Offshore Corporate Administration Inc. Panama Foundation

Offshore Corporate Administration Inc.

Panama Foundations

The Foundation concept evolves from the system of Roman Law in Continental Europe. A Foundation acts like a Trust, and operates like a company - the principal differences being that a Foundation is not capable of existence without a fund (assets), and it does not issue shares or other evidence of ownership in return for the amount of capital (assets/fund) tendered. A Foundation can not therefore be owned, transferred, or sold, in a similar way to a company. The Government of Panama enacted legislation for the creation of Private Foundations which is similar to the Liechtenstein Foundation, popular in Continental Europe for many years.

Foundations are typically used for the following purposes:

(i) payment of individual sums of money to members of one or more specified families for subsistence, education, training, clothing and other relief,

(ii) recurring payments to individually designated Beneficiaries and distribution of the Foundation funds to those Beneficiaries in the event of dissolution of the Foundation,

(iii) for inheritance purposes, similar to a Will,

(iv) for charitable or religious purposes,

(v) funds dedicated to a Family Foundation which also serve general purposes outside the family i.e. for the Church...(known as a Mixed Family Foundation),

(vi) a common Foundation established for any clearly defined asset protection purpose,

(vii) beneficial or charitable purposes, as long as funds are not solicited from the general public.

The Panama Private Foundation is a legal entity established by way of a private or public document, by either one or more private persons or corporate entities, known as the Founder(s). The allocation or endowment of funds or assets by the Founder(s) is essential to its creation. The Foundation becomes a corporate body (juridical person) by registering a Foundation Charter at the Public Registry, which contains:

(a) its name, which must include the word Foundation (in any language),

(b) its domicile,

(d) the names and addresses of the Member(s) of the Foundation Council (Board) which administers the estate (they may be individuals or corporate entities),

(e) the name and domicile of the Foundation's Resident Agent in Panama (which must be a lawyer or law firm),

(f) the objectives and goals of the Foundation (these must be possible, reasonable, moral, and legal,

(g) the manner in which the Beneficiaries (which may include the Founder), are selected,

(h) reservation of the right to modify the Foundation Charter,

(i) the duration of the Foundation,

(j) the use to be made of the Foundation's assets and the manner in which its estate is to be liquidated in the event of dissolution,

(k) any other lawful clauses deemed expedient by the Founder.

Any assets transferred to the Foundation constitute a separate estate from the Founder's personal property, and therefore may not be seized, attached, or be the object of any action or preventive measure, nor may they be used to satisfy the Founder's creditors. The Foundation Regulations (which are not registered at the Public Registry) are usually established, and this document normally contains details regarding the Foundation Council attributes, frequency of statements of account, causes for removal of the Foundation Council, and the manner of distribution of the Beneficiaries' interests.

A Foundation may not engage in commercial activities except on a non-habitual basis, or to exercise rights accruing to the capital stock of business companies which comprise part of the Foundation's assets - provided that the proceeds of such activities are exclusively applied to the goals of the Foundation. The Founder may also appoint a Protector, either in the Foundation Charter or in the Foundation Regulations to oversee the proper distribution by the Foundation Council of the estate among the Beneficiaries or the administration of the benefits corresponding to a specific Beneficiary. In addition, the Founder may appoint auditors to supervise the management of the Foundation.

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