The Private Interest Foundation is another legal mean to protect the patrimony and fiscal planning.
Among the advantages given by Foundations in Panama we can mention:
- It may be established as effective from the date of constitution or after the death of the founder.
- The inheritance laws applicable at the address of the Founder or the recipients do not have effect on the assets of the Foundation, neither these laws affect the validity or execution of the Foundation objectives.
- The Foundations are established to execute the objectives established in the foundational deed and additionally and sporadically may have commercial activities, exert the rights relative to their collected values, have a property, have obligations and take part of the administrative and legal processes.
- Provide a fiduciary structure for order transfers and the disposition of the assets. The recipients obtain the patrimony after the death of the founder, keeping the control of the assets for life.
- Foundations in Panama shall be established with a patrimony of ten thousand dollars (US$10,000.00) or higher, which may be paid and increased later.
- The assets of the Foundation turn to be legally independent and are not part of the private patrimony of the Founder. Such assets cannot be seizure and cannot be subject to any prevention action or measure, except if said action or measure is related to the obligations incurred by or damages resulting from the execution of the objectives of the Foundation.
- Foundations organized under the laws of other jurisdiction may continue to be in force as Private Interest Foundations in Panama, and vice-versa, Private Interest Foundations organized under the Panamanian laws may continue to be in force according to the laws of other country.
- It does not have shareholders or members; it is ruled by the foundational board, who is in charge of the administration of the goods of the entity in favor of the recipient or recipients.
The Foundation comes from the donation of the patrimony of a person or entity, named founder, for some private interest purposes, collected or listed in its foundational letter or deed. It cannot have commercial activity, but only sporadically and to aid with the foundational purpose.
Foundations cannot have commercial activities, unless these are sporadically done and to assist the fulfillment of their foundational goals.
A private interest foundation may be constituted for approximately 1500 dollars and its annual maintenance may cost around 800 to 900 dollars. These sums include expenses and honoraries.
Constitution of a Private Interest Foundation
As it has been said, the birth of a foundation of Panama is produced with the donation of the initial capital by the founder, either paying it in cash or with material goods for an equivalent value. The founder, if wanted, may be kept anonymous, assigning the constitution to a third person: the fiduciary or nominal founder.
The founder (either real or fiduciary) will assign the foundational board, which eill be the organization that will administer the goods of the entity. The board shall be integrated by a minimum of three natural persons or a legal person. There are not restrictions in relation to the nationality, and the founder itself, if wanted, may be part of it as well. It shall be taken into consideration that in the event the founder is part of the board, his name will appear in the public registries, too.
In addition, a resident agent will be assign, who shall be a lawyer or a lawyer office and will serve as representative before the authorities and is in charge of receiving the official correspondence. Frequently the resident agent also gives the services of virtual office to the foundation and serves as social reason.
The foundational deed will be the most important document of the foundation and will encompass as minimum the following information:
- Name and address of the foundation.
- Name and information of the members of the foundational board.
- Name and address of the resident agent.
- Description of the foundational capital.
- State the goals or purposes of the foundation.
- The method for assigning the recipients.
- The duration of the foundation: temporarily limited or permanent.
- The destination of the goods in the event dissolution of the foundation occurs.
- The clause for revocation or foundational deed modification, which is reserve to the founder.
- The clauses that the founder wants to add.
The recipients may be kept anonymous indicating in the deed that they are in the process for appointment, and the founder can also be a recipient. The details of how the goods are divided can also refuge in the Foundation Regulation, to be a private document.
In the event of using the service of a nominal or fiduciary founder, it is frequent to give the real founder a power of attorney of administration such that he can have control on the funds and the daily administration of the private interest foundation.
Another alternative is the use of the figure of a guardian or supervision organization/organism. It is a person or entity, assign to the instance of the founder, who supervision powers on the foundational board are given to. The guardian will watch over the fulfillment of the foundation purposes and the sharing of the goods to the recipients is done according to what is established. He will have the faculty to remove or substitute any member of the foundational board. The founder can also appoint himself as the guardian and keep in this way the control over the fiduciary founder and the board.
Foundations in Panama results to be a very flexible tool to be used for testament purposes, the Law establishes that no rights will be recognized to forced beneficiary that these may have covered by the laws of other country.
To expand the meaning of the parties involves, it may be highlighted:
- Founder: It is the person or entity that establishes the Foundation at the Public Registry of Panama. The lawyers firm is generally the Founder since it is who registers. The Founder does not have influence on the control of the foundation.
- Board: It has the same function of the board of directors in a company. Each member of the Board is registered with their names, addresses, and identifications as members of the Foundation. The interested may request the service of the “Foundational Board” provided by the firm for a higher privacy. For this, a resignation letter is also provided to the interested person such that the members may be replaced at any time. They do not have any influence on the Foundation or its assets.
- Guardian: He has the control on the foundation and its assets, is appointed by the Foundation Board, and has the authority, once he is appointed, of removing the members of the Foundation Board. The guardian may be appointed by a Private Document. It is also optional not to use a guardian.
- Recipients: They are appointed by the Guardian through a Will Manifesto Letter, or through Statutes. Such documents are privately kept and are only known by the interested parties. It may also be established the recipient to be the guardian, and in the event of his decease, other will become the guardian.
- Will Manifest Letter: It is a simple letter, written by the Guardian, in which he will precisely specify how the assets will be managed or distributed in the event a incident such as the decease or incapability of the Guardian may occur. It will also establish if the Foundation will continue existing, indicating the name of the new Guardian, or if it shall be dissolved after the Guardian decease. This letter may be kept private or may be inscribe at the Public Registry, according the needs of the client.
- Statutes: Foundation does not need Statutes, since the Will Manifest Letter is enough to express the testamentary instructions requested. However, if it is wanted to have a more formal testamentary document of Foundation, written and signed by a Panamanian Lawyer, and notarized, Statutes are done. In these, it is established how the assets shall be managed in the events such as the decease or incapability of the guardian, and if shall or shall not continue existing. These may be kept private or registered in the Public Registry, and the guardian may make the necessary changes as desired.
- The Panamanian Government does not demand any type of declarations or taxes requirements for Private Interest Foundations in Panama.
- Panama does not allow the “lifting of the corporative veil”; thus, the books of its Foundations are kept 100% private and confidential by law.
- The Guardian and his Recipients do not require to be publically registered. The Guardians may be appointed in a Protective Private document, and his Recipients may be appointed through Private Letters with will manifest, written and sign by the Private Guardian.
- Do not require of Paid Capital.
- Directors: Foundations shall have a Board (same as the directors in a company) whose names and addresses are registered at the Public Registry. The members of the board may be individuals or entities of any nationality and residents of any country. If the board is constituted by individuals, it requires 3 members (President, Secretary and Treasurer). If the board is an entity, then only one member is required for the board.
- All resolutions done through face-to-face meetings, through email, telephone calls, or any electronic means will be valid no matter if the signing was in different dates and different countries.
- It is advisable for each Foundation to keep a book for minute registration, which may be kept in any part of the world, however it is not mandatory.
- Annual Tax of Corporative License: Companies or foundations shall pay US$ 300.00 as annual tax of corporative license, to keep them in force.
- It is not necessary for the interested parties to be in Panama to register a Foundation or company.
- Foundations do not require an Operation Notice (known as Commercial License) to operate overseas.
- Foundations may change address.
- Corporative Stamp: The stamp of the Foundation is optional. We can offer Foundation´s Stamps if you want one. Please see our Charges Chart for price details.
May you interested or require more information about Companies and Foundations, do not hesitate to contact us.