Offshore Foundations

A Foundation is a separate legal entity, without members or shareholders, and is generally established to reflect the wishes of the founder, who may be an individual or a corporate entity. These wishes are contained within the Foundation's Deed of Incorporation, Articles of Association and Bye Laws. Foundations can be established for a fixed or indefinite period of time and can be used for charitable, commercial or for family purposes.

Foundations are a very important component when structuring the ownership of family and corporate assets and are particularly important where Trusts are not generally recognised. They are in many respects similar to corporate entities but afford the protection and continuity derived from the use of Trusts.

The foundations are commonly used for:

1. Administration of the Founder’s assets.
2. Private investments.
3. Holding vehicle of assets or properties.
4. Shareholding participation.
5. Regulation of succession.
6. Business preservation.
7. Secure the wishes of the founder in regards to the disposition of assets.
8. Minimization of tax inheritance.
9. Recurring payments to individually designated beneficiaries and distribution of the Foundation funds to those beneficiaries, in the event of dissolution of the Foundation.
10. Administration of payment to individuals for subsistence, education, training, clothing, and other relief to future generations.
11. Encouragement of family financial livelihood.

Panama:

• Panama makes no differences between Family Foundations and the so called Mixed Foundations; any kind of beneficiaries can be appointed;
• The registration of the Foundation Charter is mandatory but not the Regulations (By- Laws) which is optional, therefore a Certificate evidencing its existence may be requested.
• The Foundation Committee may be formed by persons or corporate bodies, Panamanian or foreign with residence in any part of the World.
• No minimum endowment needs to be contributed in advance.
• Subject to only one Annual Franchise Tax of US$150.00 regardless of its total assets.
• Three-(3) years prescription for creditor claims against the Foundation and its transfers.

Liechtenstein

• Liechtenstein Foundations make a distinction regarding Family or Mixed Foundations, which needs to be previously specified
• The law remits to what is set forth in the laws of the founder’s or beneficiaries’ domicile regarding the right to revoke the creation of the Foundation or its transfers.
• The Constitution Deed and By-Laws need to be recorded at the Public Registry.
• The members of the Foundation Committee must comply with requirements of nationality, residency, and professional activities.
• Foundations are subject to taxes in proportion to their assets plus a fixed annual fee of US$650.00.
• Endowment is required at the moment of the creation of the Foundation
• No prescription for creditors claims against the Foundation and its transfers.

Benefits

1. Confidentiality.
2. Removal of assets from the ownership of the founder in connection with potential liability in the future.
3. Anonymity and complete discretion.
4. Avoids the legal testamentary regulation that implies bureaucratic time and money.
5. Centralization and administration of the assets and patrimony
6. Tax exemption and a recommended vehicle for international tax planning.
7. Avoid problem of international succession related to the domicile of the Founder since Panamanian law is applied.
8. Low costs in inheritance planning.
9. Convenient control of the assets and maintaining indirect influence of the total administration
10. Forced heirship rules of other countries are not applicable to Panamanian Private Interest Foundations.