A Panama Offshore Foundation is otherwise known as Private Interest Foundation and is an entity which may be created for various purposes such as asset protection and for the benefit of one or more individuals, a family or a particular social purpose.
Asset protection as an objective of a Panama Foundation is achieved by using the Foundation as a holding entity for personal assets which then ‘owns’ and holds those assets including corporation shares, bank and investment accounts, real estate etc thus removing ownership from the person’s name and transferring same to that of a foreign entity. The effect of this is to mask the ownership of the assets since the foreign entity ‘owning’ them has no owners, rather beneficiaries who are privately appointed and therefore anonymous.
A Panama Foundation may also be used in the transfer and/or receipt of funds from offshore sources thus enabling owners to donate to it and later use it to provide grants for purposes such as education to named beneficiaries.
While Panama Foundations may not actively engage in profit-making commercial ventures, they may engage on such activities from time to time insofar as the proceeds from those ventures are used to fulfill the objectives of the Foundation. Traditional business enterprises in which Panama Foundations are not allowed to participate include consulting services, wholesale or retail businesses among others.
Panama Foundation assets can neither be sequestered nor embargoed thus insuring them from legal attacks so long as such attacks are civil, not criminal and the assets are not held outside Panama jurisdiction.
Panama Foundations are also effective in avoiding inheritance taxes while circumventing most of the lengthy processes that attend the passage of assets from one family generation to another. Beneficiaries of such Panama Foundations receive assets exactly as was bequeathed to them.