Establishing Private Investment Funds in Panama: 20-FP & 50-FP Structures

Panama has emerged as an attractive and increasingly popular jurisdiction for international fund managers and investors. SCG Fund Services specializes in providing detailed guidance for establishing and managing Panama Private Funds under the 20-FP and 50-FP regulatory frameworks, ensuring clarity, efficiency, and full compliance.

Why Choose Panama for Private Investment Funds?

Panama offers distinct advantages that make it an ideal jurisdiction for private investment funds, especially under the streamlined and efficient 20-FP and 50-FP regulations:

1. Attractive Tax Environment

• Territorial tax system exempts foreign-source income.
• No capital gains, dividend, withholding, or estate taxes for offshore investors.

2. Regulatory Flexibility

• Tailored regulatory regimes designed specifically for private funds with fewer investors.
• Clear and predictable rules, facilitating rapid fund establishment and lower operational burdens.

3. Political and Economic Stability

• Robust, stable political environment fostering investor confidence.
• Strong economic growth and currency stability anchored by the US dollar.

4. Internationally Compliant and Transparent

• Compliant with global financial transparency standards (OECD, FATCA, CRS).
• Enhanced reputation from sustained efforts to strengthen AML and compliance protocols.

5. Efficient and Cost-Effective Setup

• Lower costs and streamlined administrative procedures compared to other jurisdictions.
• Reduced regulatory requirements translating to operational savings and greater efficiency.

Understanding Panama’s Private Fund Regimes: 20-FP and 50-FP

Panama has introduced specific private fund structures known as 20-FP (Private Investment Funds) and 50-FP (Qualified Investor Funds), each catering to different investor profiles and regulatory preferences.

Panama 20-FP Private Investment Funds

The 20-FP Fund structure targets small-scale private investment scenarios, making it highly appealing for family offices, private wealth management, and boutique investment ventures.

Key Features:

• Investor Limit: Up to 20 qualified investors.
• Registration Requirements:
  • Simplified registration process with the Superintendency of the Securities Market (SMV).
  • No mandatory custodian or auditor required.
• Minimum Investment: Flexible, set by the fund manager.
• Operational Flexibility: No requirement to appoint a local administrator or director, providing management ease and international flexibility.

Panama 50-FP Qualified Investor Funds

The 50-FP structure is designed for larger groups of qualified investors, offering operational flexibility while maintaining attractive regulatory simplicity and international recognition.

Key Features:

• Investor Limit: Up to 50 qualified investors.
• Registration Requirements:
  • Streamlined registration process with SMV.
  • Required to appoint a local licensed investment manager and maintain audited financial statements.
• Minimum Investment: Minimum initial investment typically set at USD 100,000 per investor.
• Enhanced Governance: Offers stronger investor confidence through mandatory audits and regulated management oversight.

Advantages of Panama 20-FP and 50-FP Fund Structures

Both fund structures offer significant advantages that position Panama as a competitive jurisdiction for private fund establishment:

Efficient Setup and Operational Costs

• Minimal bureaucratic hurdles expedite fund establishment.
• Competitive fees and ongoing compliance costs compared to other offshore jurisdictions.

Investor-Friendly Regulations

• Clear, investor-focused regulatory frameworks.
• Protection of investor privacy balanced with international compliance standards.

Global Credibility and Access

• Funds registered under respected Panamanian regulatory oversight enhance international credibility.
• Access to global markets facilitated by Panama’s strategic geographic and financial positioning.

How SCG Fund Services Assists with Your Panama Fund Setup

Our expert advisers at SCG Fund Services provide a seamless experience in establishing and managing your private fund under the Panama 20-FP and 50-FP frameworks:

1. Tailored Fund Structuring

• Customized guidance ensuring optimal structure choice based on your investor profile and objectives.

2. Regulatory Compliance

• Expert navigation of SMV registration processes.
• Continuous compliance advisory for efficient fund management.

3. Documentation and Legal Assistance

• Professional drafting and review of offering memorandum, subscription agreements, and governance documents.

4. Comprehensive Operational Support

• Ongoing assistance in compliance management, audit coordination, and financial reporting.
• Strategic advice to ensure adaptability and sustained fund performance.

Regulatory Requirements for Panama Private Funds (20-FP & 50-FP)

Understanding and adhering to Panama’s regulatory requirements ensures smooth operation and full compliance:

20-FP Requirements:

• Maximum of 20 qualified investors.
• Simplified SMV registration.
• Optional custodian and auditor.
• Minimal annual reporting obligations.

50-FP Requirements:

• Maximum of 50 qualified investors.
• Mandatory SMV registration with licensed investment manager.
• Required annual audited financial statements.
• Formal operational governance standards.

SCG Fund Services ensures all regulatory obligations are effectively managed, enabling you to concentrate on fund growth and investor relations.

Why Establish Your Private Fund in Panama with SCG Fund Services?

Choosing SCG Fund Services means partnering with industry experts dedicated to your success:

• Proven expertise in Panama fund structures (20-FP and 50-FP).
• Comprehensive support from initial setup to long-term management.
• Assurance of compliance with evolving global financial standards.
• Dedicated personalized attention and tailored strategic advice.

Download Our Comprehensive Panama Private Fund Formation Guides

Explore detailed, expert-written guides tailored specifically to the Panama 20-FP and 50-FP private fund structures. These free resources cover every step, ensuring confident and compliant fund establishment in Panama.