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Panama Foundations of Private Interest, since their incorporation to Panamanian law in 1995, have served as an innovative instrument for asset protection, similar to the foundation structure found in Liechtenstein, with the advantages of greater flexibility and considerately lower price (both in its creation and maintenance).
In Panamanian Foundations of Private Interest, a person, either natural or juridical, donate assets to the Foundation in order to satisfy its purposes, which are previously established in the Foundational Charter, similar to the Articles of Incorporation required for Panamanian corporations.
It is necessary to institute a Foundational Council, which is composed of three natural persons or juridical person, which will direct the foundation. There is also the figure of the Protector, which can be appointed to control and oversee the foundation’s activity.
It is very important to mention that for all legal purposes the Foundation’s assets are of its exclusive property, constituting an independent estate from the founder’s or the beneficiaries’ own assets. This meaning that it is not possible that any of the foundational assets be seized or sequestered in order to pursue obligations or claims (lawsuits, divorce, etc) of any kind that the founder may have. Even though the Foundation itself cannot take part in commercial activity, it is permitted that it holds shares in corporations that do.
Why choose a Panamanian Foundation of Private Interest?
Strong Foundation Law. Panamanian Foundation law is ample and flexible, and has not suffered modifications. This is why Panama is home for more than 400,000 entities!
Independent Assets. Foundation’s assets are of its exclusive property, constituting an independent estate from the founder’s or the beneficiaries’ own assets. This meaning that foundational assets cannot be seized or sequestered in order to pursue obligations or claims (lawsuits, divorce, liabilities) of any kind that the founder may have
Versatility. The foundation can hold shares of a corporation engaged in business activities, even when the foundation itself cannot carry out commercial activities. A Panamanian foundation can be owner of real estate, brokerage or bank accounts.
Confidential Ownership. Neither the Protector’s nor the Beneficiaries’ personal information are of public record, since they are appointed by means of private documents.
No paid-in capital. Foundation Law does not require paid-in capital.
Tax Friendly Jurisdiction. Foundations are not required to file tax reports. Additionally, there is no income tax, capital gains tax, interest tax, sales tax nor any of the burdensome taxes paid in other jurisdictions.
No restriction on nationality of Council Members. The totality of the Council Members can be foreigners.
No Reporting Required. There are no requirements concerning either accounting books or transaction records of any kind for Foundations.
Bookkeeping. Besides the Minute Book, which you can hold in any place in the world, there is no additional bookkeeping neither for you or the Registered Agent.
Convenient Council or Beneficiaries Meetings. The Council (Directors) or Beneficiaries can be held by proxy, either telephonically or any other electronic method, anywhere in the world.
Annual Government Tax. Panamanian corporations and foundations pay only an Annual Government Tax of $250.00 to the Ministry of Economy and Finance at the moment of incorporation. This tax is $300.00 for the subsequent years.
Change of Domicile. Foundations from abroad are being re-domiciled in Panama, taking advantage of the privacy and reduced maintenance cost offered by Panamanian Jurisdiction. Panamanian foundations can also be re-domiciled overseas.
No travel necessary. Your foundation will be set up by our staff members and sent directly to your home or office!
Incorporation Information
To proceed with the incorporation of a Foundation of Private Interest, it is necessary to complete the following information:
Founder: the person, natural or juridical, that establishes the foundation formally in the Public Registry. The founder does not hold control or direction of the foundation or its assets.
Foundational Council: consists of three natural persons, or a juridical person, and functions as administrators of the foundation’s assets. The names and addresses of the members of the council are registered in the Public Registry.
Beneficiaries: the beneficiary is the ultimate recipient of the foundation’s income. The Protector, by means of a Letter of Wishes (private document) can name the beneficiaries.
Protector: the protector is the person or entity that in due course holds overall control of the Foundation and its assets. The protector can be designated in the Foundational Charter, which will be of public record, or by a private document, which ensures privacy and anonymity.
Foundation’s Purposes: they can be diverse and general, in benefit of a particular person or family. It may serve for a charitable, scientific, humanitarian or social objective.
Foundational Charter: it is subscribed by the Foundational Council, in a private document and in any language, properly inscribed in Panama’s Public Registry Office. This charter constitutes the juridical instrument that governs the foundation, and it must contain sufficient information with reference to the name and domicile of the foundation, its purposes and objectives, names and addresses of the members of the council, and stipulations concerning the use of the foundation’s patrimony in case of dissolution.
Initial Patrimony: the law establishes that the funds must be at least $10,000, which is not required to be paid-in.
Letter of Wishes:
Domicile Change: it is permitted that Panamanian foundations change their domicile to another jurisdiction; foreign foundations can domicile in Panama as well.
Taxes: in Panama, foundations are free of income tax, property tax (when the property is abroad) and no tax reporting whatsoever. The only tax that Foundations pay is an Annual Government Tax of $250.00”, at the moment of incorporation. This applies equally to corporations.
Annual Tax
All Panamanian Foundations of Private Interest pay only an Annual Government Tax of $250.00 to the Ministry of Economy and Finance at the moment of incorporation. This fee is $300.00 for the subsequent years.
The date of the entity’s incorporation determines the payment deadline:
Date of IncorporationDeadline
January 1st – June 30th July 15th
July 1st – December 31st January 15th
If the Annual Government Tax is not cancelled by the deadline, the Late Penalty Fee is $50.00.
Renewal Information
Foundations have a relatively low maintenance cost, required to be paid annually in order to remain in good standing. This fee will depend on your entity’s features and services provided by us, below you will find detailed information on the renewal:
Payment
Frequency
Mandatory
Amount
Annual Government Tax
Annual
Yes
$300.00
Resident Agent/Registered Office
Annual
Yes
$250.00
Nominee Council Fee
Annual
Optional
$150.00
Mail Forwarding Services Fee
Annual
Optional
$300.00
Details:
Annual Government Tax: All Panamanian Foundations pay only an Annual Government Tax of $250.00 to the Ministry of Economy and Finance at the moment of incorporation. This fee is $300.00 for the subsequent years. The date of the entity’s incorporation determines the payment deadline:
Date of Incorporation Deadline January 1st – June 30th July 15th July 1st – December 31st January 15th
If the Annual Government Tax is not cancelled by the deadline, the Late Penalty Fee is $50.00.
Resident Agent/Registered Office: Panamanian law requires all corporations and foundations to have a resident agent domiciled in the Republic of Panama; this position must be occupied by an authorized attorney or law firm. It is also required that the Resident Agent provides its physical address, since this information is necessary in the Articles of Incorporation. Our law firm will serve as your entity’s Resident Agent and will provide with a Registered Office.
Nominee Council: If you have chosen Nominee Council for your entity, the annual fee is $150.00, which will be paid annually starting one year after the Foundation’s incorporation.
Procedure of incorporation
Now that you have the basic idea of the uses and advantages a Private Interest Foundation has to offer, you are ready to order. The process is as simple as it can get. Click on the ORDER NOW link, and complete the order. Upon payment we will send you a form requesting the following information:
Detailed Personal Information: Please complete the Order Form with the required personal information.
Choosing a Name: It is very important that you provide at least three different name options for your Foundation (in the language of your preference), in case your first choice is taken. These names must contain either of the following words:
FUNDACIÓN (i.e. Fundación Miranda, Fundación Familia Jones)
FOUNDATION (i.e. Miranda Foundation, Jones Family Foundation)
Foundational Council (Directors): In Foundations the Foundational Council can be composed by either three individuals or one entity. Please specify if you will designate your own Council or will be using Nominee Council.
Designated Council The persons assigned as members of the Foundational Council will appear recorded on the Public Registry, since their names and addresses are stated in the Foundational Charter. Therefore, this information is of public record.
Nominee Council: For the purpose of anonymity, you can opt for Nominee Council, which we will provide at no extra cost.
Beneficiaries: The beneficiary is the ultimate recipient of the foundation’s assets and incomes. Once all the Foundation’s documentation is in your power, you will be assigning the Protector, which will name the beneficiary/ies in the Letter of Wishes.
If you are unsure about any of these areas within the form you can Contact Us for immediate help. Upon completion and receipt of this information we will conduct a search of your names(s) in the registry and contact you to confirm availability.
Documents will then be sent to the designated address.
