Panama Private Interest Foundation
The Panama Private Interest Foundation (PIF) is considered the most secure asset protection tool in the world.
The Foundation is neither a
trust nor a corporation but a combination of the two. Foundations can own bank accounts, stock brokerage accounts, real estate anywhere in the world, art, gold, boats, airplanes, automobiles and also corporations.
Foundations have no owners under Panama Law. The beneficiaries and protector (effective controller) of the company do not have to be publicly registered anywhere.
Foundations cannot directly engage in business but they can own companies which conduct business. For this reason we advise using a PIF to hold another company such as a panama corporation, leaving you free to carry-out tax free transactions. This combination will also offer a second layer of privacy. Since the shareholders of a panama (bearer-share) corporation are anonymous, and the corporation is held by a foundation which by definition has no owner, it becomes very hard to prove beneficial ownership for either.
Panama has NO tax treaties with other countries, and tax evasion is not considered a crime. It also has one of the strongest bank secrecy laws in the world. Revealing confidential information will result in a fine of imprisonment. Bank secrecy can only be broken for serious offences which are crimes in both Panama and the country seeking information, such as money-laundering, drugs or terrorism.
Formation
- Can be formed within 2-3 working days
- Foundation has no legal owner and the assets of the foundation are separate from those of the founder, officers and beneficiaries
- A PIF is registered by a Founder and managed by a council. These can be natural persons or corporations and are listed in a public registry. CC can provide nominee founders and council members
- Both the protector and beneficiaries can be appointed through a private set of written instructions which can be kept anywhere
- The purpose of the foundation and distribution of assets/income can be set out in a private letter which is legally binding. What kind of instructions you give are entirely up to you and can be extremely specific
- Completely tax free for income derived outside of Panama
- No requirement to file annual meetings
- No forced heirship
- Transfer of assets to the foundation can be effected in private
- Minimum Initial Capital 10,000 USD
Management
Foundations are managed by a council of at least 3 persons, who may also be corporate bodies. Since councilors are publicly registered, many customers find it convenient to appoint nominee councilors, which Capital Conservator can provide for an additional fee.
The council is supervised by a protector, who does not have to be named in any public register. In practice the client usually takes the role of the protector. The protector has de facto control of the Foundation, and his exact role and duties can be expressed in a private letter.
Taxes
Panama taxes on a geographical basis. As long as your income does not come from Panama there is no income tax due and no need to file a tax return. Panama has no capital gains tax on bank interest or stock market gains and no inheritance tax. The only charge is a yearly registration fee of 300 USD.
Protection against seizure
Panama does NOT view Tax evasion as a crime. It is not a part of any tax treaty. No will gain access to your foundation or its funds using tax as a reason. This will only happen if you have committed a serious crime. According to panama law, foundation assets not considered subject to sequestration or embargo. This means asset cannot be frozen as a protective measure before a full trial is gone through. Creditors have a right to contest transactions they think are fraudulent, but have a time limit of 3 years from the date of the transfer. In practice it can take easily longer than this just for the case to get to court.
Privacy
Panama’s Confidentiality:
"Any person that in the course of his occupation, employment, profession or activity obtains knowledge of confidential information that in the event of being made public could inflict damages, and such person discloses that information without the consent of the concerned party; or in the case that disclosure of such information were not necessary to safeguard a higher interest, shall be punishable by imprisonment of 10 months to 2 years or a comparable fine, and the inability to practice his occupation, employment, profession or activity for not more than 2 years."
Panama is part of the MLAT (Mutual Legal Assistance Treaty). If the crime in question is serious (drugs smuggling, money-laundering, terrorism) it will respond to requests for information under the following conditions:
- The activity under investigation must be a crime in BOTH countries. (again tax evasion is not a crime in Panama)
- The requesting country MUST show that there is no other way for it to obtain this information and that without this information it cannot successfully prosecute the case.
- The requested information must be specific. No fishing expeditions.
- The requesting country must file a criminal case in its NATIONAL courts. Minor criminal cases usually are not brought into the NATIONAL courts
After all these conditions are met, the request is sent through diplomatic channels (which are slow). Panama then considers the request. Panama does not like to break its bank secrecy laws. Panama may then ask for more information or clarification or do its own investigation into the matter to see if the matter warrants breaking bank secrecy. Many of these requests are NOT honored by Panama and it can deny the request on any of the grounds listed above.
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Panama Private Interest Foundation with standard formation documents costs USD2,450. Special provisions are priced according to complexity. |
