Law Consultants Services & Co - 2008



Private Fundations

Private Interest  Foundations in Panama are regulated by Law Nº. 25 of June 12 of 1995, as well as by Incorporation Act.

The Private Interest Foundation is a juridicial entity in which a person know as "Founder" will transfer his goods to a foundation (which is a juridical entity entitled with rights and obligations), with the purpose of protecting and managing these goods on behalf of the beneficiary or beneficiaries, who can be the same founder or a third party, it represents a very usefull tool for family patrimony planning.

Among the benefits of incorporating a Private Interest Foundation we may find the following:

  • Private Interest Foundations will be exempt from tax, contributions or encubrances payment in the Republic of Panama, except for payment of annual franchise tax which has an initial cost in its firts year of USD250.00.
  • Private Interest Foundations are not compelled to file annual income tax return or financial statements.
  • They can be incorporated by individuals or judical entiteis, and it shall have effects on a certain date or anytime the condicitions set on it have been accomplished or after the deacth of the founder.
  • Our law does not compls the disclosure of the real identy of the founders or benificiaries.
  • For legal effects, the goods of the foundation may constitute a separate patrimony aside from the personal assets of the Founder, reason why these goods can not be seized or abducted, save for the obligations acquired on its own by the foundation.
  • The goods will be transferred to the foundation for specific purposes, and these goods can be assets as well as real estate properties.
  • At the time you incorporate a Foundation you will be able to open corporate bank accounts or investment accounts on behalf of the Foundation, indicating that the same is the beneficiary does not have to be disclosed. There is no legal limitation regarding maximum amount of  patrimony permitted.
  • The Foundation will be legally capable of acquiring rights and obligations.
  • They will not require a commercial license for operating wthin or abroad the Panamanian territory.