The main document: The Foundation Charter.
For those readers who are not familiar with the concept of a foundation, it consists in the endowment of a patrimony for a specific purpose (object) determined in the document whereby the foundation is created and internally organized known as the Foundation Charter.
Once the Foundation Charter is registered in the Public Registry, the property endowed or to be endowed becomes an estate separate and apart from that of the founder by acquiring a juridical personality of its own, thus becoming a private foundation.
The Bodies.
An appointed body known as the Foundation Council is entrusted to pursue the objects of the Foundation.
The person’s who create the endowment is known as the Founder and the persons who benefit from the endowment (traditionally the founder and/or members of his family) are known as the Beneficiaries.
The key document: The Regulations.
The information about names and rights of the beneficiaries of the foundation is usually provided to the Foundation Council by means of a private and confidential document (that is to say a document which does not need to be registered in the Public Registry) known as The Regulations.
Contrary to a traditional corporation, a Private Foundation does not have shares, it does not recognize shareholders and the founder does not acquire any such rights in relation to the foundation’s property. The Law does recognize, however, the beneficiaries or the persons in whose benefit the foundation is created, which can include the founder.
Practical uses of a Private Interest Foundation.
The possible uses of a private foundation are so broad that we can safely ascertain that practically all of the objectives which can be achieved by the widely used “trusts” can also be accomplished by properly structuring a Panama Private Interest Foundation.
Panama PIF’s are mostly utilized as the ultimate holder of a given patrimony administered by professionals for the benefit of the founder and/or other appointed beneficiaries, allowing the founder, at the same time, to plan in advance (in the Regulations) for the transfer of the benefit or the orderly succession of such patrimony in case of his sudden demise.
