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
- 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.
- 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.
- To distribute their assets to their heirs: According to the Panamanian Law, no one under any circumstances can freeze the foundation assets.
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 founder (either real or trustee) shall appoint the foundation council, which is the body that manages the assets of the entity. It is important to know that the founder does not own the Foundation and that they figure there is no owner as there is in the Corporations.
- Foundation Council: shall be composed of at least three natural or legal person. There are no restrictions on nationality and the founder himself, if you wish, you can be part of it. It should be noted that in this case your name will also appear in public records.
- Resident agent: who is an attorney or law firm that serves as interlocutor with the authorities and is responsible for receiving official correspondence. Often, the foundation also provides virtual office services and serves the business name.
- Founding Act: The most important document of the foundation and contains the following information:
- Name and address of the foundation.
- Name and contact details of the founding board members.
- Name and address of resident agent.
- Description of the founding capital.
- Mention the purpose or purposes of the foundation.
- How to designate beneficiaries.
- The duration of the foundation, temporarily or permanently limited.
- The disposition of property upon dissolution of the foundation.
- The clause or amendment of the minutes revoación funacional reserved for the founder.
- Other terms at the option of the founder.
- Regulation: The names and particulars of the division of property, can be collected in a separate and private. The founder, if desired, naming himself as beneficiary.
The minutes shall be recorded in the public record, when the foundation of Panama acquire full legal personality.
- The minimum capital to form a Panama foundation is 10 000 dollars (equivalent to the same amount in dollars) only, and that capital is not necessary to disburse at the time of the constitution, but can be provided later.
- Are free from paying taxes on that income from outside the Republic of Panama.
- The assets that comprise the assets of the foundation are not liable for personal debts or obligations of the founder or the beneficiaries.