Panama as an offshore destination has one of the most robust infrastructural and legal environments that helps businessmen and corporations to achieve their asset protection objectives among other financial objectives. Its location is strategic and it is well endowed as a renowned center for international finance.
Panama Foundations are created pursuant to and governed by Panama Law No. 25, 1995. This law provides for a robust framework for the functioning of offshore foundations.
The Law provides for the creation of a private foundation by one or more natural or juridical persons, acting either by themselves or via third parties and in accordance with the provisions of the law. This article also provides for the endowment of a patrimony as well as its increase by the founder.
Excludes the application of provisions of Title II of Book 1 of the Civil Code of the jurisdiction to Panama private Foundations. It also stipulates the governing of the foundation to be in accordance with its foundation charter and regulations in addition to the provisions of the Panama Law No. 25 and other applicable regulatory provisions.
Clearly stipulates that Panama Foundations are to be non-profit although they are permitted to engage in mercantile activities on a non-regular basis.
Provides for the time and means by which a Panama Foundation may become effective and it may be upon constitution or by following the death of the founder. Thus, it becomes effective either by private document duly executed by the founder or by directly by a notary public and in either case, at the place of constitution.
Provides that the name of the Foundation must not be similar to any one already in existence and must contain the word ‘Foundation’ in order to distinguish it from other persons, natural and juridical possessing a different nature.