Panama Company vs Foundation

Panama Company vs Foundation


The formation and activities of a Panama Private Interest Foundation and Panama Corporation are...


Panama Foundations

Panama Foundations


The Panama Foundation Law was established in Panama in 1995. Panama Foundations are unique because...


Panama Companies


Panama Companies are all effective asset protection mechanisms that are compliant with international offshore regulatory standards. Panama Companies may differ with respect to ownership, such as in the case of the Panama Foundation, which has no owner and a Panama Offshore corporation which is owned by its members; tax savings properties such as Panama Offshore Foundations, Companies and Offshore Trusts that are exempt from taxes, contrary to Panama Limited Liability Companies that do not enjoy any tax exemption but provide excellent asset protection; or in their general purpose.

Clients are often advised about acquiring a second passport to maximize security of assets and reassure themselves of their own future goals. In particular, Dominica citizenship by investment is a viable route to doing this. There are two options in the Dominica Citizenship programme through which persons can apply for Dominican citizenship; a single option and a Family option. A due diligence back ground check is also performed on adults applying to the Citizenship Programme. Once successful, an applicant receives a Certificate of Naturalization.

Panama Foundations are used primarily for holding assets and provide a secure means for opening banking accounts, doing business and owning other companies in complete anonymity since Panama Foundations are independent legal entities and do not have to be identified or represented by any person or group of persons. Panama Foundations have no owners; therefore, all of the assets that are placed within the Foundation are the Foundation’s sole property and cannot be claimed by anyone. Panama allows for the formation of two types of foundations, namely, Panama Private Interest Foundations, which are used for private and or business purposes and Panama Public Interest Foundations that can only be used for charity. Panama Foundations are made up of a Founder, one or more Beneficiaries, the Panama Foundation Council, Foundation Charter and a Protector. Each of these components plays a vital role in the administration, regulation and operation of the Panama Foundation. Any business conducted by the Foundation, such as investing in stocks and bonds, should be done for the benefit of the Foundation.

Panama Trusts are created by a Settlor and are administered by a Trustee who manages the assets of the trust. An act of Trust is made effective when the Settlor transfers his assets to the Trustee whose responsibility is to manage the assets in favor of the Beneficiary.

Persons that are registered to provide trust services in Panama are required to make a security deposit of USD 250, 000 in the form of cash, Government bonds, insurance company policies, bank securities or drawn or certifies cheques from a local banking institution.

Trust licenses may be cancelled in the event that the a trust service provided fails to offer trust services within one year after having been granted a trust license, the trustee does not meet the objectives of the trust and does not comply with the regulations established by the Panama trusts law, disqualification of the trustee from his position, bankruptcy or dissolution of the trust.

Panama Limited Liabilities are regulated by the Limited Liability Law 24, which was passed on February 1, 1966. Panama Limited Liability Companies or Panama LLCs are similar to Panama Offshore Companies or Corporations and are hybrid entities that were formed by combining elements of both the Wyoming Corporation and Panama Limited Liability Company. Unlike other Panama offshore companies, Panama Limited Liability Companies are not exempt from taxes, but provide an excellent means of asset protection because it is compliant with the policies of the Internal Revenue Service (IRS) in the United States. Panama LLCs can be can be formed by a minimum and maximum of 2 and 20 members respectively, while its name should indicate the activity in which company is intended to be involved and must contain the phrase or abbreviation “Sociedad de Responsabilidad Limitada’ or “S. de R.L’, or “Ltd”, which indicate limited liability. In the vent that a Panama LLC is incorporated by a married couple, the minimum number for forming the LLC increases to three (3). A Panama Limited Liability Company is formed by filing a public deed at the Public Registry, within 30 days after being written. The public deed of a Panama LLC is made available to the public. The deed contains the By-Laws of the company and states the names, surnames, nationalities, civil status, profession and identification number of each of the Panama LLC’s members. This includes the LLC’s name, address, duration, as well as the profit share among the members, total issued capital, the rights of each member, the rules for appointing Directors and conducting general meetings. The minimum paid-up capital of the Panama LLC is USD 2,000 and should not exceed USD500, 000. The paid-up capital forms part of the contributions made by the members.

Panama Corporations are offshore companies that are used for carrying out different types of commercial activities. Panama Corporations provide a means for saving on taxes and accumulating wealth since business can be conducted by a Panama offshore company without being liable to pay any corporate taxes in Panama where the company is registered. Panama corporations are very flexible structures and can be amended accordingly to suit the needs of their owners as may be deemed necessary in the best interest of the company.

Under the Panama Corporation Law, Panama Corporations are capable of exercising the power to sue, acquire a corporate seal, purchase, hold, use and transfer both movable and immovable property, lease property and take mortgages. A Panama Corporation is also able to appoint its own officers and agents, enter into contracts and pass laws, as long as these are done in keeping with the Corporation Laws of Panama and are constitutional based on the By-Laws established for operating the corporation’s and regulating its functions.

In issuing its shares, a Panama offshore company is required to issue share certificates in the name of its members. The share certificate of a Panama company should contain the company’s registration number, corporate capital, share amount of each member, class of share held by the member. In the case of registered shares, the name of the share certificate is required to state the shareholder’s name, while, on bearer shares are assessable and can only be issued until they are fully paid.

Panama offshore company registration services are given only by registered offshore service providers that are responsible for liaising with the Mercantile Registry on behalf of the members of the Panama Corporation and are the first subscribers to the company’s shares for incorporation purposes. The name of any offshore company registered in Panama cannot be the same to another Panamanian offshore company and should contain the word “Corporation” in order to avoid confusion with any other corporate entity.

Panama Readymade Corporations are Panama offshore companies that have been incorporated but have never been used. A Panama Readymade Corporation may be useful for persons needing to begin conducting business with a new company that has no records and never held any bank accounts and would have been formed for over a particular period of time of six months, a year or more.

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