Even though Panama's first Trust law dates back to the year 1925, its current Trust legislation was enacted in 1984 (Law No. 1 of January 5, 1984) and is the one responsible for the development of the jurisdiction as a fiduciary services center.

The Panamanian trust or fideicomiso is a hybrid between the civil law fideicomiso and the common law trust. Although it was originally conceived as an estate planning device to facilitate the transfer of wealth from one generation to the other, the Panamanian trust has also evolved as a widely used instrument to guarantee commercial transactions. In accordance with the statistics kept by the Federation of Latin American Banks (Felaban), the country ranks first in the number of Guaranty Trusts established in the region.

Panama follows the international standards in the areas AML and the KYC and in 2012 ratified the Hague Convention for the Recognition of Trusts.