Panama Corporations Vs. Panama Foundations

The Republic of Panama is best known for the Panama Canal and of late the offshore services provided in the country. Offshore services provided in Panama include offshore banking, offshore foundations, offshore incorporation and the registration of boats and vessels and offshore trusts.

Panama began incorporating corporations over half a century before the legislation to form foundations was passed. Both types of entities can be considered as offshore if their activities geared at generating capital gains are conducted outside of the Republic of Panama. Although a Panama corporation and a Panama foundation have many similar uses it has been argued that a Panama Foundation is more versatile and safe where its limitations in function, ie cannot engage in direct business transaction, is not an encumbrance.

Taking the time out to plan estate and succession affairs is necessary. This can be done by going to the contact us page and asking querying about second citizenship. Applying for second citizenship and becoming a dual national can generate many benefits. Some of these include visa free travel, more business opportunities and safety. To apply for citizenship a registered agent who offers second citizenship services is mandatory.

A Panama Foundation can be incorporated by one or more persons. A Panama Foundation has no owners according to the Foundations Laws of the Republic of Panama. Since the foundation has no owner it is basically impossible to litigate against someone linked to it and get money or assets out of it. The legislation which Panama Foundations in Panama guarantees that the assets in a foundation cannot be seizes through civil litigation.Panama Foundations can be used to own corporations. This mean that as a form of asset protection a foundation can own a corporation and the owner of the corporation will not be revealed. A Panama Corporation can also be used for asset protection. The Panama Foundation can invest in or purchase assets such as art, real estate, jewelry, etc. A Panama Foundation is considered to be the ideal tool for asset protection and estate planning. It provides anonymity, privacy, and protects the members (beneficiaries, protectors and founder). A Panama foundation can purchase real estate in Panama.

While Panama Foundations are not allowed to take part in habitual commercial activities however they can own shares, bonds, stock in other companies. The legislation stipulates that any profits derived from such investments must be to the benefit of the beneficiaries. A foundation can own a corporation in turn will conduct its commercial activities.

A Panamanian Foundation is governed by the laws declared in the Panama Foundation Charter. The charter dictates how the assets of a Panama Foundation should be assigned in case the foundation comes to an end. The Laws also states under what circumstances the foundation can be dissolved. This prevents people form forcefully ending a foundation. A Panama Foundation can also be used as a will thus preventing forced heirship.

Panama Corporation and Panama Foundation both pay no taxes to the Government of the Republic of Panama. If capital is gained outside of Panama a Panama Foundation or Corporation will pay no taxes. A Panama Foundation will only pay taxes if it owns real estate property in Panama. A Panama Corporation can conduct business in Panama but will pay local taxes. Financial records for both Panama Corporations and Panama Foundations can be kept anywhere in the world. Panama Foundations and Panama Corporations are both very important vehicles used in tax planning. Both have very lucrative financial benefits for the owners and beneficiaries.

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