Private Interest Foundations in Panama

Panama Private Interest Foundation Origins

The Panamanian Private Interest Foundation or FIP is inspired by the familiar foundations of Liechtenstein. Panama's FIPs differ from them in that Panamanian law does not distinguish between the familiar foundation and the mixed foundation. One of the beneficiaries may include other persons or entities, in addition to the members of a particular family.

The Private Interest Foundation (FIP) is considered an entity to which its founders endows a patrimony destined to the achievement of the objectives indicated in the constitution document, called the foundation act.

Characteristics of Panama's Private Interest Foundation

Panamanian FIP has several special characteristics that creates an asset capable of change and adapt easily to various reasons for those ones deciding to set up a Foundation.

1. Anonymity

Panama’s government has strict confidentiality laws where whoever person or institution that obtains information related with a Foundation must keep it strictly secret. Those who fails to comply with this law will be issued as economic and criminal sanctions.

When forming a Private Interest Foundation in Panama, the founder, as well as the benefactors, can remain anonymous through the use of the Nominal Founder and the Regulation.

2. Non-sizable assets

The assets of the FIP cannot be seized for its Founder, council members or benefactors' debts. The Creditors of the founders is the one who protects the Panamanian Foundation, making sure is not subject of any judicial actions of executions. However, the creditors of a Founder have the right to object or request the annulment of the transfer of assets that could represent a fraudulent action against their credits.

3. Testamentary purposes

Because the statute clearly states that no right will be granted to forced heirs that could be protected by the laws of other nations, the Foundation is a useful and very flexible mechanism to use for testamentary reasons.

Fiscal benefits

According to Panama’s law, private interest foundations are exempt from all taxes, contributions, and liens (save for the payment of the annual rate of US$300.00). As a result, they are exempt from paying income, wealth, real estate, inheritance, or transfer taxes.

There is no requirement to file annual income statements or financial statements. There is no legal limit on the amount of basic assets that can be held.

To obtain a customized proposal to setup a Private Interest Foundation, please email us at legal@work.pa, contact us by phone or by submitting your information in the form below.