In my previous blog entry, I highlighted Panama as an attractive hub for Web3 companies. One of the key reasons is a legal structure that has been part of Panama’s framework for over 30 years: the Fundación de Interés Privado (Private Interest Foundation, or PIF). Private Interest Foundations were originally designed for estate and asset planning, but in recent years, they have gained popularity among blockchain-based projects due to the unique legal features of their regime.
Important Features
PIFs possess their own legal personality and a completely independent patrimony, allowing the project’s assets to be fully separated from the personal assets of founders or developers. This patrimony remains shielded from the personal creditors of founders, council members, or beneficiaries. Furthermore, their structure enables absolute segregation of assets, neutral administration of digital treasuries, custody of governance keys, and the organization of internal processes without the need for public registry disclosure, ensuring confidentiality.
As an independent legal entity, a Private Interest Foundation can acquire and own property, incur obligations, and participate in any judicial or administrative proceedings. However, it must limit itself to non-profit activities. Nevertheless, the Private Interest Foundation may carry out commercial operations from time to time when necessary to pursue its object and purposes, which may include holding an investment portfolio. This limitation does not extend to the companies or businesses owned by the foundation.
Tax Benefits
Panama’s territorial tax system exempts foreign-sourced income (including most blockchain revenues, crypto gains, or international token distributions) from local taxation. Particularly, PIFs incur only modest annual fees of US$400 after the first year of being constituted. Moreover, Panama’s dollarized economy reduces currency risk, providing monetary stability that appeals to global crypto investors.
In the context of Web3 and DAOs, these features make PIFs an efficient wrapper: they provide legal personality to otherwise unincorporated decentralized structures, enable secure treasury and IP holding, facilitate banking access, and support token issuance or governance without compromising privacy or exposing personal liability. This has positioned Panama as a favored jurisdiction for many blockchain initiatives seeking asset protection, tax neutrality, and operational flexibility in Latin America.
Ready to make Panama the home for your Web3 company?
Contact me at gloria@campbellteague.com.
