The legislation allows for the set-up of one type of foundation: the Panama Private Foundation.
Private Foundations: Set up for the benefit of a named person or class of persons called beneficiaries. The foundation’s patrimony is owned by the foundation itself (due to its separate legal personality) and is administered by designated persons (known as ‘administrators’) for the benefit of such beneficiaries.
Separate Legal Identity
Unlike trusts, foundations have a legal personality and the foundation itself becomes the legal owner of the foundation property. Based on Panamanian company law principles and Liechtenstein law provisions, Panamanian foundations require the appointment of administrators who are responsible for the administration of the foundation’s property. The public deed creating a foundation must be registered. However, only a minimum of information is available to the public and confidentiality is retained.
Key Features of a Foundation
Means of Establishment: A foundation can only be constituted in writing, either by a public deed published by a Notary, or by a will. The foundation deed must be registered with the Public Registry of Panama.
Assets: The assets of a foundation may originate from any lawful business or activity and may consist of present or future assets of any nature.
Foundation deed: The foundation deed must contain the following information:
Legal Form: Once the foundation is established, the deed is published, and the foundation is registered with the Public Registry of Panama, a new legal person is created and the foundation itself becomes the owner of the foundation property.
Termination: Except when foundations are used as collective investment vehicles, in securitization transactions or in the case of purpose foundations (which may be established for an unlimited term), foundations are valid for an unlimited period.
Founder: The rights of the founder:
Duties of the administrator:
Conditions for the administrator:
Supervisory Protector: The deed can provide for a supervisory council or the office of protector. They usually exercise supervision over the acts of the administrators, and may be vested with powers of appointment or removal of administrators.
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