Panama Private Foundations

PANAMA PRIVATE FOUNDATION

Panama is a Spanish speaking country located in Central America. It is a stable democracy well known as a thriving International Financial Center, offering offshore companies, offshore banking, Trusts and Private Foundations to clients worldwide. While Spanish is the official language, English is widely spoken in business and international commerce. All offshore documentation is usually provided in both Spanish and English. The US dollar is the official currency.

The Panama Private Foundation came into Law in 1995, modeled after the Liechtenstein legislation.

OVERVIEW OF KEY FEATURES

A Panama Private Foundation is formed by a Founder creating and filing a Foundation Charter with the authorities. The Charter sets out the Purpose of the Foundation, appoints Council Members, and provides other details of the Foundation. The Charter is a public document but nominees may be used to provide privacy.

A separate private document, usually called the Regulations, provides details on the running of the Foundation, and names the Beneficiaries. A Protector may also be named but this is optional. If a Protector is named he/she usually has full powers over the Founder and Council Members.

The Panama Private Foundation is a legal judicial person and its assets are separate from those of the Founder or the Beneficiaries. It’s assets cannot be seized to satisfy any claims against the Founder or Beneficiaries.

Transfers to the Foundation can be challenged by creditors if the transfer constitutes an act of fraud, but only if the challenge is made within three years of the transfer of assets to the Foundation.

Panamanian Anti-Money Laundering laws aimed at the proceeds of drug trafficking; apply to the Foundation.

The Panama Private Foundation is exempt from all taxes in Panama. Further, there are no shares issued to the Founder or other Foundation parties and therefore the parties do not own the Foundation. This may have some valuable application in tax reporting and planning.

The Foundation is a non-profit organization, not engaged directly or habitually in business activities. It can however, own the shares of a company engaged in business activities as well as own real estate, open bank and brokerage accounts and engage in other activities designed to grow its assets.

The Panama Private Foundation may be used as an Asset Protection vehicle and/or to hold an offshore company or companies, engaged in business activities.

QUICK REVIEW OF PANAMA PRIVATE FOUNDATIONS

• Click here to for more detail on the structure of an Offshore Private Foundation.

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