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Private interest foundations in the Republic of Panama have been regarded as a key effort to confirm Panama’s essential and preeminent role as a leading offshore centre.  The Panamanian private interest foundations are considered as one of the best vehicles for international tax planning purposes due to their great flexibility. 

Key characteristics and advantages of a Panamanian Private Interest Foundation:

1. A private Panamanian foundation has an independent legal existence from that of its founder (as a type of legal entity), therefore the foundation’s assets constitute as a separate estate and may not be seized, attached or used to answer for obligations or liabilities of the founder or any other person, thus making the private foundation one of the most desired tools for asset management and protection.
    
2. A private foundation is not liable to the founder’s creditors, except in case of fraud in the transfer of assets to the foundation.
    
3. There are no shareholders or members in a private foundation, only beneficiaries who are the persons for whose benefit the foundation is organised and its purposes carried out.
    
4. A private interest foundation may acquire and own property, incur obligations and participate in any judicial or administrative proceedings, only limiting itself to non-profit activities.
    
5. A common use of private interest foundations is to act as a holding company to own shares and equity interests in private companies. The foundations are also used as an investment vehicle, or to manage bank accounts.
    
6. Panamanian private interest foundations are also often used for estate and inheritance planning purposes, since they can be effectively used in lieu of a will.
    
7. Private interest foundations are exempt from taxes payable to the Panamanian Government on the income they earn and on any transfers made to or from them, provided that such assets or income are derived from operations conducted abroad. The only annual charge payable to the Panamanian Government would be a US$300.00 annual tax.
    
8. Foundations organised pursuant to the laws of a foreign country may continue their existence in the Republic of Panama (meaning that they may be re-domiciled in another jurisdiction).

If you are interested in the formation of a Panamanian Private Interest Foundation please contact us and one of our representatives will be available to answer any questions you may have and provide you with a quotation.
 
Source: Quijano & Associates, 2012, Panama Foundations

 

More information:

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