Private Interest Foundations in Panama are governed by Law 25 of June 12, 1995. According to this law can not carry out commercial activities, unless to do so sporadically and that serves to fulfilling its aims. Do not have members or shareholders, but are governed by a body called the Foundation Council, which manages the assets of the entity for one or more beneficiaries.

Panama has strict privacy laws. Any person or institution to obtain information relating to a foundation, including but not limited to the founding board members, protector or resident agent, must keep in strict confidence. Breach of this rule will result in financial and criminal penalties.

Goods belonging to the foundation, can not be garnished or seized for debts of its founder, board members or beneficiaries. You only need to meet their own obligations. However, the law also protects creditors against fraudulent transfers of the founder, that target non-payment of debts and obligations. Establishing a period of three years from the sale of goods, during which potential creditors can exercise their rights. After this period, the property and can not be claimed or seized.

Use of an Offshore Foundation

  1. Legal protection: The foundations are a very versatile legal tool to be used for heritage protection, estate planning, tax planning or to hold a controlling stake over other companies.
  2. Replacement of Testament: In order to avoid complicated legal process and taxes, the Foundation Board is responsible for the distribution of the assets of the estate.
  3. To distribute their assets to their heirs: According to the Panamanian Law, no one under any circumstances can freeze the foundation assets.

Foundation Structure

The creation of a Panama foundation occurs with the initial capital grant by the founder, either through payment in cash or material goods of equivalent value.

The minutes shall be recorded in the public record, when the foundation of Panama acquire full legal personality.