Functionaries of a Panama Foundation
The Foundation has a Founder, a Council, a Protector, and Beneficiaries. Below we have explained what role each of them plays in the Foundation:
The Founder is the person or entity that establishes the Foundation in the Public Registry of Panama. The Founder has no influence over the control of the Foundation, and is only recognized as the individual who presented the Foundation articles in the public registry when the entity was originally registered.
The Foundation's Council serves the same purpose as the board of directors on a corporation. The council members are each registered in the public registry with their names, addresses, and identifications as council members to the Foundation. The council members can be either individuals or entities of any nationality and resident of any country.
The Protector is the person or entity who ultimately Controls the Foundation and all assets held within it. The Protector is appointed by the Foundation Council when the Foundation is created, however, once the Protector is empowered, the Protector can then remove the council members at any time without consent of any one else.
Unlike a corporation that issues share certificates to certify who the owners are, the Panama Foundation does not have owners, rather it has Beneficiaries. The Foundations Beneficiaries are appointed by the Protector through either a simple, privately written Letter of Wishes, or through a more formal set of Foundation By-Laws.
Uses Panamanian Foundation
To own family businesses and thus avoid inheritance taxes
To guarantee payment of money or individual asset distribution to members
of one or more families for their subsistence, education, clothing and
other living expenses, or as a mechanism by which their
children/grandchildren may partake in their parents/grandparents’
earnings. In Europe, private foundations for the aforementioned purposes
are known as “Family Foundations”
To make scientific, humanitarian, philanthropic, religious or charitable
donations or to manage funds reserved for these purposes
To protect disadvantaged persons, at a risk
For the benefit of family members, other persons or institutions. Multiple
purpose private foundations are known in Europe as a “Mixed Foundation”
To act as the administrator of employee benefit schemes and
employee pension plans
As a substitute for a will, thus avoiding complicated inheritance
procedures, subsequently explained more fully in detail
As a substitute for marriage or pre-nuptial agreements
To own shares, interests and stocks of private companies
As a vehicle for owning patents and intellectual property and for receiving
royalties and other forms of associated income
As a vehicle for investing in time deposit accounts, stocks, bonds or
As a vehicle for owning real estate or valuable art work
To avoid forced heirship rules
To avoid political or economic instability
For any asset protection purpose
The Foundation Charter
The Foundation Charter contains the name of the Foundation’s Initial Assets; the appointment and addresses of the Foundation Council members; the Foundation’s domicile; how Beneficiaries are to be designated; the rules for amending the Foundation Charter; the Foundation’s duration; the assignment of the assets and how the Foundation is to be dissolved and liquidated; and any other lawful clause as the client may deem appropriate.
The Foundation Regulations
The Foundation Regulations contains the make up of the Foundation Assets, the powers of the Foundation Council; the form of administration; the Beneficiaries of the Foundation; the benefits corresponding to each Beneficiary; the rules on the distribution of benefits; the rules on the rendering of accounts; the class of the Beneficiaries and how they may be varied, substituted, removed or added; the rules of remunerations; the appointment of the Protector and his powers; how the Foundation Assets may be liquidated; and other areas requiring regulations.