A brief description of Panama Foundations
- It is a non-profit organization that may engage however, in commercial activities in a non habitual manner, or exercise the rights arising from titles representative of the capital of mercantile corporations which are part of the assets of the Foundation, provided all economic proceeds be devoted exclusively for the purposes of the Foundation.
- It can be constituted to function throughout the founder’s life; or after his death; as can be established by the Founder in the Foundation Act.
Assets of the Foundation
- A Foundation can be used to set assets under their name. One of their principal objectives is to ease the administration of the estate and to avoid hereditary processes.
- The assets of the Foundation constitute assets separate from the personal assets of the Founder, for all legal purpose. Such assets may not be attached, executed neither be object of any action or security measure, except, for obligations of the Foundation, or for the lawful rights of the beneficiaries of the Foundation. Such, assets may not in any case be liable for the personal obligations of the Founder or of the beneficiaries.
- The assets transferred to the foundation are administrated by the Foundation Council which is the administrative body, having the powers set forth by the Founder in the Foundation Charter, which must be constituted by natural person (in a minimum of three), who need not be citizens or residents of Panama and/or a juridical person constituted under the laws of Panama or any other jurisdiction. The council must be constituted by one juridical person and will be entrusted with the fulfilment of the purposes of the Foundation
- The constitutional instrument is the Foundation Act, submitted by the Founder, and recorded in the Public Registry of Panama. However, confidentiality may be assured in different ways, among which is the action through a third party attorney in fact (which appears in the Act as a formal Founder), in the place of the true Founder. On the other hand, the truly confidential information and the distribution of the patrimony among these, such as the names of the beneficiaries of the Foundation and the way the Foundation properties must be distributed among the beneficiaries, appear in the By-Laws which have a private character, not subject to public registration.
- A Panamanian Foundation may migrate to other jurisdictions which accept it – or it can accept a foreign one, as may well be the case with one from Liechtenstein.
- Panamanian Foundations are not subject to tax by reason of income from foreign sources.
The initial capital of the Foundation
Shall not in any case be less than a sum equivalent to US$10,000.00, and may be expressed in any currency of legal course.
The Law establishes that all Private Interest Foundation must have a Registered Agent in Panama, which must be an attorney or a law firm.