Functioning of a Panamanian Foundation

The Panama Foundation is considered as the world’s best means of asset protection. Also called as the Panama Private Interest Foundation, it is an effective holding entity for assets. Here we will discuss about the working of the Panamanian Foundation, its overview and how to establish one. It is imperative that you pay heed to the legal matters by discussing it with a competent authority who can help you set up and maintain a Panama Foundation. In addition, it is very important to understand each and every step you are undertaking as to why you need to take it.

First, let’s start with how much it will cost

Panamanian Foundation- Expenditure

The typical fee is $300 per annum to the government and less than $400 every year to the attorney. The minimum capital investment is $10,000, whereas set up a minimum cost of attorney less than $2,000. These costs are subject to change and not an exact figure. Partial payment is made to the government, while some amount has to be paid to your attorney. It is important to make sure that you are dealing with people you have a comfort level with, as such entities are intended to last for a very long time.

Use of Panamanian Private Interest Foundation

The primary function of a Panamanian Foundation as a holding entity is asset protection as well as privacy. Overseas assets under a Panamian foundation are not taxed in Panama. The only taxation relating to a Panamanian Foundation would be when the entity owns a business operating in Panama. Even in that case, the business will have to pay the tax and not the Panamanian foundation. For increased asset protection, you can join a foundation with an offshore corporation in Panama or somewhere else.

Through a Panama foundation, you can own assets anywhere in the world, which includes, patents, bank accounts, real estate, companies, personal assets; for instance, cars, airplanes, etc.; royalty rights, stocks, bonds and other collectable items such as coins and stamps. A Panamanian foundation will provide long term asset protection, which is free from being challenged of foreign jurisdictions after the initial three year period. This means that there is a three year statute of limitations on fraudulent conveyance, after which no one can challenge you in a Panamanian court for transferring assets to the foundation.

However, this doesn't mean a person won’t be charged for carrying out illegal dealing. The Foundation assets can be frozen only when the entity itself has been accused of illegal practices in its own business dealings. It is advisable for a Panamanian entity to use the foundation as a holding company. In this way, if a company owned by the foundation enters a legal brawl, you are rest assured that it won’t spill over into the other foundation business.

It is critical to appoint an attorney for general council on such matters. Your attorney will suggest a Panama Private Interest Foundation as a powerful means to protect your assets from any foreign intrusion. In addition, protect you from the possibility of any changes in Panama laws regarding foreign ownership.