What is a Private Foundation?
It is a legal instrument that allows that one or more natural or legal persons allocate an asset exclusively to meet aims and objectives established in the foundation charter.
Commercial Benefits: Commercial activities that make a foundation out of the Panamanian jurisdiction are exempt from income tax.
Corporate Benefits: Allows that the purposes of the foundation are met in a more confidential and private manner as the law does not require that the identity of the beneficiaries to be disclosed publicly.
Assets Benefits: The assets of the foundation cannot be seized or garnished. Since the property in the name of the foundation cannot be attacked by personal obligations of its founders and (or) beneficiaries.
Family Benefit: Allows that the assets of the founder be transferred to the beneficiaries tax free once the founder dies.
When a Private Foundation is useful?
- To carry out commercial, personal or family purposes more confidential.
- To reduce tax costs in transactions outside Panama.
- To reduce inheritance of property taxes.
- To protect certain property of obligations and personal responsibilities.
How to start a Private Foundation?
- Filling the attached forms (PDF Download Here)
- Sending copy of passports (founders and beneficiaries)
- Paying the invoice for the establishment of the foundation.
- Provide the required minimum nominal capital of $ 10,000 (can be made after the establishment of the foundation)
Additional Information Private Foundations
Advantages of a Private Foundation
- The income tax is not paid on transactions outside Panama.
- There is no requirement that the name of its founders, beneficiaries or protectors is disclosed.
- Protection of Assets but without the need to transfer the property to a third party.
- Can carry out commercial transactions in unusual way.
- Can be used as a will without being subjected to the processes of succession in the ordinary courts.
- Serves as a means of family planning.
- The possibility of following aims and objectives for a long time even after the founder's death.
Requirements to constitute a Corporation
- The name of the Corporation
- The name and address of the subscribers
- The objects which may engage the corporation
- The social capital, amount, shareholding distribution and classes of shares, etc.
- The duration of the corporation, which can be perpetuate
- The name and address of the directors and officers
- The name and address of the resident agent