Protect Your Assets in a Foundation
The Private Interest Foundation Law of Panama is based an the Panamanian Trust Law (# 1,.1994) as well as the Liechtenstein Family Foundation Law of the Principality of Liechtenstein in Europe. The Legislative Assembly has recently approved Law No. 25 of June 12, 1995, whereby private interest foundations are regulated.
A Panamanian Foundation is, in essence, very similar to a trust in its structure. A foundation is an independent legal entity with which assets may be irrevocably vested, those assets then belong to the foundation which may do with them what it pleases provided that the guidelines of the foundation charter are complied with.
Foundations should technically exist for non-profit purposes, however, a foundation may carry out commercial activities in its own right as long as the profits there are far the foundation's stated purpose, which can be very wide ranging. Alternatively, a foundation may act as a "holding company" and own shares in either a Panamanian or other national company, which in turn carry out trading activities. Again the profits derived from these trading entities must be used for the foundationās purpose.
We list below the major guidelines relating to a Panamanian Foundation which should be incorporated into the Charter:
1. The name of the foundation must include the word "Foundation" and cannot be identical or similar to another foundation in Panama. The charter can be written in any language in the Latin alphabet. Normally English or Spanish.
2. The foundation capital should be a minimum of US10.000, which can be increased subsequently by the founder of the Foundation Council or any other third party. The foundation capital is an independent property from the founder(s) cash or other assets. This sum does NOT have to be deposited into a bank account prior to the granting of the foundation charter, and the account-holding bank may be outside Panama.
3. The names and addresses of the foundation council members to which the founder can belong if he chooses. If natural persons a minimum three (3). If juridical persons a minimum of one (1). Of ANY nationality and domicile.
4. The domicile of the foundation (usually that of the resident agent).
5. The name and address of the foundation's resident agent (lawyer or law firm) who must authorize the foundation charter before its registration in the Public Registry Office.
6. The purpose of the foundation. This should be a non-profitable purpose, nevertheless commercial activities may be carried out provided they are in accordance with the general purpose. The foundation can act as a holding company provided the profits of companies held are to the benefit of the foundation. We word the purpose clause in the widest way possible.
7. The procedures used to appoint the foundationās beneficiaries, to which the founder may be included.
8. To reserve the right to modify the foundation charter by the founder when deemed convenient.
9. The duration of the foundation.
10. The destiny of the foundation assets upon liquidation.
11. The procedure for liquidation of the foundation.
12. Any other lawful clause the founder deems convenient.
Offshore Trusts and Foundations can be valuable vehicles for tax avoidance, either in a personal or a corporate role, as offshore companies can be. There are many cases where a combination of the two can be used for both tax avoidance on worldwide company income plus a means of ensuring that all those profits are centralized and can be inherited, again free of tax, by your heirs or other named people. To recap:
Protection Against Capital Gains and Inheritance Taxes
Protection of Assets against Bankruptcy and Creditors Generally
Protection Against Alimony and Maintenance Claims
Protection Against Lawsuits for Negligence and Damage Claims
Panamanian Foundations are by their very nature only established in Panama, where we have a resident law firm which carries out the Foundation structuring, registration and administration on our behalf. Due to Panamanian Foundation Law being based on Spanish Civil Law, and indeed many of the statutes written in Spanish, it is of vital importance to employ a local well versed ith this business to both interpret and administer the law in relation to Foundations.
What do we need from you?
In order to establish your Foundation in Panama, please submit the following:
The name of your Foundation (Please indicate three choices in case name is not available.)
The name of the Governors of your Foundation (Please indicate three Governors. If not indicated, we will use local nationals as Nominees at no extra cost to you.)
If you have decided to proceed, please fill out our Order Form.