Gem Torres y Asociados Planificación Patrimonial

Panamanian Private Interest Foundations

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Panamanian Private Interest Foundations are regulated by Law No. 25 of 1995.

 

A. General Information on Panamanian Foundations:

Panamanian Private Interest Foundations can be used for the following purposes:

  • Conservation and continuity of the family businesses.
  • To protect the weak.
  • To carry out scientific, humanitarian, philanthropic, religious or charitable activities or to manage funds reserved for these activities.
  • To guarantee payment of individual sums of money or individual asset distribution to members designates as beneficiaries.
  • To act as the administrator of employee profit distribution plans and employee pension.
  • As a substitute for a will.
  • As a substitute for marriage articles or pre-nuptial agreements.
  • To own shares, interests and stocks of private companies.
  • As a vehicle for collecting royalties and other types of returns.
  • As a vehicle for investing in time deposit accounts, stocks, bonds or other securities.
  • As the owner of real estate or valuable movable property such as art work.
  • To insure assets.
  • To manage bank accounts.
  • For any specific asset protection plan.

 

B. Advantages of Panamanian Private Interest Foundations:

Incorporating a Panamanian Private Interest Foundation is a simple and expeditious procedure, and has wide range of benefits such as the following:

  • They are not subject to any form of taxation, assessment or levy in the Republic of Panama (except for a US$300.00 Annual Franchise Tax).
  • Law does not require the names of the real Founders, Beneficiaries or Protectors to be revealed.
  • Not required to file annual income returns or financial reports.
  • Law does not require annual meeting of the Foundation Council, Founders, Protectors or supervisory bodies.
  • Expeditious formation procedures.
  • Easy administrative procedures.
  • Reasonable incorporation and maintenance fees.
  • No restrictions on maximum assets allowed.
  • The contributions to the Foundation Assets do not need to be deposited as a requirement for the constitution of the Foundation, and there is no maximum period of time for the endowment to be made.
  • The Foundation may (non-habitually) carry out any kind of civil or commercial transactions, anywhere in the world and in any currency.
  • Founders, members of the Foundation Council, Beneficiaries and Protectors or Superintendents may be natural persons or corporations of any nationality domiciled anywhere in the world.
  • Founders need not be Foundation Council members.
  • Founders, Protectors or Superintendents and members of the Foundation Council may be Beneficiaries of the Foundation.
  • There are no limitations as to the maximum number of Founders, Council Members, Beneficiaries or Protectors allowed.
  • Founders and Foundation Council Members may hold their meetings anywhere in the world and may be represented thereat by proxy.
  • Foundation books and accounting books (if any) may be kept in Panama or abroad.
  • Foundation Charter may be subscribed by the client or by an attorney in fact or trustee, without need to reveal the name of the principal or settlor.

 

C. Requirements for constituting a Panamanian Private Interest Foundation:

Any client interested in forming a Panamanian Private Interest Foundations shall provide the following information, either by phone, fax, or electronic mail:

1. Name of the Foundation

It is advisable to provide us with three names of choice (in order of preference) in case the first preference is already registered in Panama. The name may be in any language and must include the word “Foundation”.

2. Objectives or Goals

Clients may provide us a general indication of the objectives of the Foundation; these must be possible, reasonable, moral, and legal. Clients may also amend or add objectives provided in our standard Foundation Charter.

3. Members of the Foundation Council and Founder

Our law firm may provide nominee Members of the Foundation Council and Founder. One or more persons, whether natural persons or bodies corporate, Panamanian or foreign, may be founders.

If the Foundation Council is composed of corporations, there shall be a minimum of one members.

If the Council is composed of individuals, there shall be a minimum of three members, whose names and domicile shall be contained in the foundation deed.

4. Authorized Capital

The foundation’s initial patrimony, expressed in any currency being legal tender, which in no case shall be less than a sum equivalent to $10,000.00.

5. Name and Address of the Correspondent

Full names, titles, and addresses of any persons other than the sender, authorized to give instructions in matters pertaining to the corporation, and the full name, position, and address of the person responsible for paying the Annual Filing Fee, and the fees for Resident Agent and Officers and Directors.

 

D. Constitution and Registration:

Once the required information is received, it takes only five working days to establish and register the Foundation,, provided that the name of choice is acceptable to the Registrar, and that our standard foundation charter is used.

It is allowed to reserve for thirty days a foundation name before the Public Registry of Panama.

In cases when documents are required with haste, we can send the documentation of the foundation by courier, which will add approximately US$60.00 to constitution costs.

 

E. Foundation Services:

  • Foundation name check.
  • Preparation, protocolization, and filing of Foundation Charter.
  • Preparation of Registration Forms.
  • Payment of first Government Filing Fee.

 

F. Foundation Documents:

Each Foundation includes the following books and documents:

  1. 1. Foundation Charter, recorded by a notary public, registered, and translated by an authorized translator.
  2. 2. Certificate of Constitution.
  3. 3. First Annual Government Filing Fee Receipt.

 

G. Annual Fees:

Once the foundation is established, there is only an annuity payable to us as Resident Agents of the Foundation in the Republic of Panama. (It is a legal requirement that all Panamanian foundations must have a local attorney as Resident Agent.)

If our firm provides Nominee Members of the Foundation Council, an additional yearly fee per member, will be charged.

 

H. Additional Services:

  • Resolution to rent an office.
  • General Power of Attorney.
  • Minutes of Foundation Council Meetings.
  • Receipt and forwarding of correspondence.
  • Use of our telephone and fax numbers on the foundation’s letterhead.

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