font-size:14px; line-height:2.1; color:#4A4440;\">\n \u2014 <strong>Asset protection:<\/strong> the foundation’s assets are separated from the founder’s personal assets and, in principle, from their creditors<br>\n \u2014 <strong>Succession planning:<\/strong> allows the founder to define beneficiaries, conditions, and timing of asset distribution<br>\n \u2014 <strong>Control:<\/strong> the founder can retain management powers without formal ownership of the assets<br>\n \u2014 <strong>Privacy:<\/strong> does not require public disclosure of beneficiaries in most circumstances<br>\n \u2014 <strong>Continuity:<\/strong> survives the founder’s death without the need for formal probate proceedings\n <\/div>\n <\/div>\n\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n These objectives \u2014 protection, succession, control, privacy, continuity \u2014 do not disappear with Law 526. What changes is the analysis of <em>whether the FIP falls within the scope<\/em> of the law, and whether that scope has tax consequences the client needs to understand.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The FIP and Law 526: three possible scenarios<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 24px 0;\">\n How a FIP is treated under Law 526 depends on two factors: <strong>what is above it<\/strong> (who controls it?) and <strong>what is below it<\/strong> (what assets does it hold? does it own foreign entities?).\n <\/p>\n\n \n <div style=\"margin-bottom:24px; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#5A8A6A; font-weight:bold; margin-bottom:12px;\">Scenario 1 \u00b7 Likely Out of Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Natural person \u2192 Panamanian FIP \u2192 investment portfolios or foreign deposits (no foreign subsidiaries)\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n The FIP is a Panamanian entity. The founder is a natural person. There is no second entity in another jurisdiction controlling the FIP. If the foundation’s assets consist of direct financial investments \u2014 listed shares, bonds, bank accounts abroad \u2014 without the FIP owning foreign corporate entities, a multinational group <strong>probably does not exist<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, Law 526 likely <strong>does not apply<\/strong> and the FIP retains its current position without needing to demonstrate economic substance.\n <\/p>\n <\/div>\n\n \n <div style=\"margin-bottom:24px; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8604A; font-weight:bold; margin-bottom:12px;\">Scenario 2 \u00b7 Within Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Natural person \u2192 Panamanian FIP \u2192 shares in foreign companies \u2192 dividends and foreign income\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n If the FIP holds shares or equity stakes in foreign companies and receives dividends or other passive income from them, the FIP and those foreign entities configure a multinational group: two legal entities in different jurisdictions connected by ownership. Law 526 <strong>applies<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, the lawyer must assess whether the FIP can demonstrate economic substance, or whether the structure’s architecture should be reconsidered \u2014 but <em>that does not necessarily mean eliminating the FIP<\/em>. It may mean adjusting which assets sit inside it.\n <\/p>\n <\/div>\n\n \n <div style=\"margin-bottom:0; padding:24px; border:1px solid #D9D4CC; background-color:#FFFFFF;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8604A; font-weight:bold; margin-bottom:12px;\">Scenario 3 \u00b7 Within Scope<\/div>\n <p style=\"font-size:14.5px; font-weight:bold; color:#3A3330; margin:0 0 10px 0;\">\n Foreign trust \u2192 Panamanian FIP \u2192 assets and investments\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 10px 0;\">\n When a foreign trust sits above the Panamanian FIP \u2014 a structure some international advisors recommend for privacy or cross-border succession planning purposes \u2014 the trust is a legal entity in another jurisdiction that controls the FIP. That configures a multinational group. Law 526 <strong>applies<\/strong>.\n <\/p>\n <p style=\"font-size:14px; line-height:1.85; color:#4A4440; margin:0 0 0 0;\">\n In this scenario, the analysis should consider whether the cost of the additional trust layer remains justified in the new tax environment, or whether the structure can be simplified.\n <\/p>\n <\/div>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">What does not change: the patrimonial value of the FIP<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n Even in scenarios where Law 526 applies, the FIP does not lose its value as a patrimonial tool. What changes is the tax cost of certain income \u2014 not the utility of the structure for the purposes for which it was created.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n If a FIP was established to protect family assets from potential creditors, ensure patrimonial continuity on the founder’s death, or establish a distribution order among beneficiaries across generations \u2014 those objectives remain valid. And the FIP remains one of the most effective instruments for achieving them within Panamanian law.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n The decision to restructure, adjust, or maintain the FIP must be based on a complete analysis of the client’s objectives \u2014 not on an automatic reaction to the enactment of Law 526.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The questions the family office client should ask<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The productive conversation with a patrimonial lawyer right now is not “does Law 526 affect me?” but a set of more precise questions:\n <\/p>\n\n <div style=\"background-color:#F2EDE8; border-left:3px solid #B8976A; padding:20px 24px; margin-bottom:20px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#3A3330; margin-bottom:16px;\">The four questions of the patrimonial diagnostic<\/div>\n <table style=\"width:100%; border-collapse:collapse;\">\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">1<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What is inside the FIP?<\/strong> Direct financial assets or equity stakes in foreign companies? This determines the scenario.<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">2<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What is above the FIP?<\/strong> Is the founder the only natural person, or is there a trust or other entity above it?<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">3<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What foreign income does the FIP generate?<\/strong> Dividends from subsidiaries? Interest? Capital gains from a portfolio? The nature of the income determines the scope.<\/td>\n <\/tr>\n <tr>\n <td style=\"font-family:Arial, sans-serif; font-size:13px; font-weight:bold; color:#B8976A; padding:8px 16px 8px 0; white-space:nowrap; vertical-align:top;\">4<\/td>\n <td style=\"font-size:14px; color:#4A4440; line-height:1.7; padding:8px 0;\"><strong>What objectives does the FIP serve that cannot be achieved otherwise?<\/strong> Protection, succession, privacy, control. Those objectives weigh heavily in the restructuring decision.<\/td>\n <\/tr>\n <\/table>\n <\/div>\n\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n With those four answers on the table, the lawyer can formulate an informed recommendation \u2014 not a generic one, but one specific to that client’s structure and objectives.\n <\/p>\n <\/div>\n\n \n <h2 style=\"font-family:Arial, sans-serif; font-size:11px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin:0 0 12px 0;\">The time to act is now<\/h2>\n <div style=\"border-top:1px solid #D9D4CC; padding-top:20px; margin-bottom:32px;\">\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 20px 0;\">\n The implementing regulations for Law 526 \u2014 expected before the end of August 2026 \u2014 will define specific application criteria. But the patrimonial diagnostic described above does not depend on those regulations. What is inside the FIP, what is above it, and what income it generates \u2014 that the client knows today, and a lawyer can analyze today.\n <\/p>\n <p style=\"font-size:15px; line-height:1.9; color:#4A4440; margin:0 0 0 0;\">\n The client who begins this conversation now has time to make decisions calmly. The one who waits until December 2026 will make the same decisions under pressure.\n <\/p>\n <\/div>\n\n \n <div style=\"background-color:#3A3330; padding:36px 40px; margin-top:8px;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:3px; text-transform:uppercase; color:#B8976A; margin-bottom:14px;\">At EDTIJ<\/div>\n <p style=\"font-family:Georgia, serif; font-size:16px; color:#ffffff; line-height:1.6; margin:0 0 16px 0; font-style:italic;\">\n “We know our clients’ structures. That is why we can go straight to the right question: is this FIP within the scope of Law 526? And what do we do if it is?”\n <\/p>\n <p style=\"font-size:14px; color:#C9BEB8; line-height:1.8; margin:0 0 16px 0;\">\n If you have a Private Interest Foundation or other patrimonial structure in Panama and want to understand its position under Law 526, we are available for the analysis.\n <\/p>\n <p style=\"font-size:14px; color:#B8976A; margin:0;\">\n <strong>mdellat@edtij.com \u00b7 +507-340-6324 \u00b7 edtij.com<\/strong>\n <\/p>\n <\/div>\n\n \n <div style=\"margin-top:40px; padding-top:24px; border-top:1px solid #D9D4CC;\">\n <div style=\"font-family:Arial, sans-serif; font-size:10px; letter-spacing:2px; text-transform:uppercase; color:#B8976A; margin-bottom:8px;\">Author<\/div>\n <div style=\"font-size:14px; font-weight:bold; color:#3A3330;\">Marisel Della Togna<\/div>\n <div style=\"font-size:13px; color:#7A706A; margin-top:2px;\">Partner \u2014 EDTIJ \u00b7 Escobar, Della Togna, Icaza & Jurado<\/div>\n <div style=\"font-size:13px; color:#B8976A; margin-top:4px;\">mdellat@edtij.com<\/div>\n <\/div>\n\n \n <div style=\"margin-top:32px; font-family:Arial, sans-serif; font-size:11px; color:#A09590; line-height:1.7; border-top:1px solid #EDEAE5; padding-top:20px;\">\n <em>This article is for general informational purposes only and does not constitute legal advice. The specific analysis of each Private Interest Foundation requires an individualized review of its structure, assets, and patrimonial objectives. Conclusions are subject to the pending Executive regulations of Law 526, expected before the end of August 2026.<\/em>\n <\/div>\n\n<\/article>\n<\/body>\n<\/html>\n\n","protected":false},"excerpt":{"rendered":"<p>Patrimonial Planning \u00b7 June 2026 Private Interest Foundations and Law 526: What the Family Office Client Needs to Know | EDTIJ Patrimonial Planning \u00b7 June 2026 Private Interest Foundations and Law 526: What the Family Office Client Needs to Know Law 526 changed Panama’s tax landscape, but it did not eliminate patrimonial planning tools. The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[14,20,10,12,19],"class_list":["post-3285","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-international-business","tag-ley526","tag-offshore","tag-panama","tag-sustanciaeconomica"],"yoast_head":"\n<title>Private Interest Foundations and Law 526: What the Family Office Client Needs to Know -<\/title>\n<meta name=\"description\" content=\"Law 526 is in effect and family office clients are asking: does it affect my Private Interest Foundation? 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