Panama Private Interest Foundations For Asset Protection
Reginald R. Nicholsonian
Protection from rampant litigation, circumventing forced heirship, a hunger for renewed personal privacy, fears with respect to the integrity of your native country's banking system are just a few of the reasons you might wish to take your personal assets offshore. Panama offers numerous methods for personal asset protection and estate planning with the Panama Private Interest Foundation (henceforth PPIF) being particularly suited to those seeking a high degree of anonymity and asset protection.
The Private Interest Foundation was created in 1995 by the legislative branch of the Panama government with the idea of incorporating all the great benefits of trusts with the benefits of a panama corporation. The Panama foundation is based upon the model first established in Liechtenstein. A Panama Foundation has:
- a Founder, who establishes the foundation and funds it with initial assets (referred to as the patrimony and not less than USD 10 000); - a Council, similar to a corporation's board of directors, these members are recorded in public records; - a Protector, appointed by the Council at creation, this position is not strictly mandatory and does not have to be declared publicly; - Beneficiaries, appointed by the Protector and, like the Protector, are optional and remain anonymous.
The real strength of the Private interest foundation is provided to the protector and beneficiaries by the protector. For example, you may want to use your Panama foundation as an asset protection buffer against unfavorable inheritance laws in your country. Panama's foundation laws protect the rights of the protector upon their death by not charging an inheritance tax on the foundations assets.
Intrinsic to the working of the foundation are the Letters of Instruction. These enable the Protector to specify exactly what should happen to the Foundation's asset should something (such as death or incapacitation) happen to the Foundation Protector. It is possible to use the Letters of Instruction to specify the appointment of a new Protector on death and thus keep the Foundation in perpetuity (keeping the PPIF in perpetuity can provide an additional safeguard against forced heirship disputes since Panama will not give credence to the forced heirship laws of other countries). Without a mandatory filing requirement, the Letters may be maintained privately to ensure the privacy of the Protector and Beneficiaries.
Unlike a Panama Corporation, the PPIF is expressly prohibited from engaging in commercial business activity. However, they may carry out commercial activities such as owning corporations that are actively engaged in commercial business activities, provided the profits of those activities are used for the purposes for which the foundation exists. As with all Panamanian entities, tax is not levied on income derived outside Panama.
As long as a Panama foundation is not engaging in illegal activity it is impossible for the assets of a foundation to be sequestered or frozen.
The Panama Foundation offers a very sophisticated, anonymous and almost bullet proof asset protection capability.
About the Author:
|
