PANAMA FOUNDATIONS: PRIVATE USE

Introduction to the Private Use Panama Foundations

It well known within the offshore services industry that a major step forward was taken by the Principality of Liechtenstein with the adoption of the Law on Persons and Companies of January 20, 1926 which created the Family Foundations (for the private benefit of members of one or more families) and the Mixed Foundations (for the benefit not only of family members, but also of other persons or institutions). The family foundation as a legal entity also exist in Austria without much international recognition, however, due to the fact that this country is not deemed as an offshore centre. Additionally, there are the Luxembourg foundations with substantial differences to Liechtenstein and also of reduced international recognition.

The Republic of Panama inspired in the laws of Liechtenstein adapted the European model to create the Special Interest or Private Use Panama Foundations as more modern and flexible, with clear advantages for the protection of assets and international tax planning and empowered to carry on transactions

Advantages to Can-Offshore Clients

Significant advantages are offered by the Panama Private Use Foundations. The following are some highlights:

• The Can-Offshore Private Use Panama Foundations Charter is uniquely drafted to meet Canadian requirements. It is "the Boat that Floats". We have yet to see or hear report of any Panama lawyer who understands (or cares to) keep compliant with CCRA. Would you want to go to sea in a paper Boat or one with leaks?
   
• Total confidentiality and anonymity. The law on Private Use Panama Foundations state that the Foundations Council, the Foundations Guardian (protector) and the resident agent and any persons or institutions which by reason of their function obtain information related to the activities, transactions or operations of the Panama Foundation shall at all times be obligated to maintain strict secrecy, even after its liquidation. Violation of this rule shall be fined with imprisonment of up to six months and penalties of up to US$50,000 without limiting the respective civil liabilities arising from there.
   
• Total exemption of taxes in the Republic of Panama, including without limitation, income tax, wealth tax, real estate tax, inheritance tax, sales and transfer tax and others.
   
• There is no legal requirement to disclose the name of the Foundations real founder, beneficiary or protector.
   
• There is no requirement to file any annual tax return or financial statement.
   
• There is no obligation to hold an annual meeting of the Foundations council, the founders or the protectors
   
• Fast incorporation.
   
• Simple administration and management procedures.
   
• Reasonable incorporation and maintenance fees.
   
• There is no legal requirement of maximum authorized capital.
   
• The payment of the Foundations capital is not required for the incorporation of the foundation and there is no maximum time or deadline to make such contribution.
   
• There is no limitation in respect of perpetuities, accumulation of capitals and other restrictions which are required in similar structures in other jurisdictions, such as the Anglo-Saxon or common law trust.
   
• The private use Panama Foundations can engage in any business or civil transactions (only in exceptional cases) in part of the world and in any currency.
   
• The founders, members of the foundations council, beneficiaries and protectors may be individuals or corporations of any nationality.
   
• The members of the foundations council need not be founders.
   
• The founders, the protectors and the members of the foundation council may be beneficiaries of the foundation.
   
• There is no limitation on the maximum permitted number of founders, members of the foundations council, beneficiaries or protectors.
   
• The founders and the members of the foundations council may hold their meetings in any country and may be represented by proxy.
   
• The foundations books and accounting books may be maintained in Panama or abroad.
   
• The foundations charter can be signed by an attorney in fact or by a trustee without the need to disclose the name of the founder.
   
• Private Interest Foundations incorporated in other countries can be re-domiciled or continue existing as Panama Private Use Foundations and vice-versa following a simple continuation procedure.