Panama Private Interest Foundation is a very versatile entity from our standpoint compared to the rest of the entities. In most of the cases that we dealt with, an offshore company will be able to play its role well. But there are rare cases which require us to suggest to our customer to set up a Panama Private Interest Foundation. Let us discuss Panama Private Interest Foundation and we will show you the advantages of a Panama Private Interest Foundation.
The key difference between a Panama Private Interest Foundation and an offshore IBC.
In ever IBC, there is at least a director, which is the person managing the IBC. There is also the owners which we call it the shareholder. In some cases, the owners are not the ultimate beneficiaries. Why is that so? Those who use nominee shareholder will have a very different owner and ultimate beneficiary. There are many reasons regarding this, it can be due to privacy or asset protection issue to engage a nominee shareholder. We cannot ignore the fact that a nominee shareholder needs to declare the ultimate beneficiary owner when dealing with financial institutions. However, in a Panama Private Interest Foundation, you have the foundation council members to manage the foundation. The founder is not the owner or the beneficiary of the foundation. In the foundation documents, there is a foundation chapter which lists down all the facts about the foundation which include the beneficiaries. The beneficiaries can be anyone appointed by the founder at the initial stage of the foundation. In another word, the Panama Private Interest Foundation is a structure that has no shareholder but it has beneficiaries.
How does this affect the founder?
The founder is usually someone who tries to segregate its assets. If someone is after the founder's asset or sued the founder for personal liability, all the assets of the at stake. In case there is an injunction, all the assets will be frozen. But if the assets in the Panama Private Interest Foundation do not represent the assets of the founder, it is the Panama Private Interest Foundation that owns the assets. As a result, it cannot be frozen. However, there can only happen if the founder established the Panama Private Interest Foundation 3 years before his creditors go after him. At the same time, we do not advise the founder to become the beneficiary which may defeat the purpose of having a foundation. We can have another offshore company to act as a beneficiary of the foundation. It is easy to change the owner of the offshore company.
What are the advantages of a Panama Private Interest Foundation?
There is no foreign exchange control, this means that the Panama Private Interest Foundation can send funds in and out of Panama without any restriction if it has a bank account in Panama.
There is no need to put in your own name to establish a Panama Private Interest Foundation. Although we require 1 founder and 3 foundation council members to establish a Panama Private Interest Foundation, these can be provided by us. The fee is minimal and we can arrange for you to become the protector which can have the full control over the Panama Private Interest Foundation.
There is no need to audit. An offshore company has this advantage as well. We believe this will bring down the administrative cost of as well as there is no need to incur accounting cost.
Any revenue derives from the Panama Private Interest Foundation is exempted from tax. If a Panama Private Interest Foundation owns a company in Singapore, the subsidiary needs to pay the tax in Singapore but it is not taxable in Panama provided there is no income from assets or businesses in Panama. As a Panama Private Interest Foundation, it can hold assets but it is not advisable to become an operational entity. However, it can hold shares of a company that has operational revenue.
All the assets transferred into the Panama Private Interest Foundation is protected from creditors of the founder.
The maintenance fee is the lowest compared to other foundations. The yearly maintenance fee is cheaper than some of the offshore company that we know.
How to initiate a Panama Private Interest Foundation?