Panamanian Private Foundations

BASIC CHARACTERISTICS OF THE PRIVATE FOUNDATION

The main characteristics of the Private Foundations are the following:

1. It is the creation of Assets made up of donations.

The promises of donation and the donations themselves may come from the Founders or from third parties. The Assets may arise from any lawful juridical act and include assets of any nature, whether present or future. They are usually shares, any documents indicating participation in mercantile companies, titles of any nature, bank accounts and real properties.

The minimum initial donation is US$10,000, which may be expressed in any currency. This minimum donation acquires an obligatory nature once the Foundation has been registered at the Public Registry.

However, where the Foundation has been created to take effect after the death of the Founder, any promises or transfers made to the Foundation by such Founder are obligatory even if the Foundation is not registered at the Public Registry before the death of the Founder. In other words, the Foundation Charter is a document of obligatory performance in respect of the Founder’s estate. As the Foundation has no owners, the total of the Foundation Assets is not as relevant as the Authorized Capital of corporations, where the share certificates represent percentages of participation in the capital.

As the Foundation Assets are comprised of the initial donation of US$10,000.00 plus all the contributions that are made from time to time, there will be no real need to amend the Foundation Charter unless the client should require it particularly in order to give registration publicity of the Foundation’s actual assets.

 

2. A Foundation’s assets constitute an independent estate.

The contributions made to the Foundation and its earnings may not be seized, attached or be the object of any precautionary action or measure, save for obligations incurred or for damages caused upon achievement of the Foundation’s aims and objectives, or for the beneficiaries’ legitimate rights.

The Foundation’s assets may not be used to answer for the Founders’ obligations nor for those of the Beneficiaries, nor for those of the Foundation Council members, nor for those of any person, whether or not involved with the Foundation.

 

3. A Foundation protects the Founder’s hereditary wishes.

The Founder’s heirs shall have no right to revoke the creation of or the transfers made to the Foundation, nor may they object to the Foundation on the grounds of provisions that originate in forced heirship laws of the Founder’s domicile or of the Beneficiaries’ domicile.