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The private interest foundation is not taxable for activities outside Panamanian jurisdiction. It’s a flexible tool for estate planning and can function as a holding company alternative.
We can set up a new Panama Private Interest Foundation in just five business days. If you wish to expedite the formation, it can be completed within 24 to 48 hours. Please note that these time frames are approximate and can vary depending on the specific circumstances.
It’s recommended to consult with our legal experts attorneys, NDM Law firm is a law firm with a lot of experience in forming Private Interest Foundations for more detailed information.
Legal entity established in Panama.
A Private Interest Foundation (PPIF) is a type of offshore private foundation that was carefully designed by the Panamanian Government as an offshore asset protection solution under the laws of Panama. It is based upon the Liechtenstein ‘Stiftung’ (a family foundation), as well as the private foundation structures of Switzerland and Luxembourg.
The main difference between an offshore private foundation and an offshore company is that a private foundation cannot engage directly in any business activity that is commercial in nature. However, it is permitted to possess investments like real estate, other businesses, stocks, bonds, and similar assets.
The specific structure of a Private Interest Foundation
A Panama Foundation stands out from other legal entities in Anglo-Saxon law. Unlike entities like corporations, it isn’t a personification of individuals, and no specific people or entities own it. The assets of a Panama Private Interest Foundation (PPIF) have a distinct legal identity, separate from the personal assets of the Founder, Protector, Council Members, or Beneficiaries. This separation safeguards the assets of everyone involved.
In Panama, a Letter of Wishes can be created to outline how the foundation’s assets should be managed after the Founder’s passing.
It’s worth noting the differences between a Panama Private Interest Foundation and a Panama Charitable Public Foundation. The latter is used for charitable purposes. However, both play unique roles in offshore planning. While a Panama Charitable Foundation focuses on charitable goals, many characteristics of a PPIF remain similar in both types of foundations.
Trusts and Panama Foundations share similarities, but they are not the same.
A Panama Foundation is not a trust, but it is a separate legal entity without shareholders or directors. It is a hybrid of a trust and a corporation. The founder of the foundation can be either a company or an individual, and a declaration by the founder establishes the foundation.
The process of setting up a Private Interest Foundation
To establish a Private Interest Foundation in Panama, a Charter of the Foundation must be drafted and filed at the Public Registry. The following information must be officially registered to establish a Foundation:
- Name and Purpose of the Foundation
- Name of the Foundation Council Members
- Address of the Foundation
- Appointment of a Registered Agent
- Patrimony
The name of the foundation may be in any language and must include the word “Foundation” to distinguish it from other kinds of juridical persons. The foundation’s goals can encompass anything except making profits.
The Foundation Council is charged with the task of administering the Foundation assets in a manner consistent with the purpose of the Foundation as articulated in the Charter of the Foundation. The Foundation Council consists of a minimum of three individuals, including the founder if desired. These individuals are not required to be Panamanian residents. Alongside, a Private Interest Foundation incorporates a set of Regulations, akin to by-laws.
In contrast to the public filing of the Memorandum of Foundation, the Regulations remain confidential and are not registered in any public registry. Consequently, it is within the Regulations that individuals typically express their preferences regarding beneficiaries and the distribution of Foundation assets.
Moreover, this private document allows the appointment of a Protector, responsible for overseeing the Foundation Council’s activities. The Regulations are flexible and can be amended at any time.