C. PRIVATE INTEREST FOUNDATIONS.
Private Interest Foundations are legal entities created by Law N° 25 of June 12, 1995. They have the organizational characteristics of Panamanian Corporations and the structure and management of trusts. They also have their own juridical personality as corporations have, and are widely used for familiar, religious, and charity purposes, thence having great similitude with the Liechtenstein's Familienstiftung and were created following the latter's model.
This new instrument established by our laws, is a complement of the Panamanian Corporations, with familiar objectives and capital planning, because of their simplicity, privacy, flexibility and reliability. Furthermore they are not subject to much formalities or requirements and their cost is highly competitive with respect to those of other jurisdictions.
Incorporation.
Its incorporation is as simple as the organization of a Panamanian corporation. Foundations may be created or founded by one or more persons or corporations, either directly or through third parties, such as the Foundation's Resident Agent, by means of a Foundation Charter that will govern over the Foundation.
Capital and assets of the Foundation.
The capital and the assets of the Foundation may be obtained as the result of any act or licit business or activity and they may be goods of any type or nature, present or future, be them either inmovables (real estate), securities such as stock, bonds and commercial paper or moneys, among others.
The capital and the assets of the Foundation are separate and independent from the personal assets of the Founder. Therefore said capital and assets shall not be sequestered, seized, attached or subject to any action or suit, as a result of obligations or liabilities of the Founder or of the beneficiaries of the Foundation.
Succesory Foundations.
Private Interest Foundations may be created in order to have effects after the death Founder, with succesory characteristics, without the formality or requirements of testaments.
In this sense, the procedure of a succesorial trial will not be required to transfer said assets to the capital of the Foundation and the fulfillment of the purposes and objectives of the Foundation will be handled by the Foundation Council, in accordance with the provisions of the Foundation Charter and its regulations.
Tax Benefits.
Panamanian Law establishes that neither the incorporation of a Foundation, the amendment of the Foundation Charter or its regulations, or its dissolution will be subjected to any type of tax, nor will be the assignment, transfer or insurance of any of the assets of the Foundation.
As with Panamanian corporations, the earnings obtained from the assets of the Foundation, will not be subject to taxes, contributions, duties, fees or obligations of any kind, always provided that:
- Said assets are located outside the Republic of Panama.
- Said assets consist of savings, checking or time accounts, or stock or securities of any kind, issued by companies whose earnings are not obtained nor produced in the Republic of Panama, or when said earnings are not subject to taxes in Panama, even when said securities are kept in the Republic of Panama.
Foreign Foundations.
A Private Interest Foundation duly organized in other countries, as an example Liechtenstein, may be redomiciled in Panama and adopt Law N° 25 of 1995 as the applicable legal provision to the same, through the registration of its foundational instrument.
Español
