Why the Panama Private Interest Foundation? OffshorePremium is not simply offering offshore services. In all our endeavors we try to always propose you the best offer on the market. The fact is that since many years Panama is the best jurisdiction available in terms of creation of a foundation.
What are the advantages of a Panamanian Foundation?
The Panama private interest foundation inspires itself from the well known Lichtenstein Foundation. But Panama did more than simply modeled its foundation act from the Lichtenstein legislation. It actually improved it. The Panama foundation is as good as a Liechtenstein foundation but it is cheaper to create, cheaper to maintain and it offers more flexibility.
The reason for this is that the Panama private interest foundation combines characteristics of the Liechtenstein Foundation law, of the Common Law Trusts and of International Business Companies. This is what makes them such an efficient asset protection tool
What are the uses of a Panamanian Foundation?
- To protect assets from possible future seizure by creditors;
- To keep assets away from political or economical instability;
- To optimize tax planning;
- To provide an alternative inter-vivos (“living”) will instrument;
- To manage pension or profit sharing plans for employees;
- To hold shares of daughter companies (to be a holding company);
- To own and transfer freely real and/or personal estate objects, land;
- To manage bank and brokerage accounts;
- To invest offshore;
- To provide continuity of family business, preventing splitting of property;
- To defend minors and/or disabled persons;
- To carry out educational, philanthropic, humanitarian, scientific or charitable activities
Panamanian foundations cannot undertake commercial activities on a regular basis. Nevertheless, they may engage in commercial activities from time to time, when the profits are used for the objectives of the foundation. This means that a Panamanian foundation can have a bank account, hold shares of subsidiaries companies and receive dividends
Who can create or contribute to a Panamanian Foundation?
Anyone can create a Panamanian Foundation.
Anyone can contribute to the foundation assets. The Founder only duty is to transfer the initial endowment (initial patrimony) to the foundation. It Panama the initial endowment may not be less than $10,000. Later on the Founder may continue to contribute but any third parties may as well contribute.
Who owns the assets transferred to the foundation?
As already explained in my previous post on foundations any assets transferred by the Founder’s or any third party’s to a Private Foundation become the property of the Foundation and are separated from the transferors assets.
Who owns the Panamanian Foundation?
No one, Foundations are independent entities which do not issue shares or any type of certificates. The foundation is not owned by anyone.
How is a Panama Foundation structured?
A Panama Foundation is structured accordingly to the will of its Founder.
The Founder will firstly formalize his/her wishes into the Foundation charter and rules and regulations. Those documents will contain the will of the Foundation founder and will among other set rules as to:
- The beneficiaries,
- What percentage each beneficiary is entitled.
- How the assets are to be distributed upon its dissolution.
The Beneficiaries of a Panamanian foundation and their interest in the foundation are listed in a confidential document called Regulations. The Regulations are not filed in public records which guarantee the anonymity of the Beneficiaries.
Then the founder will also name a Council of Foundation that is composed of at least 3 Directors and which purposes is to fulfill the instructions of the Founder.
Finally the Founder will name a Protector which is the guardian of the Foundation and which role is to assure the proper fulfillment by the Council of all instructions of the Founder. Both Foundation Council members and Protector are appointed by the Founder.
What role or functions may the Founder of a Panama Foundation have?
The Founder may be:
- A beneficiary of the foundation,
- A member of the Council of Foundation,
- The Protector of the Foundation
Duration of a Panama Foundation
A Panama Foundation may be created for a limited or unlimited duration. As well it can be revocable or irrevocable
A foundation in Panama:
- Will be exempt of taxes on its worldwide income outside Panama. The only tax cost will be a yearly Franchise Tax and registered offices and agents costs.
- Does not need to proceed to a yearly Audit and/or to file any tax returns or financial statements.
As to the founder tax situation:
- Since there are no shares of ownership in a Panamanian foundation, the founder does not own the foundation and as such gains important tax reporting and protection benefits.
What is the best alternative to the Panamanian Foundation?
Bahamas also offers a foundation structure that has somewhat the same advantages than the Panamanian Foundation. So if you want to incorporate a foundation but don’t want to do it in Panama then Bahamas would be the best alternative for you
Do not hesitate to contact us with your question on this matter. Click here for a free consultation.
Originally posted 2012-01-15 09:29:01. Republished by Blog Post Promoter