Private Interest Foundations are an excellent asset protection and wealth management vehicle carefully regulated by modern legislation. Offshore Pro Group recommends them as an asset holding vehicle.
What is a Foundation?
A Foundation is a self-owning legal entity: it has managers but no owners. Put another way, a Foundation is a means of giving separate legal personality to certain defined assets (as opposed to a company, which gives legal personality to a group of people).
It is then managed by a Council of Members, normally appointed by the original Founder. Its object must be to achieve a certain specific purpose – for example to manage wealth for certain named beneficiaries.
What is a Foundation used for?
A Foundation should not normally engage in commercial transactions (it should not issue invoices). It is ideal for holding long term assets such as real estate or shares in other companies, both private closed companies and publicly-listed companies. It may hold bank and brokerage accounts and all kind of assets in its own name.
What is the Difference Between a Foundation and a Trust?
A Private Interest Foundation can be considered as a hybrid between a company and a trust. Modern laws make it indisputably clear that the assets and liabilities of a Foundation are completely separated from those of the Founder and from those of the Beneficiaries. In a trust, the beneficiaries have a beneficial ownership interest in the trust assets. A foundation, however, is the true beneficial owner of all the assets it manages.
The Foundation structure typically allows the Founder to retain greater control than the settler of a trust.
We recommend Foundations over Trusts for holding assets located in civil law jurisdictions (such as Continental Europe, CIS countries and Latin America) since Foundations help avoid the problems of legal recognition of trusts in such jurisdictions. Trusts may be more suitable for holding assets in common law jurisdictions such as the UK, USA, etc.
The ongoing management costs for Foundations are typically lower than for trusts, due to the fact that is not necessary to hire a professional trustee or Trust Company for management of a Foundation.
Panama Private Interest Foundations
Foundations are formed under Panama’s Foundation law, number 25 of 12th June, 1995. They can be created by one or more persons or legal entities, known as the ‘Founder’, who must donate at least USD 10,000 or the equivalent in other assets to the Foundation as its original patrimony.
We normally form Foundations with a standard the minimum authorized capital of USD 10,000, and further donations may be made subsequently and privately.
Note: in practice it is not required to pay the USD 10,000 into the Foundation. A pledge to pay once it is set up is sufficient, or the capital may be contributed in the form of other assets.
Management of the Foundation is by a Council, that may act under the supervision of one or more Protectors, for the benefit of one or more Beneficiaries.
Privacy Advantages of Panama Private Interest Foundations
Members of the Council are on public record but the Protectors are appointed by a private deed that exists only in the files of the Foundation itself. We typically provide a nominee Founder and Council Members, who will then delegate powers to the Protector via a private Power of Attorney before a notary to the Person who will be responsible for the day to day management, bank account opening etc.
The Foundation’s Internal Regulations, detailing the patrimony of the Foundation and nominating Beneficiaries and Protectors, may be prepared by our office based on the client’s instructions, or may be supplied blank for the client to complete.
Setting up a Private Interest Foundation
Setting up a new Foundation takes 1-2 weeks. For urgent orders, we also have shelf foundations in stock for immediate transfer. To order your Private Foundation or to ask any questions, please do not hesitate to contact one of our consultants today!
The following are our basic fees for incorporation of Panama Foundations. For a list of additional services please request our full fee schedule.
|BASIC FOUNDATION PACKAGE||USD 795|
|notarized statutes (articles) in Spanish|
|registration in public registry, with registration certified by stamps|
|registration tax (tasa unica)|
|preparation of first minutes|
|provision of nominee founder|
|STANDARD FOUNDATION PACKAGE||USD 1195|
|everything from basic package, plus:|
|Certificate of Public Register|
|Nominee Council Members (3 physical persons) Per year inc simple copies of IDs and utility bills|
|Power of attorney|
|Certified English or Russian translations|
|Preparation of appointment of Protector and Standard Internal Regulations|
|APOSTILLE CORPORATION PACKAGE||USD 1295|
|everything from standard package plus:|
|Apostilles on statutes + Certificate + translations + POA (4 apostilles total)|
|Government Tax (obligatory, includes filing and payment processing fee)||USD 400|
|Registered Agent and Registered Office fee (obligatory)||USD 300|
|Nominee officer fee, total for 3 nominees (optional)||USD 300|