Private Foundations

There is much being talked about in the offshore business and estate planning world about how the trend now is to utilize the Private Foundation which is a wonderfully versatile entity.

The Panamanian FOUNDATION OF PRIVATE INTEREST is considered by many to be a more informal, practical and useful entity than the standard Panamanian corporation which is known around the world for its flexibility and benefits. These foundations have been allowed under special Panamanian law since 1995.

One of the key differences is that the FOUNDATION is not created for commercial purposes. It's assets are dedicated solely to the purposes designated in the Articles of Foundation. But once it is formed, it may buy, sell, enter into agreements and act just like any other corporation.

Since it's purpose is not to create profits from standard commercial activity for the benefit of its shareholders, it is often used for charitable or personal purposes. It is probably used most often as a private receptacle to hold and manage assets.

For example, if you worked with a network of other business entities which were actively involved in a variety of commercial activities, the Foundation may hold the stock to those companies. The Foundation may be used to hold personal assets and manage those under any one of a number of guidelines or purposes, all determined by the founder!

Foundations may be formed by one or more individuals or companies, which is different from a Panamanian corp. which requires at least two individuals to form it.

The following are required to form a foundation;

• The name may be in any Latin alphabet language and must include 'foundation'.

• The initial capital of the Foundation must be $10,000 U.S.

• The name and address of the company that will act as the 'Council' for the foundation, or the three individuals that will form said 'Council' will be noted in the register.

• The address of the foundation

• The purposes of the foundation

• And how the beneficiaries will be designated, must be outlined.

The heirs of the founder of the foundation cannot revoke the Foundation, nor can they touch any donations the founder may have made to the foundation. In fact, creditors only have three years to contest any donations to the foundation for fraudulent transfer. After that, they have no recourse.

The Founder's home nationality cannot be used to interpret or apply it's own inheritance laws. They are moot in Panama according to law. Nor will they affect its validity or its purposes.

Any asset that is transferred to a Foundation becomes capital that cannot be attached or seized in claims unrelated to the operation of the Foundation. As noted above, fraudulent conveyance can only be claimed for a period of three years after the transfer.

Any transfer of assets from the Foundation to the spouse, children, father or mother of the founder are considered tax-free in Panama.

The Foundation, and the assets it holds, can only be revoked if such revocation is provided for in the Articles of Foundation.

Where a corporation has a board of directors, the Foundation has a council as mentioned above. This council may be a single corporation, or a minimum of three individuals. As in the corporation, this council may grant a power of attorney to any individual or corporation to manage the Foundation or perform specific acts on its behalf.

Since the Foundation does not carry out commercial activities regularly, no taxes have to be paid on its operation. The usual annual corporate annuities and fees need to be paid to the government but this does not exceed $300 plus a nominal fee paid to the registered agent and nominee council members if they are used.

This vehicle is very handy to use for a variety of of purposes and may be integrated into any business or personal financial management structure.  Compare the benefits of using a private foundation with your personal and/or business goals, to the nominal investment of only $1750 for our package, which comes complete with;

• a working nominee council to help manage the affairs of the foundation, and

• customized articles and regulations tailored to the intended purposes of the foundation

• corporate debit card account & internet access 

• brokerage account introduction and account opening assistance if needed

• foreign mailing address and mail forwarding for six months (postage deposit additional)

• your beneficiaries of choice

"We are not only responsible for what we do, but also for what we do NOT do !!"

-- Moliere

"Something hidden. Go and find it. Go, Look behind the Ranges. Something lost behind the Ranges. Lost and waiting for you....GO !"
-- Rudyard Kipling

" The art of taxation consists in so plucking the Goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."

-- Jean Baptiste Colbert