Panama Foundation Formation

What Can You Do with a Foundation in Panama?

A Panama foundation has a number of different uses and is different from a Panama offshore company. First and foremost it can be used for cost-efficient estate planning. When it comes to Panama Foundation formation, there is no need to go through complex probate processes or to write wills and other forms of inheritance document. Instead, assets can be placed in the name of the foundation and can then be passed to the beneficiaries as per the wishes of the protector. 

Panama Foundation
Panama Foundation

If you decide to go for Panama foundation, you can enjoy total global asset protection. The foundation essentially ‘owns’ all of the assets within it and prevents outside creditors, individuals, and other entities from obtaining them. It also offers protection from lawsuits, divorce proceedings, or other kinds of judgements. 

A Foundation in Panama holds shares, dividends, securities, commodities, property, vehicles, art, jewellery, brokerage or bank accounts, and various other tangible and intangible assets. The Panamanian authorities don’t recognise or enforce any foreign government orders relating to assets that are owned by a foundation within its jurisdiction.

Benefits of a Panama Foundation

A Private Foundation is a unique form of a legal entity, which acts like a Trust and operates like a company. There are many advantages of Private Foundations:

  • It offers total secrecy and anonymity
  • No requirement to disclose beneficiaries
  • No requirement to file annual returns or financial statements
  • Full exemption from taxation on any business activity or transaction carried outside of Panama
  • Simple ongoing administration
  • Complete management privacy and confidentiality
  • A Foundation may transact business in whatever currencies it chooses
  • Its founders, members of the foundation council and protectors may be of any nationality and may be residents of any country
  • The accounting books of the Private Foundation may be kept in anywhere in the world
  • Its assets may NOT be used to satisfy the founder’s or the beneficiaries financial obligations
  • The law on inheritance regarding the founder’s or the beneficiaries’ domicile is not opposable to the foundation nor may it affect its validity or prevent the fulfilment of its objectives

Name Restrictions

The name of any Panama Foundation can be presented in any language as long as it uses the characters of the Latin alphabet. It may not have a name that is the same, or similar to any other foundation registered in Panama. It must also include the word ‘foundation’ so it is clear that it is different from any other entity of a different nature. It must also not be a name that could be construed as offensive or obscene.

Trading Restrictions

A Panama foundation cannot conduct any business activities such as trading, selling, or buying anything. It can, however, earn passive income from investments, royalties, interest, securities, rent, and other sources.

Taxation for a Panama Foundation

You are not liable to pay any tax on it. If you are a US citizen, however, you are required to declare it to your tax authorities.

Double Taxation Treaties

Panama foundations are not liable for taxation but there are a number of double tax treaties in place between Panama and other jurisdictions. These include Japan, Belgium, the UK, and Canada, amongst others.

Accounting & Financial Statements

When you form a foundation in Panama, there are no requirements to keep accounting records or any kind of corporate books. Of course, best practice is that some kind of system is put in place to keep track of all expenses, income, outgoings, and meetings related to the foundation. This is useful in cases where the founder, protector, or beneficiaries of the foundation wish to inspect recent activity. Asides from this, there is zero need to keep records, or report activity to the Panamanian authorities. 

Disclosure of Beneficial Owner

There is no legal requirement to name the founder, beneficiaries, or protector of a Panama foundation. These details do not have to be given to the government of Panama, nor do they need to be made public. Only Council members need to be included in public documents and these can be nominees, appointed for the purpose of privacy.

Capitalization Requirements for Panama Foundation Formation

There are no minimum capitalization requirements. This means you do not have a set amount of money you need to put into the foundation, in order for it to be formed.

Constitutional Requirements

In order to form a foundation in Panama, you need to name a founder who must be a natural or legal person as the individual who is setting up the foundation in Panama. Details must also be provided relating to the purpose, terms, and investments– these must be stipulated in the Charter. It should also include details of the beneficiaries or the purpose of the foundation if there is no specific individual beneficiary.

Foundation Council Requirements

A foundation in Panama is required to have a Foundation Council. As per the requirements of Panamanian law, there must be at least three individuals on this council. Their names and addresses must be submitted upon the formation of the foundation.

Exchange Control

The national currency of Panama is the US dollar and there are no foreign exchange controls.

How Much Does it Cost?

Take advantage of our Panama Foundation Formation Package for as little as €2,000. You can also benefit from our special renewal package and additional optional services. To get full price details, related documents and services click on the button below:

Panama Foundation Costs

Contact Us to Register your Foundation in Panama

Panama is a great choice of location for a foundation as the sector is well developed and the country enjoys a stable government, economy, and society. Contact us today to get your offshore company registered in Panama Foundation.

Contact us for Panama Foundation Formation

More Locations to Incorporate Your Company

Not sure about a Panama Foundation? No problem! There are several other locations to consider. Select any of the countries below to learn more:

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