Las jurisdicciones de derecho consuetudinario han presentado legislación sobre fundaciones privadas y en cambio, las jurisdicciones de derecho civil han presentado los fideicomisos. Este presentación posee tendencias y algunos de los choques culturales que se han vivido en casos prácticos.

1. STEP LATAM - 2016
The grass is always greener
on the other side of the fence
Por:
Lic. Luis Chalhoub

2. Agenda
 Preliminary statements
 Terminology and conceptual precisions
 Anglo- Saxon trust antecedent of the fideicomiso
 Substantial differences between Anglo-Saxon trust and
fideicomiso
 Different uses of fideicomiso in Civil law countries
 Additional country factors to consider

3. Preliminary Statements
1. We will refer to Anglo-Saxon trust and fideicomiso
as legal institutions that are equivalent in use;
2. The fideicomiso presently existing in most
countries having a Civil Law system is an
adaptation of the Anglo- Saxon trust,
particularly the Anglo-American trust;
3. Both legal institutions keep substantial
differences; and
4. Fideicomiso laws in countries having a Civil Law
system and their practrical uses varies
significantly.

4. Terminology and Conceptual
Precisions
(i) Despite the fact that some countries having a Civil law system use
the word fiducia, we prefer to use the word fideicomiso to refer to
the legal institution that is used for both commercial and estate
planning;
(ii) the fideicomiso we are referring in this paper differs from the
propiedad fiduciaria (fiduciary property) and from the mandato
(mandate) or encargo fiduciario (fiduciary assignment) which are
other legal institutions regulated in Civil Codes - for non-
commercial purposes - in some Latin American countries (basically
in South American countries having a Civil Code inspired in the
Andrés Bello’s Civil Code).

5. Terminology and Conceptual
Precisions
Anlo-Saxon trust, is “an intentionally created fiduciary relationship with
regard to property in which the legal title is in the trustee, but the benefit
of ownership is in another person, the beneficiary.” (Mennell, 2007)
Fideicomiso, is “A juridical act whereby certain property is transferred by a
person named the settlor to a person named the trustee, for the purpose
of managing or disposing thereof in favor a beneficiary, who may be the
settlor himself.” (Panamanian Law No. 1 of January 5, 1984, article 1.)
“A contract by which a company (the Settlor) transfers goods or rights
to another person (the Trustee) who holds these separate from his own
property with the remit to manage the property for the benefit of one or
more Beneficiaries.” (Article 2011 of the French Civil Code)

6. The essential elements of these legal institutions are the same:
(i) the transfer of any kind of property,
(ii) the particular destination of said property,
(iii) the estalishment of duties to accomplish the particular destination
of transferred property.
Terminology and Conceptual
Precisions

7. Terminology and Conceptual
Precisions
The Roman fiducia became disused with the
appearance of the pledges, mortgages and other similar
institutions, and the fidei commissum was expressly
forbidden by Napoleon Civil Code, which inspired civil
codes in almost all countries having a Civil Law system,
and since then disappeared from the radar of all
countries having a Civil Law system.
The first trust statute enacted in a country having a
Common Law system was in the late 1880’s and the
first fideicomiso law in a country having a Civil Law
system was enacted in a Latin American country in the
mid 1920’s.
The fideicomiso is an adaptation of the Anglo- Saxon
trust and particularly Anglo-American trust.

8. Substantial Differences
The most important features that make the Common
Law trust a unique juridical institution:
(a) The distribution of property rights between the
trustee, who holds the legal title, and the beneficiaries,
who hold equitable rights, in regard to the trust estate.
(b) The possibility to create a trust by way of a simple
declaration of trust by the settlor.
(c) The possibility for a settlor to also be the trustee.
(d) The essential need to satisfy the three certainties
rule (i.e. certainty of intention, certainty of object and
certainty of subject matter) to guarantee the existence
and legal recognition of a trust and prevent its re-
characterization or annulment.
(e) The term limitations imposed by law.

9. Substantial Differences
(f) There are particular kinds of trust allowed (e.g.
implied, resulting, constructive, purpose).
(g) A variety of equitable remedies (e.g. specific
performance; injunctions; appointment of receivers)
available to beneficiaries, which guarantee them their
equitable rights in regard to trust property. Equitable
system recognized to beneficiaries some rights which
are like rights in rem since it may be exercise against
third party purchasers who knew about the existence of
trust and beneficiary rights.
(h) Precedents (case law) as opposed to enacted
legislation, as the main source of law. This is important
since trust law is of suppletory nature, meaning that it
is relevant to supply rules where the trust instrument
lacks. It must be noted that United States precedents
may differ from those of the Common Wealth
countries.

10. Substantial Differences
PANAMA
(a) Division of property rights into legal tittle, held
by trustee, and equitable tittle, held by beneficiary,
that an Anglo-Saxon trust creates, is non-existing
in the fideicomiso;
(b) beneficiaries of a fideicomiso have actions in
personam against the trustee to enforce
execution, prevent overreach or deviation of
powers, claim for damages due to breach of
duties and remove the trustee;
(c) the possibility for the settlor to also be the
trustee, which is allowed in Anglo-Saxon trust is
non- existing the fideicomiso since Civil Law
considers the self-contracting as a juridically
impossible figure;
RICARDO J. ALFARO

11. Substantial Differences
JORGE VERA ESTAÑOL
IVES LIMANTOUR
MEXICO
(d) Generally, there are no purpose and
charitable fideicomisos either, since fideicomiso
laws in countries having a Civil Law system
usually require the designation of beneficiary
(ies);
(e) different than the Anglo-Saxon trust, the
majority of countries having a Civil Law system
(not presently the case of Panama) requires that
the trustee be a juridical person having a license
granted by a regulatory entity (usually Banks);
(f) not every country having a Civil Law system
has a rule against perpetuities (e.g. Panama) and
those having said rule do not have the same
term.

12.  More commercial purposes
(i.e. activities related to banking and securities market)
 Less estate planning.
Terminology and Conceptual
Precisions
Edwin Walter Kemmerer, a US economist and Princeton
professor, influenced in several Latin American countries’
(i.e. Mexico – 1917, Guatemala -1919, Colombia-1923,
Chile -1925, Ecuador -1926, Bolivia -1928 and Peru-
1930), particularly in their tax, monetary, banking and
securities laws, and requiring the introduction of the
fideicomiso as part of banking business.
Another reason for this may be the existance of forced heirship in several Latin
American countries having a Civil Law system, which difficults the estate
planning under local fideicomiso laws.

13. Country Forced heirship and corresponding portion
Argentina 80% descendants, 66% ascendants, 50% spouse
Brazil 50% descendants, ascendants and spouse
Bolivia 80% descendants, 66% ascendants, 66% spouse
Chile 75% descendants, ascendants and spouse
Colombia 75% descendants, ascendants and spouse
Ecuador 75% descendants, 50% ascendants
Paraguay 80% descendants, 66% ascendants, 50% spouse
Peru 66% descendants and spouse, 50% ascendants
Uruguay Up to 75% descendants, 50% ascendants
Venezuela 50% descendants, ascendants and spouse
Different Uses of Fideicomiso in
Civil Law Countries

14. Uses of Trust in Latin America
The COLAFI (Trust Committe of the Federación Lationamericana de
Bancos) has some statistics about the different uses that the Latin American
countries have given to trusts:
 mortgage securitizations (e.g. Infonavit and Fovissste/ Mexico);
 infrastructure finance (e.g. ENA/ Panama, Aerodom/ Dominican
Republic, Aeropuerto Internacional de la ciudad de Mexico);
 future income securitizations (i.e. money remittances, tolls, royalties,
credit cards, (e.g. Petrobras; Pemex; Pdvsa);
 to provide public aid in emergency circumstances (e.g. to agriculture);
tourism projects (Fonatur/ Mexico).

15. USD 63
USD 43
USD 31
USD 22 USD 20
USD 14
USD 9
USD 1 USD 1
USD 79
USD 39
USD 28
USD 30
USD 19
USD 14
USD 0 USD 1 USD 0
USD 0
USD 10
USD 20
USD 30
USD 40
USD 50
USD 60
USD 70
USD 80
USD 90
Thousandofmillionsofdollars
31/12/2013 31/12/2014
Value of Assets Given in Fideicomiso
per Type
(thousand of millions of Dollars)

16. Additional Country Factors
to Consider
For our purposes, the estate planner needs to find a jurisdiction that in
general and among others offers:
(i) macro-economic, social and political stability;
(ii) well recognized and similar business and legal environment (i.e. high
professional standard, business friendly, rules for the protection of
internationally recognized investors rights);
(iii)comparatively good infrastructure support (e.g. reliable
telecommunication facilities; well regulated and solvent banking system;
accessibility by comfortable and reliable transportation means);
(iv)a convenient monetary system (e.g. having a stable currency) and a
flexible, if any, exchange control (i.e. that allow free money remittance);

17. Additional country factors
to consider
For our purposes, the estate planner needs to find a jurisdiction that in
general and among others offers…
(v) an efficient and reliable dispute resolution system (either judicial or
ADRs);
(vi) the existence of rules allowing flee clause (i.e. the possibility to change
the proper law (i.e. law governing the selected legal vehicle, in case it be
necessary).

18. Thanks
For any additional questions please
contact us to the following address:
Tel.: (507) 205-6006
E-mail: luisch@icazalaw.com
Aquilino de la Guardia N°8
IGRA Building, 5th. floor
Tel.: (507) 205 6000 Fax: (507) 269-4891

19. Warning:
The material contained in the present document have been prepared by the
autor solely for academic purposes within the STEP LATAM CONFERENCE
– PANAMA 2016, therefore it may not be used as any kind of legal advise. Any
reader must get competent advise before making decisions base in this
presentation.
The present materials may not be used with different purposes and may not be
copied or distributed in any form without previous and express authorization.
Some pictures and charts contained in this presentation have been copied for
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