Panama foundations have been around for decades, but for many, little is known about them. This page features the Panama Private Interest foundation and all the facts on its structure, the formation process, the legal requirements, the foundations advantages and the benefits. We also include the quick link to the Panama package we offer.
Offshore foundations established in Panama are governed by the Private Interest Foundations Law of Panama, Law No. 25 of June, 1995.
This structure has its own legal personality, which makes it an independent person separate from its founder, beneficiary, object, and council members.
Once created, a foundation becomes the sole, legal owners of property it receives.
Panama Private Interest Foundations are not intended for use as commercial vehicles like IBCs and LLCs; they are not profit oriented. Council members may however, from time to time, invest and undertake commercial activities in furtherance of the foundation’s purpose and objectives.
Asset Protection with Panama Offshore Foundations
Asset protection objectives defer widely depending on what it is that a founder intends to achieve; example:
- Safeguarding a company’s ownership by vesting the legal title of shares in the foundation
- Donating cash for the care of an incapacitated child for life
- Providing a regular source income to a surviving spouse or companion
- Supporting a charitable, political or religious organization
In setting out to achieve these goals with a Panama foundation, founders enable themselves to:
- Protect assets
- Distribute property (land, shares, portfolio income etc.) according to personal wishes
- Manage estate in a manner that benefits certain people or for a certain purpose
- Plan for retirement, education and other important events
- Mitigate tax liability related to property transfers
- Ensure that under-aged or incapacitated children, spouse or ‘close-friend’ are cared for
- Dispose property in order to reduce personal net worth and mitigate the risk of financial loss which may arise from creditor claims and legal damages
When ordering an offshore foundation in Panama, you are required to:
- Name the founder, one or more natural or legal persons, as the person who is directly or indirectly through a third party setting up the foundation in Panama.
- Provide details of the property or assets being transferred to the foundation; the purpose, terms of distribution and investment of which must be stated in the Charter.
- Name beneficiary/beneficiaries’, plus other relevant details
- In absence of a beneficiary, the foundation’s purpose; charity or other lawful purpose
- Submit at least 3 names of council members, along with addresses
Our company sets up offshore foundations in Panama with nominee council members only. The powers of nominee council members are limited; for more information in this regard please contact us.
Two methods of foundation formation include, a) the execution of private document by the founder bearing his signature and endorsed by a notary public at the place of formation; b) constitution directly before a notary public at the place of formation.
Where an offshore foundation in Panama is created either by public or private document, to have effect after the death of the founder, the formalities to execute wills are not applicable.
Contents of a Panama Foundation’s Charter
The Charter states the:
- personal details of the founder(s)
- proposed name of the foundation
- foundation’s purpose, or beneficiary or class of beneficiaries
- details of the registered agent and office
- value of the initial property vested in the foundation, no less than USD10,000
- rules for manner in which beneficiary is to be appointed
- provisions for modifying terms of the foundation
- name and address of council members, minimum of 3 members
- foundation’s domicile
- rights and interests of the beneficiary and council
- foundation’s duration
- provisions for the designation of a protector, his rights and duties
Get in touch with us, to receive all guidelines necessary for satisfying formation requirements for Panama offshore foundation, as well as advice to help frame your decision on the device that best suits your offshore needs.