Foundations have existed in jurisdictions like Lichtenstein for many years, but they have only been available in Panama since 1995. There are many benefits to setting up a Panama foundation, but first you should know exactly what a panama foundation is.

The Panama foundation offers a combination of the very best benefits from a trust along with the best benefits from a Panama corporation. A Panama foundation can greatly reduce tax liabilities, especially in a country with a Civil Law structure as opposed to a Common Law structure. A can be formed by one, or in some cases more, people or by an entity like a corporation.

The process of forming a Panama foundation is similar to the process of forming a Panama corporation. A Panama foundation has Council Members that are similar in function to a corporation’s directors.

A Panama foundation also has a private protector that is similar in function to that position in a trust. The protector position is not a legal requirement, but it can be beneficial to the Panama foundation.

To charter a Panama foundation you must select a unique name for your foundation. It may be in English or any other language you choose, but you must include the word foundation in the foundation title.

You should also have at least $10,000 as the initial patrimony that will be used to fund your new Panama foundation. You don’t have to have the money as part of the initial set up of your Panama foundation. You can deposit the money after the foundation is set up.

You should also keep in ind that the names and addresses of the council members of your Panama foundation are part of the public record, just like the directors in a Panama corporation.

You should also make sure that your foundation has a legal purpose for its creation. You can set up the foundation to benefit your children or pay for their college expenses or for your own retirement maintenance. These are not the only reasons to form a Panama foundation, but are merely examples.

You should also have beneficiaries listed as part of your initial Panama foundation paperwork. You should also document how you want your assets distributed in the case of your death or the dissolution of your Panama foundation.

You may choose any country as your foundation’s domicile, but you should make sure that your foundation domicile is located in a country that follows a civil law code, like Panama. You should also limit the lifespan of your Panama foundation if you so choose.

Only you can decide if you want to found your own Panama foundation. A Panama foundation can’t engage in any business transactions like a Panama corporation, but it can own shares of a corporation that is engaged in business practices. You may also engage in any type of activity that will increase the foundation assets but not for profit.

The founder of a Panama foundation does not technically own the foundation, a person cannot own a Panama foundation.

Recommended Vendors:

OffshoreLegal.org - Panama Private Interest Foundations