Offshore Private Foundations

from Maritime International Ltd.

Offshore Private Foundations are a popular structure for holding offshore corporations, as well as a stand-alone asset protection and estate planning structure as an alternative to an offshore trust.
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The Foundation can be created by three persons or by a company, through the preparation and filing of a Foundation Charter. The Foundation may be effective immediately or upon the Founder's death.

The Foundation will have a Founder, a Foundation Council, Beneficiaries and a Protector (optional). The Founder may be a Council Member and/or a Beneficiary. The client may be a Founder, a Council Member and a Beneficiary.

The Purpose of the Foundation must be clearly started in the Foundation Charter. This can be in broad terms and include any lawful purpose, such as: providing for the retirement of the Founder or other parties; providing for children and family members; maintaining real estate; holding the shares of corporations; investing in stocks, bonds, etc.

The Foundation will have Regulations, which are like the By-Laws of a Corporation. Unlike the Foundation Charter, the Regulations are a private document and is not registered with the authorities or available to the public.

The Foundation will be governed by the Charter and the Regulations.


The Charter must specify:

  1. The name, address and domicile of the Foundation.
  2. The initial Patrimony or contribution.
  3. The names and addresses of the Founder and Council Members (or nominees).
  4. The Purpose of the Foundation.
  5. The responsibilities of the Founder, the Foundation Council and the Protector.
  6. The name and address of the Registered Agent.
  7. The manner in which the Beneficiaries are to be appointed (This can be by the Founder, the Foundation Council or the Protector).
  8. The duration of the Foundation (It can be of limited time or in perpetuity).
  9. The disposal of assets in the event of dissolution of the Foundation.
  10. The rights and obligations of the Beneficiaries (e.g. a spend-thrift clause).
  11. Other legal matters such as conflict resolution, meetings, re-domiciliation, etc.


The Regulations are a private document specifying how the Foundation is to be managed.

The Regulations may include:

  1. Appointment of the Protector (if any). The Protector may also be appointed through a separate private document, if desired.
  2. Appointment of the Beneficiaries (Again, this may be a separate private document).
  3. What assets are being transferred to the Foundation.
  4. When and how assets are to be distributed to the Beneficiaries.
  5. How the assets are to be managed and whether transfers are revocable.
  6. Procedures for meetings, resolutions, appointments, reports, and records, etc.
  7. The causes for removal of the Foundation Council.
  8. Indemnification of the Foundation Council.


The Founder is the person or corporation who submits the Foundation Charter to the authorities and brings the Foundation into existence.

The Founder can be the client but it is usually our office in Panama. Otherwise, the client’s name as Founder is in the public record and also certain difficulties can arise in authentication of the document if it is not presented by a Panamanian Founder.

If the client is not the Founder, there are two options:

  1. Appoint a nominee Founder with the usual full powers specified in the Foundation Charter, but with an agreement between the client and the nominee Founder to hold these powers in trust for the client.
  2. Appoint a nominee Founder with the powers in the Foundation Charter limited only to the presentation of the Foundation Charter for registration with the authorities. In this case, a Protector should be appointed to wield full powers over the Foundation. The Protector can be the client or whoever the client desires. The name of the Protector is not in the government or public record.

There could also be a variation of 1) above in which the Protector is added with powers over the Foundation. Generally, however, 2) above is the usual option selected.


The Foundation Council is in charge of carrying out the purposes and objectives of the Foundation. The Council can be either natural persons (3) or a Corporation (1). Council members and their addresses are in the Foundation Charter and are thereby in the public record.

If desired, a nominee Council can be appointed, with nominees provided by Maritime International Ltd. As usual, a signed but undated letter of resignation is provided so that the client can replace the nominee(s) at any time.

If a nominee Council is desired, a Protector should be appointed. This can be the client or anyone he/she chooses. The Protector then has full powers over the nominee Council and the Foundation. The Protector’s name is not in the public record.

If the client appoints Council members rather than using a nominee, it is recommended that they be non family members and also not Beneficiaries of the Foundation. A Protector can still, if desired, be appointed, to provide full control over the Council, whether or not they are nominees.

Unless otherwise stated in the Foundation Charter or its regulations, the Foundation Council has the following general obligations and duties:

  1. To administer the assets of the Foundation, in accordance with the Foundation Charter or its Regulations.
  2. To enter into acts, contracts or lawful businesses that may be suitable or necessary to fulfill the objectives of the foundation.
  3. To inform the Beneficiaries of the Foundation of the current state of the assets as they pertain to each beneficiary, as established in the Foundation Charter or its Regulations.
  4. To deliver to the Beneficiaries of the Foundation the assets or resources set up in their favour by the Foundation Charter or its Regulations.
  5. To carry out all such acts or contracts which are permitted to the Foundation by the present Law and other applicable legal or regulatory provisions.

The Foundation Charter or its Regulations may provide that the members of the Foundation Council may only exercise their powers by obtaining previous authorization of a Protector, a committee or any other supervisory body, appointed by the Founder or by the majority of the Founders. The members of the Foundation Council shall not be held liable for the loss or deterioration of the assets of the Foundation, nor for any damages or prejudice caused, when said authorization has been duly obtained.

In the Foundation Charter, the Founder may reserve the right for himself/herself or for other persons, to remove the members of the Foundation Council as well as appoint or add new members.


The Protector is an optional position, but it is recommended if nominees are being used for the Founder and/or the Foundation Council.

The Protector, if appointed, is the person who effectively controls the Foundation and administers the assets. The Foundation Council usually appoints the Protector through the Regulations or by a private document, so the name of the Protector is not in the public record. The Protector can replace the Foundation Council members at any time.

The client is usually the Protector and he/she can have the Foundation Council appoint himself/herself or whoever is desired. A nominee Protector, provided by Maritime International Ltd, can also be used if desired.

The Foundation Charter or its Regulations provides for the establishment of the Protector.

The duties of the Protector are established in the Foundation Charter or its Regulations and may include, among others, the following:

  1. To ensure the fulfillment of the purposes of the Foundation by the Foundation Council and to protect the rights and interests of the Beneficiaries.
  2. To demand from the Foundation Council, the rendering of accounts.
  3. To modify the purposes and objectives of the Foundation, if and when they become too costly or impossible to fulfill.
  4. To appoint new members of the Foundation Council due to temporary or permanent absence or for expiration of the period of any one of them.
  5. To appoint new members of the Foundation Council in cases of temporary or accidental absence of any one of them.
  6. To increase the number of members of the Foundation Council.
  7. To approve the acts adopted by the Foundation Council, as indicated in the Foundation Charter or its Regulations.
  8. To guard the assets of the Foundation and observe their application to the uses or purposes stated in the Foundation Charter.
  9. To exclude Beneficiaries of the Foundation and to add others in accordance with the provisions of the Foundation Charter or its Regulations.


A Panama Private Foundation does not have owners, it has Beneficiaries. Each Beneficiary has a specified percentage endowment but Beneficiaries do not own the assets of the Foundation, nor are they entitled to claim on the Foundation. The Foundation Charter and its Regulations specify how and when the Beneficiaries may receive benefits from the Foundation.

The Beneficiaries are appointed by the Protector or, if no Protector has been appointed, then by the Founder.

The appointment of the Beneficiaries can be through the Regulations or a private document, so that the names of the Beneficiaries are not in the public record.

The Client and/or Protector may be the sole Beneficiary, if desired. Details of succession, in the event of death, are provided for in the Regulations or in a separate private document.


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