Foundations in Panama

A Panama Foundation is a legal entity registered in the Republic of Panama passed legislation to regulate the Panama Foundation in June of 1995 (law no.25). Foundations were first incorporated in Liechtenstein which was the first country to create laws for the same. Panama Foundation laws are based on the foundation laws of Liechtenstein. Panama foundations have many purposes and uses. The formation of Panama Foundations is straightforward and is not time consuming.

For information and advice on dual nationality simply submit questions via the contact us page. Dual nationality (like Dominica Citizenship) is important in these trying times. Several clients have received professional help and have been in possession of their second passport for several years. Owning a second home(Dominica citizenship offers real estate option) for vacationing, retirement or as a supplementary source of income are possibilities that come with a second passport.

A Panama foundation is governed by the Foundation Charter which can be formed or registered b an individual who is referred to as the Founder of the trust. The charter of a Panama Foundation contains the following information and documents:

  • The foundation name (any language which uses the Latin alphabet is accepted). The foundation name cannot be similar to one already established in Panama. The word foundation must be included in the name.

  • US$10,000 as the startup capital

  • The address of the foundation
  • Names and addresses of the members of the foundation
  • The names of the beneficiaries
  • The objectives of the foundation
  • The names and address of the registered agent
  • State how the assets of the foundation are to be distributed amongst the beneficiaries at the dissolution of the foundation
  • The by- laws of the trust

A Panama foundation has four very important elements; the founder, protector, council and the beneficiaries. The founder registers the foundation, the council made up of three or more persons who act as the directors, the protector control and owns the assets and the beneficiaries are the persons who ultimately inherit the assets of the foundation upon dissolution.

A Panama foundation can be utilized in many different ways. Foundations are commonly used for estate planning. By placing family assets and wealth in a Panama foundation persons can ensure that family wealth is passed down from one person or generation to the next and can also protect families from forced heirship.

Since Panama foundations have no owners it is easier for people to use then to own foreign companies. By using Panama foundation to own shares in foreign companies people avoid high taxations levied on them by their government for owning shares in a foreign corporation. The foundations buy the shares of the foreign company and it has no reporting to do to any authority.

Panama foundations are restricted by legislation to perform and engage in commercial activities in a habit forming manner. However, the laws states that Panama foundation can invest in a corporation or bank and can invest in stocks , bonds, mutual funds and shares as long as the profits from such activities got to the beneficiaries of the foundation.

The only taxes that a Panama foundation pays in Panama are the annual renewal fess which by the way is very low. A Panama foundation will pay local taxes if it owns property in Panama. If the capital or assets of the Panama foundation is accumulated outside of the Republic of Panama then no local taxes are paid.

A registered agent in Panama will provide all the necessary information for setting up a Panama foundation. With no need to declare the beneficiaries of the owner a Panamanian foundation provides maximum confidentiality. Panamanian foundations are easy to manage. Its accounting records can be kept anywhere in the world.

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