Panama Foundation – uses and advantages
For tax purposes;
For the protection and management of assets;
For educational purposes;
For life annuity purposes;
For charitable purposes;
To receive and manage capital and titles;
For the purpose of serving as guarantee or collateral;
For the management of insurance.
Advantages of a PIF in Panama
They provide a fiduciary structure for the orderly transfer and disposition of assets to beneficiaries upon the death of the Founder, keeping control of the assets during lifetime;
They may be established to have effects from the date of their constitution or after the death of the Founder;
According to Law 25 of 1995, inheritance laws that apply in the domicile of the Founder or the Beneficiaries shall not be effective against the Foundations assets nor may these laws affect the validity or performance of the Foundations objectives;
Foundations are established to carry the specifics goals set out in the Foundation Charter and may additionally undertake sporadic commercial activities, exercise rights pertaining to their holdings, own property, contract obligations and take part in administrative or judicial proceedings. A Private Interest Foundation should be established with a patrimony destined to fulfil its objectives, which shall be no less than US$10,000.00. Said patrimony may be increased by additional contributions of the Founder or third parties and does not have to pay in part or in full before the incorporation;
The assets of the Foundation become legally independent and do not form a part of the private estate of the Founder. Such assets are not sizeable and may not be subject to any precatory action or measure, unless such action or measure pertains to obligations incurred or damages arising from the fulfilment of the Foundations objectives; Notwithstanding the creditors of the Founder or of a third party shall have the right to contest the contribution or transfer of assets to a foundation when such transfer constitutes an act in fraud of the creditors. The rights and actions of such creditors shall lapse at the expiration of three (3) years, counted from the date of the contribution or transfer of the assets to the foundation was done;
According to article 27 of Law 25 of 1995, Private Interest Foundations are exempt from payment of any taxes, contributions, duties, liens or assessments of any kind arising from the acts of constitution, amendment or extinction of the same, as well as acts of transfer or encumbrance of the Foundations assets and the income arising thereof, when related to:
- Assets localized abroad;
- Money deposited by natural or juridical persons whose income does not derive from a Panamanian source is not taxable in Panama for any reason;
- Shares or securities of any kind issued by corporations which income is not derived from a Panama source, or which are not taxable for any reason, even when such shares or securities are deposited in the Republic of Panama.
Information of public and private knowledge
The Foundation Regulations are for internal purposes of the Foundation and are not a matter of public records. Information regarding names of beneficiaries and of the protector and method for distribution of assets can be contained within the Regulations thus will not be publicly disclosed.
Panama Foundation – taxation
Assets located abroad;
Money deposited by natural or juridical persons whose rent is not of Panamanian source or not taxable in Panama;
Shares or securities of any kind issued by corporations which income is not derived from a Panama source, or which are not taxable for any reason, even when such shares or securities are deposited in the Republic of Panama.
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