General Information regarding Foundations in Panama

History of Foundations in Panama

The Private Interest Foundation in Panama is a type of entity which is between a Trust and a Corporation, however, is none of them. The Foundation is a different entity from any entity known in the Anglo-Saxon Law because this it not a legal personification of a person or a group of persons (as a corporation is), it is rather a legal entity which has no owners (shareholders, participants or partners) and it has traditionally a specific purpose for the benefit of a general group of persons.

The concept of “Foundation” began during the Roman Empire, under the influence of Christianity. Per example, the Catholic Church was considered a divine foundation, and the several sub-organizations within the church had the legal control to manage their estate. The original foundations were not created to serve a private need for a person or a family, but to serve the need of a community. After several centuries, the legal entity known as “Foundation” continues its existence and is widely used around the world for personal and private needs.

The concept of “Private Interest Foundation” started when the Principality of Liechtenstein, created by the “Persons and Companies Law” on January 20^th, 1926 (Personen und Gesellschaft Recht – P.G.R.), which created the “Family Foundation” (for the private benefit of the members of one or more families) and the “Mixed Foundation” (for the private benefit, nor only of the families, but also of other persons or institutions).

Historically, rich families in Europe have established Family Foundations constituted in the Principality of Liechtenstein (a Neutral Jurisdiction for war purposes, etc.) for estate planning, to ensure the safe transition of the assets to the beneficiaries of the families. Nowadays, constituting Foundations in Liechtenstein may cost up to US$25,000 and up to US$10,000 per year to maintain them.

The Private Interest Foundation in Panama is a legal entity which was developed based on models of Private Interest Foundations from three different jurisdictions, including those of the Principality of Liechtenstein, Switzerland and Luxembourg. The Panamanian Government carefully designed the Private Interest Foundation in Panama in order to create a more modern, flexible and affordable estate planning vehicle for people around the world. The assets of the Private Interest Foundations in Panama constitute a legal entity separated from the personal assets of the Founder, Protector, Assembly or Beneficiaries.

The Private Interest Foundation in Panama offers advantages for international estate planning, providing maximum privacy, anonymity and protection to the Protectors, Founders and Beneficiaries of the Foundation. The Panamanian Foundation is a solution to the global need of an affordable, anonymous and flexible estate planning which may be used to maintain assets such as corporations, trusts, bank accounts, investment accounts, real estate, or any other type of assets.

In Panama, the Private Interest Foundation is valid from the time it is registered at the Public Registry. It does not require any approval from a public authority. Law 25 of June 12^th, 1995 regulates Private Interest Foundations in Panama.

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