Panama Private Interest Foundations
Foundation Charter & Regulations
Two main documents constitute a Panama Private Interest Foundation, The Foundation Charter and its Regulations (also called by-laws).
The Foundation Charter.
The fact that the Foundation Charter needs to be registered offers the Panamanian vehicle more judicial safeguards. It grants the Public Registry the elements to issue a “Certificate of Public Registry (also called Certificate of Good Standing or Extract), thus ensuring the actual existence of the Foundation. This document may be legalized by Apostille, and it will prove to be a great tool for the prompt opening of bank accounts in the name of the Foundation.
The Foundation Charter must include the following information:
- Foundation name.
- The Founder name.
- The initial capital of the Foundation (usually US$10,000)
- Name and address of the 3 member or members of the Foundation Council.
- The domicile of the foundation.
- The name and domicile of the Resident Agent of the foundation in Panama.
- The purposes or objects of the foundation.
- The manner of appointing the beneficiaries of the foundation.
- The reservation of how to modify the Foundation Charter.
- The duration of the foundation.
- Any other clauses which the founder may consider convenient.
Traditionally, any information containing beneficiary names and their rights over the foundation property is written into the Regulations. Consequently, the beneficiaries’ identities and succession dispositions do not need to be revealed to third parties.
The law places practically no limits upon the structuring of the beneficial interests of a foundation. One of the more common scenarios is for a Founder to designate himself as a beneficiary for life and appoint successive beneficiaries upon his death.
The law further enhances the confidentiality of this instrument by creating in the Foundations Law article 35 severe sanctions (fines of up to US$50,000 and imprisonment of up to six months) for breach of the duty to maintain the information confidential. This obligation applies to members of the Foundation Council and of the supervisory bodies and public or private employees having any knowledge of the activities, transactions, or operations of the foundation.
Furthermore, Regulations may be kept outside the country, in the hands of the Founder, his fiduciary agent, the Protector, or any other person or institution vested with the confidence of the Founder.
There is no need to open public proceedings if the Founder dies, and his wishes regarding the use, transference, and final destination of the Foundation assets can be carried out privately by the Foundation Council. For all of the reasons mentioned above, the Panama Private Interest Foundation has been called “the perfect living will.”
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Panama City, Panama
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