The Panama Private Interest Foundation is established by way of a public document by one or more natural or juridical persons, either by themselves (or through third parties for absolute confidentiality) and, if desired, can be structure to have immediate implementation or effect after the Founder’s death. The allocation or endowment of funds or assets by the Founder is essential to its creation. At the time of formation, a Foundation Charter is registered at the Public Registry, which is subscribed by the Founder, whose signature must be authenticated by a Public Notary.
The Foundation is an independent corporate body (juridical entity) from the Founder and is managed by its administrative organ called the Foundation Council, whose principal task is the pursuit of the Foundation purposes. Foundations may be used in place of wills for inheritance purposes.
The Founder is the natural or juridical person who forms the Foundation and donates the assets or capital for a specified purpose. The Founder defines in the Foundation Charter the tasks and objectives of the Foundation, the use of the Foundation’s assets, the beneficiaries, and any other lawful clauses deemed necessary by the Founder. If the Founder does not wish to have his or her name placed on public record, the Founder can be represented for purposes of signing the Foundation Charter by a “Founding Company”.
The beneficiaries may be natural or juridical persons who derive a present or future benefit from the Foundation. The Founder may be a Beneficiary.
The Foundation Council which administers the Foundation, must consist of a minimum of three members in the case of natural persons or one member in the case of a juridical entity. Its main task is the management of the charter specified.
The Founder may appoint, at his or her discretion, a supervisory mechanism (protector and/or auditor) which may be a natural or juridical person or persons to oversee the proper distribution by the Foundation Council of the estate among the Beneficiaries or the administration of the benefits corresponding to a specific Beneficiary. The specifications of the protector and/or auditor are laid out in the Foundation Charter or Foundation Regulations. The Founder may be the Protector.
The Foundation must seek non-profitable purposes. Nevertheless, commercial activities may be carried out, and capital stock rights may be enforced by the Foundation as long as the proceeds of such activities are exclusively applied to the Foundation’s purposes.
Foundations are commonly used for:
– Administration of the Founder’s assets.
– Private investments.
– Holding of assets or properties.
– Shareholding participation.
– Regulation of succession.
– Business preservation.
– Securing the wishes of the founder in regards to the disposition of assets.
– Minimisation of inheritance taxes.
– Recurring payments to individually designated beneficiaries and distribution of Foundation funds to those beneficiaries, in the event of dissolution of the Foundation.
– Administration of payments to individuals for subsistence, education, training, clothing, and other relief to future generations.
– Encouragement of family financial livelihood