C0MPLETE ASSET PROTECTION STRUCTURE PANAMA OFFERS GLOBAL ASSET PROTECTION
If you read the article entitled “Protect your Assets”, you know what is at stake when it comes to protecting everything you own.
You probably read the articles about Panama Offshore Corporations and Private Interest Foundations. Now you are ready to learn how to combine these entities for the ultimate in Asset Protection!
The Complete Asset Protection Offshore Structure is a combination of Panamanian legal entities. A Private Interest Foundation owns Offshore Corporations. They provide the utmost in Asset Protection, Privacy, Anonymity, and Convenience!
How It Works: Panama Offshore Corporations own all major assets (real estate, commercial businesses, commercial bank accounts, vehicles jewelry, etc.). Divide your assets into different corporate ownerships. The Foundation acts as a holding company for the Corporations. The Foundation also holds passive investment accounts and bank accounts.
The Private Interest Foundation: The “Panama Foundations” article goes into detail about creating Foundations and their functions. Briefly, let us look at the most important aspects of a Foundation.
The Panamanian Private Interest Foundation is a legal entity that acts like a Trust and operates like a Corporation. Law No. 25 of June 12, 1995 created and regulates Panama Private Interest Foundations.
The Panama Private Interest Foundation is a hybrid of Private Interest Foundation models from three different jurisdictions: Liechtenstein, Switzerland, and Luxembourg. Panama carefully designed the Panama Private Interest Foundation as a more modern, flexible, and affordable Asset Protection & Estate Planning vehicle for people worldwide.
Non-Profit: The law specifically states, "Private foundations shall not be profit oriented." Exception: Foundations may engage in commercial activities on a non-habitual basis or own shares of business companies and receive passive income – such as from rental properties or dividends.
Foundation Structure: The Private Interest Foundation has four main components:
1. Founder: The founder creates the Foundation in the Panama Public Registry. Once registered, the founder ceases to function.
2. Foundation Council: The council serves the same function as directors do for a corporation. Nevertheless, the council has no control.
3. Protector: The Protector ultimately controls the Foundation. The Foundation Council appoints the Protector who remains 100% anonymous. The Protector has full control over the Foundation and all of its assets.
4. Beneficiaries: The Protector issues a Private Letter of Wishes designates the Beneficiaries. The Letter of Wishes is a private document keeping the beneficiaries 100% anonymous. Only the Protector can change or modify The Letter of Wishes.
FOUNDATION PURPOSES: There are four purposes for a Foundation.
1. Holding Entity for the Corporation: While a Foundation has no corporate shares, it can be the sole shareholder of your corporation. You control the Foundation anonymously as the Protector. You appoint the beneficiaries through a private Letter of Wishes. The Protector and the Beneficiaries exist through non-public (private) documents remaining 100% anonymous.
2. Beneficial Owner when Opening Bank Accounts: More and more so-called “tax haven” countries eliminated their bank secrecy laws. Panama banks maintain this information with rigorous confidentiality under their strictly enforced bank secrecy laws. If an owner wishes to remain anonymous, the Foundation can serve as the beneficial owner. The nominee Foundation council can sign the declarations on behalf of the Foundation keeping the true owner 100% anonymous.
3. Fast Distribution of Your Assets to Your Heirs: Under Panamanian laws, no one may freeze a Foundation’s assets under any circumstances (providing the ultimate asset protection vehicle). The Panama Private Interest Foundation cherishes, protects, and distributes your assets to your beneficiaries upon your death or incapacity. Your Foundation’s Letter of Wishes details the Foundations assets, lists the beneficiaries, and designates distribution of those assets to the beneficiaries. Since the inheritance comes from outside of the beneficiary's domestic country, the inherited assets are not subject to any of the standard taxes and legal procedures of that country. Through the Foundation, your heirs will receive their inheritance free of probate, gift taxes, estate taxes, inheritance taxes, or legal delays.
4. Facilitates the Transfer of Funds Offshore, and the Return of those Funds back Onshore: Since the Foundation is a non-profit entity, it may receive donations, and it may give donations/grants, etc. to anyone you choose. You donate your funds to the Foundation. In turn, the Foundation can provide educational grants, charitable donations, etc. to anyone you choose.
To Summarize: Foundations Protect Your Assets, act as your Holding Company, provide total Estate Planning, and can act as a Charitable Entity.
Advantages
Some of the other features and benefits of a Foundation are as follows:
Limited Liability
A Foundation holds its own assets and liabilities separate from those of the founder or any other person. The founder and the Foundation are not responsible for the debts of one another, except where the founder has administered the Foundation in a way that ignores the separate identity of the Foundation. In such a case, a creditor of the founder might be able to invade the Foundation’s assets. In contrast, the Trustee of a Trust (who often is the grantor/creator) may have unlimited personal liability for the obligations of the Trust.
Minimal Public Disclosure
Other than the ministerial act of accepting a proper Memorandum of Foundation for filing, no government approval or action is required for the establishment of a Foundation. The Regulations of a Foundation remain private. No governmental agency supervises or oversees the management and operation of a Foundation. No reports concerning a Foundation’s activities, its income or financial condition or the names of its beneficiaries are filed with any governmental agency.
Avoidance of Testamentary Formalities
Upon the death of the Founder, all of his/her assets go to the Foundation eliminating the need for a will and probate.
Privacy of Assets
Except for the initial endowment of US$10,000, there are no public records as to the assets of a Foundation. There is no obligation for the filing of any public instrument with respect to an increase in the endowment and no filing of financial statements.
No Interference from Heirs: Under Panamanian law, the founder’s heirs cannot revoke the creation of the Foundation, nor object to the transfer of properties to the Foundation. The laws of the founder’s country regarding intestacy have no bearing on the validity of the Foundation – ensuring the Foundation’s objectives in the event of the founder’s death.
In Conclusion: A Panama Private Interest Foundation has many advantages over a Trust. Limited Liability, greater Privacy, elimination of a Will and Probate, less Public Exposure, and Charitable functions are some of these advantages. Panama’s Public Interest Foundation law, Corporation laws, and strict Banking secrecy laws combine to provide the utmost in Asset Protection and Privacy.
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Contributor's Note
Steven Rich is the marketing manager for Panama Offshore Legal Services an English speaking law firm whose website is:
www.panama-offshore-services.com
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