|
|
PANAMANIAN FOUNDATIONS OF PRIVATE INTEREST
Law No. 25 of June 12, 1995, establishes the principles that regulate the constitution and arganization of foundations of private interest in the Republic of Panama. This juridical entity is based in the trust and in the laws of the Principality of Liechtenstein. The foundation of private interest is a juridical person which object is the acquisition of a patrimony to be managed according to the rules and will of the founder. It is not a foundation of public interest but of private interest . Foundations of private interest may be constituted to operate upon their creation or to operate after the founder passes away, through any of the following methods:
1. By private document suscribed by the founder, whose signature must
be legalized by a Notary Public. In either case, if the foundation is created to be effective upon the founder's death, the formalities for the granting of wills will not be required. In this same case, although the foundation is created to be effective after the founder's death, it shall be deemed constituted in respect to all donations made to it, by the founder or any other peson. II. PATRIMONY The juridical purpose of a foundation of private interest is the management, conservation and protection of a patrimony given to it, following the founder's directions. The patrimony indicated in the document of constitution of the foundation must not be less than ten thousand dollars (US$ 10,000.00). That does not mean that the foundation must have assets worth that amount right after the constitution of the foundation. This patrimony may be expressed in any currency. The patrimony can be increased at any time. The assets of a foundation of private interest can originate from any lawful business and can be constituted from goods of any nature, present or future. Other goods and assets can be incorporated to the patrimony at any time, by the founder or by third parties. Foudations of private interest may not engage in lucrative businesses, that is they can not engage in the exploitation of commercial or industrial businesses. Nothwithstanding this, foundations can perform non customary mercatinle activities or exercise their rights derived from the titles representing the capital of corporations which are part of their patrimony, provided that the revenues or profit resulting from those activities be for the benefit of the foundation exclusively. The foundation can make any kind of lawful investment through financial companies, brokers For all legal purposes, the foundations' assets will constitute a separate patrimony from that of the founder. Therefore, they can not be seized nor restrained, nor can be subject to any precautionary action, except for obligations or damages caused by the acts of the foundation in the performance of its objects. III. POWERS Foundations must have a Counsel, which will be in charge of the management of the foundation. Its powers and responabilities will be established in the foundational or constitutional chart. Unless it shall be a juridical person (company or entity), the number of members of the foundation counsel may not be less than three (3). The foundation chart or its by-laws may establish the creation of an inspection or supervision committee or entity, for the protection of the beneficiaries' interests. These "protectors" may be a company, entity, a natural person or persons and may have the following powers, among others: (i) To watch over the fulfilment of the ends and purposes of the foundation and the rights and interests of the beneficiaries. (ii) To ask the foudation counsel to render accounts and submit reports concerning the management of the foundation. (iii) To amend or modify the objects and purposes of the foundation whenever their performance shall become impossible or too expensive. (iv) To appoint new members at the foundation counsel due to temporal or permanent absence of any of them or due to expiration of their terms. (v) To appoint new members at the foundation counsel due to temporal or accidental absence of any of them. (vi) To increase the number of members of the foundation counsel. (vii) To approve and /or countersign the decisions or acts of the foundation counsel indicated in the foundation chart or by-laws. (viii) To keep the assets of the foundation and to look after and procure their use according to the purposes described in the foundation chart. (ix) To exclude beneficiaries from the foundation and to include others according to the dispositions of the foundation chart or the by-laws. IV. FOUNDATION CHART Private interest foundations shall be governed by their foundation charts and by-laws, as well as by the provisions of Law 25 of 1995 and any amendments or complementary rules. The foundation chart must contain: (i) The name of the foundation, expressed in any language, with latin alphabet characters, such name not being equal to that of any other foundation already registered, nor so similar as to create confusion. the name shall include the word "foundation" to distinguish it from any other form of natural or juridical enties. (ii) The initial patrimony of the foundation, indicated in any currency. It shall not be less than Ten Thousand US dollars (US$ 10,000.00). The patrimony need not to be paid in upon constitution of the foundation. (iii) The complete names and addresses of the members of the foundation counsel, to which the founder may be part of. (iv) The domicile of the foundation. (v) The name and address of the resident agent of the foundation in the Republic of Panama, which must be a lawyer or law office, who must countersign the foundation chart before its incorporation into public deed. (vi) The objects of the foundation (vii) The way or method of designating / appointing the beneficiaries of the foundation, among which the founder can be included. Usually the founder is not a beneficiary nor a member of the counsel but the lawyer or law office that create the foundation on behalf or by instructions of the interested party. (viii) The right to amend or modify the foundation chart when considered convenient. (ix) The duration of the foundation. (x) The disposition or destiny of the assets of the foundation and the liquidation method in case of dissolution of the foundation. (xi) Any other lawful clause that the founder or insterested party may deem convenient.
Foundations of private interest can be created with no expiration date, that is, perpetual. But they can be dissolved due to: (i) Expiration of its term, according to the foundation chart. (ii) Accomplishment of the objects and ends for which it was created. (iii) In case of insolvency, stop of payment of its obligations or bankruptcy. (iv) Total loss of the foundation assets. (v) Intended dissolution, according to the foundation chart. (vi) Any other reason established in the Law or in the foundation chart. VI. TAXES Foundations of private interest in Panama are exempt of payment of taxes related to their creation, amendment or dissolution. they must pay registration fees and a single annual franchise tax of US$ 250.00. Late payment of this franchise tax will arise a surcharge of US$ 50.00. VII. ADVANTAGES
(i) If we compare it with the Liechtenstein foundation of private interest,
at the death of the founder, in Liechtenstein, the foundations are open
to objections on the part of his/her successors or heirs, situation
which in Panama is limited by article 14, as not been opposable in inheritance
matters, and article 15 to prescription of creditors rights in cases
of fraud.
(vi) In Panama, it is not required that a minimum capital be paid prior
to constituting the foundation. These are subject to negotiation with the interested party, according to their needs and volume, if acting as an intermediary.
|
||