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 Foundations


The Panama Foundation Law was established in Panama in 1995. Panama Foundations are unique because unlike other legal entities, Panama Foundations do not have owners and are generally geared towards a specific objective that is aimed at benefiting a person or group of individuals. There are two types of Panamanian Foundations – the Panama Private Interest Foundation and the Panama Charitable Public Foundation, which may at times be referred to as a Panama Public Interest Foundation, as opposed to the “Private Interest” Foundation.

Over the years, besides offshore companies formation we have introduced clients to different second citizenship programs. Under the Dominica citizenship program, once citizenship is granted a certificate of naturalization is given to the applicant to serve as evidence that the person is now a citizen. Citizenship contributions for the economic citizenship programme are paid via escrow directly to the government and not the agent. One of the citizenship requirements of Dominica is that the applicant knows enough facts about Dominica and has a basic knowledge of English.

The concept of the Panama Foundation originated from the Liechtenstein Special Interest Foundations Acts, 1929, and the modern version of the Stiftung. Elements of both of these statutes were combined and formulated into the Panama Foundation Law.

The Foundation Council is responsible for administering the foundation’s assets, fulfill relevant contracts and other matters in which the foundation may be involved, keep the beneficiaries updated on the foundation’s economic situation and transfer the assets held in the foundation to the beneficiaries.

The Foundation Charter may seek to restrict the powers of the Foundation Council by requiring the Council’s members to obtain the permission of a protector, committee or person appointed by the founder (s) before taking any action. Provided that the council has been directed by the protector, committee or appointed person to carry out any decision taken, the council cannot be held responsible for the deterioration of or damage to the foundation’s assets. Except if stated otherwise in the Charter or regulations of the foundation, the Foundation Council is required to give an account of its activities to the beneficiaries of the foundation and, to the supervisory body when necessary. Should the latter not be stated in the foundation charter, the foundation council is required to provide a description of its activities on an annual basis. Any objections to the account of the council should be approved within ninety days from the day that the account was presented by the council.

The foundation charter may also contain clauses for the removal and appointment of members of the foundation council. The founder or beneficiaries of the foundation may request for the members of the council to be removed by legal means in the event that the interests of the council are in conflict with those of foundation’s beneficiaries or founder, the foundation’s assets are mismanaged or if any of the members are convicted of a crime against private property or public faith, incapable of carrying out their functions or file an insolvency or bankruptcy report.

In the event that the Panama Foundation chooses to establish one or more supervisory body, its functions may include overseeing the work of the Foundation Council so as to protect the rights and best interests of the beneficiaries, demand the accounts required from the Council, amend the foundation’s objectives when deemed necessary, appointment of new council members, approval of the council’s decisions as may be indicated by the Charter, exclusion and addition of beneficiaries as may be stipulated in the foundation charter.

A Panama Foundation may be dissolved if it has reached its termination d ate, fully met its objectives or decides that the goals set are unattainable, becomes insolvent, bankrupt, loses its assets or is revoked.

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