Panama Private Interest Foundations

 

 

The Panama Foundation is more than just a tool to fund a philanthropy organization or center.

A Panama Private Interest Foundation is sort of a combination of a will, a trust and a corporation best of all, in a sense. Panama Foundations are more versatile and can accomplish more than Trusts plus they are anonymous. It only takes 2-3 business days to form a Panama Foundation. Panama Corporations can be formed in the same 2-3 days even if the Corporation is to be owned by the Foundation. No one owns a Panama private Interest Foundation, so you are not the owner of the Foundation, no one is according to the statutory laws of Panama. A Panama Foundation can own the shares of a Panama Anonymous Bearer Share Corporation, thus removing you from being any sort of owner of the Corporation. Now since the Corporation is owned by the Foundation and you own neither it creates a most beneficial scenario for some people. Add to this you are not the founder of record of the Foundation (we supply a founder), you appear in no public registry or database in regards to the Foundation and the Foundation can even be so created that you are not even a beneficiary, you can just be the protector which is a private position never appearing in any database or public registry. You are not a beneficiary of the Foundation which some governments could view in a similar way to the beneficiary of a trust, not an owner of the Foundation and not really a true person of control, just a protector who protects things to make sure the wishes of the foundation are fulfilled. Foundation protectors do not initiate transactions just oversee them to make sure they are consistent with the wishes of the Foundation thus they are not persons with true control over the Foundation, they just have veto power. Read below to learn more and questions are always welcome. This is serious material that needs to be studied before one can truly appreciate all the thought that went into the legislation creating the Panama Private Interest Foundation with all its subtle and not so subtle advantages that make this the most outstanding asset protection tool in the world today.

Unique Foundation Features and Benefits:

・ Anonymity: Like the Panamanian Corporation, the Private Interest Foundation provides anonymity to its beneficiaries as well as to the Founder.

・ Arbitration: The Foundation Charter may provide that any controversy arising in connection with the Foundation be resolved by arbitration, thus avoiding the public records of litigation. These provisions may also include the location and the procedural rules to be followed in arbitration.

・ Asset Protection: The assets of the Foundation cannot be used to satisfy the debts of the Founder or of the Foundation beneficiaries, such as divorce proceedings, lawsuits, bankruptcy or other liabilities. When assets have been transferred to the Foundation and out of the reach of creditors, any claims of fraudulent transfer to remove assets from the reach of creditors must be made within three years and the court wait to hear such a claim in Panama it usually five years maybe longer.

・ Capital Requirements: A minimum of assets must be transferred to the Foundation, although this need not take place immediately following establishment. There is no recording in any registry of the capital amounts other than this minimum transfer, so the sum of total assets held by the Foundation remains totally private.

・ Confidentiality: The Foundation Nominee Council Members, Registered Agent (us your law firm) and any other person that is privy to information relating to the activities, assets, transactions or operations of the Foundation are required to keep this strictly secret. In addition to civil liability for actual damages, breaches may result in imprisonment for up to six months and penalties. Panama thrives on Privacy.

・ Documents and Records: There are no requirements to file tax returns or a financial statement which means no auditing of such things. Books and accounting records may be held in Panama or abroad, you can even electronically put them up on a server in encrypted form is some part of the world where the location is only known only to you. Discovery is tough if you have no idea where the books and records are. Furthermore, the management and operation of the Foundation is not subject to the supervision of any governmental authority. No snooping, no fishing expeditions, no harassments, no Panama taxation, nothing vital in public records, anonymity for Foundation Founder and beneficiaries, etc.

・ Estate Planning Vehicle: The Panama Private Interest Foundation is a sophisticated and efficient substitute to wills, trusts etc. The Panamanian Foundation is a perfect vehicle for inter vivos or mortis causa estate planning, as it can be set up to remain in perpetuity in so far as the purposes of the Foundation continue to be met. This may prevent hereditary disputes, as well as avoiding forced heir ship rules.

・ Foundation Council Meetings: It is not necessary to hold annual meetings.

・ Founders: The Founder may be one or more natural or legal persons of any nationality. Panama law is silent on the transferability of the Founder’s rights and obligations, there is nothing to prevent the transfer of these rights and obligations from a nominee founder as registered in the Foundation Charter to the real founder by a private document, think secrecy. We normally use a Nominee Founder. It is possible for the Founder to retain certain controls with respect to the Foundation, although these should be set out clearly in the Foundation’s Bylaws. There can also be a private instruction that speaks to this subject.

・ Preservation and Administration of Assets: The Private Interest Foundation is a perfect vehicle for the preservation and administration of assets. The Foundation Charter may limit or prohibit property splitting, property transfers, the mortgaging or using of property to secure loans or other forms of financing, and regulate the general administration of the assets or business donated to the Foundation. The Foundation should be authorized to preserve, administer, and invest the assets consigned to it and to conclude all commercial and legal transactions necessary to the realization of its purposes. The Protector can play a vital role in the administration of the Foundation.

・ Revocable: Although the Foundation is generally irrevocable, there are a limited number of cases, where it is possible to revoke its establishment:

・ Before registration of the Foundation Charter.

・ When the Foundation Charter expressly provides for revocation.

・ For any of the Civil Code causes for revoking inter vivos donations.

・ Tax Advantages: The assignment, transfer or donation of assets to the Foundation is not subject to any tax under Panamanian law, neither is the organization, modification or dissolution of the Foundation. Provided it meets general requirements; income generated by assets of the Foundation is not subject to taxes, contributions, rates or liens of any kind.

Other Foundation Technical Points

・ There is no statutory requirement for a private foundation to file any annual tax return or financial statements.

・ One could set up a Panama Foundation to transfer control of assets to the surviving spouse, and one could insert instructions privately that if the surviving spouse remarried the control reverts to another family member or another person. The Panama Courts would find this completely enforceable and this is not at all unusual

・ The foundation is revocable by the founder. If a nominee founder is used private instructions can be established to transfer this control to another.

・ The foundation may be created to become effective on a certain date, on the occurrence of certain event or condition, or upon the death of the founder.

・ Detailed information about the names, percentages and other particulars regarding the beneficiaries can be included in a separate document called “Regulations or Instructions” which is of a private nature and as such does not have to be recorded at the Public Registry Office. Anonymity.

・ A foreign foundation may re-domicile in Panama through a Certificate of Continuation. By the same token, Panamanian foundations may transfer their domicile or assets to another country if so provided in the foundation charter or its Regulations.

・ The rules of “forced heir ship” of other countries will not be applied against the foundation.