Foundations of Private Interest
Panama’s Private Foundation Legislation of 1995
Unlike Belize’s common law Trust which can conduct business, a Foundation of Private Interest that is domiciled in the Republic of Panamá is not allowed to transact or conduct daily business activities and is generally considered to be a nonprofit organization that is established by an international investor for the endowment and protection of his lawful personal and business assets. It is a strictly autonomous legal entity that is governed by the Private Foundation Law that was implemented in Panamá during 1995.
A Private Family Foundation can be created by means of a notarized chartered document and is generally considered to be a legal entity once the Foundation’s charter has been recorded at the Public Registry Office in Panamá or is executed before a Panamanian Public Notary. The Foundation’s Charter must contain information on the explicit objectives or purposes of the Foundation, the present or future assets (referred to as its “patrimony”) being endowed to the Foundation, the duration of the Foundation and must identify the name of the Panamanian Resident Agent and three members to serve on the Foundation’s Council. The identity of the Foundation’s beneficiaries and its governing regulations is not required to be filed at the Public Registry and is not available for public consumption under any circumstances.
Nominee councilors may be appointed to serve as Council Members to administer the Foundation. To maintain the confidentiality of the Founder’s identity, the Founder can be appointed as a member of the Foundation Council, as a Beneficiary or as a Protector (i.e. an official whose name is not identified at the Public Registry). The Protector is allowed to submit a notarized private “Protectorate Document” whereby the Protector appoints the Beneficiaries through a Private Letter of Wishes. Separate regulations are submitted confidentially which identifies the Foundation’s governing principles of operation which may include regulations that reserve the right of the Founder to remove or add new Council Members and that regulates Council Members to exercise their powers only after obtaining the previous authorization of the Protector or any other supervisory body (auditors, accountants, etc.) that is appointed by the Founder or by a majority of the Founders.
The initial patrimony of a Private Foundation is US$10,000. This amount, however, does not have to be deposited in advance at a bank in Panamá at the initiation of the Foundation’s charter. All world-wide income arising from the assets held by the Foundation are exempted from all taxes within Panamá. For all legal purposes, the assets of the Foundation constitute an estate separate from the Founder’s assets and as such cannot be seized, sequestered or subjected to any personal lawsuits brought under any circumstances against the Founder or his beneficiaries. Since the Foundation is considered a nonprofit entity, it may give educational grants or charitable donations to any designated parties or vice versa receive the same.
A carefully designed dual corporate strategy utilizing a Private Interest Foundation that will hold, as part of its patrimony, the bearer shares of a Belize IBC that, in turn, will exclusively conduct the day-to-day business of the Foundation will assist you greatly with your domestic investment and estate planning. This strategy can result in very substantial tax and non-tax related advantages that become effective at the time of the Foundation’s constitution or after the death of the Founder. These advantages include investment diversification, minimal tax reporting requirements, the avoidance of Controlled Foreign Corporation reporting provisions (in the US, Canada, United Kingdom, Italy, Australia, New Zealand) and the probate procedure, a substantial decrease in property tax, income tax and capital gains tax, asset protection for the beneficiaries of the Foundation and exemption from estate succession, gift and inheritance taxes.
A Trusted Global Advisor
Georgetown Trust Ltd. has established itself as a trusted global advisor with the proper knowledge and integrity that is necessary for your asset protection and estate planning. As Panamá’s Private Interest Foundation is modeled accordingly on the Foundation legislation of Liechtenstein and Austria, it comes to you solidly recommended as a valuable lifetime fiduciary guarantee that your assets will rightfully go to your heirs and not to your creditors or the government. When you are ready to proceed with a Private Foundation, please contact us and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497.