Organization of Private Interest Foundations
I am pleased to offer you a new and effective legal instrument, which was created to protect and maintain the confidentiality of your patrimony, regardless of its total amount.
The instrument is called Private Interest Foundation (Law 25 of June 12, 1995), which represents a modern legal means to protect your movable or immovable assets, such as, farms, shares, bonds, banking accounts, houses, etc.
What is a Private Interest Foundation?
The Foundation is a juridical person, established by you as the Founder, and aimed at the acquisition of your patrimony or the patrimony donated by a third party to be administered and protected according to the wishes of the Founder (you).
This legal instrument is created upon the unilateral decision to dispose of the goods, which become a donation and are administered as a trust, and by appointing the founding beneficiary or beneficiaries, which may include the Founder.
In case the Founder requires it, all these actions are kept anonymous and confidential. The Foundation shall enjoy the right to undertake contracts and commitments.
The Private Interest Foundation is made up of: the Foundation Board, an Overseer Committee, and the Regulations.
The Foundation or Administrative Board:
the Board may originally be made up of you (The Founder) and other two trustworthy persons (parents, your lawyer, banker, accountant). The Board is in charge of the administration and management of the Foundation’s assets, and is liable for the fulfillment of the Foundation objectives.
The Founder’s intent is implemented through the Regulations. The Regulations have a confidential and unilateral nature; confidential since a confidential annex details the objectives and means of management, as well as the beneficiary’s or beneficiaries’ information; unilateral since this is the standard and voluntary means established by the Founder to fulfill his own and management objectives.
The Founder, by means of the Regulations, establishes the administration of the movable or immovable assets on the basis of his continuous management strategy, as well as the distribution of the benefits defined and fixed by him. The Regulations advise the Foundation Board (banker, charter accountant, and protector).
The Overseer Committee:
The Overseer Committee is in charge of monitoring the compliance and advancement of the administration by the Foundation Board. In case you deemed it necessary, this Committee will be created and conformed by you or (a) trustworthy person(s).
The Foundation allows you to open bank accounts in Panama (the US dollar is the legal tender in the Republic of Panama, all business transaction are carried out in US dollar); holdings; undertake low-risk commercial activities, such as bonds, securities, and other immovable assets; invest in the stock market or financial agencies with higher returns, establishing efficient financial investment management, upon continuous protection of the Foundation’s assets and patrimony.
At the same time it is an effective method to make a testament.
Who are the beneficiaries of the Foundation’s assets and proceeds?
The Foundation Charter or the confidential annex sets forth the beneficiaries and heirs, appointed by the Founder (you), either a natural or juridical person, such as, a son, wife, parents, a family, a non-profit organization.
The Founder shall have the right to remove or add new beneficiaries. The Foundation is made up of beneficiaries, not shareholders.
Advantages of a Private Interest Foundation
- The endowment of the Foundation shall constitute an estate separate from the Founder’s personal assets.
- The Foundation enjoys immunity from legal process since the available legally transferred assets may not be seized or attached.
- The transfer of the assets to the Foundation shall be exempted from all taxes.
- The transfer of immovable property located in Panama shall be exempted from all taxes, as well as the titles, securities or shares when they are issued in favor of relatives within the first degree of consanguinity or the spouse of the Founder.
- The existence of legal provisions regarding inheritance at the place of residence of the Founder and Beneficiary shall not affect the Foundation, and shall not prevent the attainment of its objectives.
- All persons involved in the creation and management of the Foundation must at all times hold the same in secret and confidentiality. Breaches of this duty shall be sanctioned with imprisonment and a US$ 50,000.00 fine, without prejudice to the corresponding claim for damages.