FREQUENT
ASKED QUESTIONS ABOUT PRIVATE INTEREST FOUNDATIONS IN
PANAMA
1.
What is a Foundation of Private Interest?
2.
Which are the main elements of a Private Interest Foundations?
3.
It is possible to had the goods in life at name of a Private Interest Foundation?
4.
What is and Who can be founding?
5.
Which are the rights and obligations of the founder?
6.
What is the Foundation Council?
7.
Which are the rights and obligations of the council?
8.
Who can be beneficiary of a Private Interest Foundation?
9.
What is the resident agent?
10.
Who is the owner of the goods given to the Foundation?
11.
Can be kidnapped the goods given to a Foundation?
12.
Is a Foundation a Private Testament?
13.
Which are the objectives of a Panamanian Private Interest Foundation?
14.
What is the Foundational Patrimony?
15.Which
are the steps to create a Private Interest Foundation?
16.
How is produced the liquidation of the Fundational Patrimony?
1. What
is a Foundation of Private Interest?
A Panamanian Foundation of Private Interest, consists simply of the following:
A person (natural or legal) “founds to another person (legal) to who
transfers or yields goods of its property, so that this administers them and
protects as well in favor of certain beneficiaries, who have been named by
who the cover. All this structure in a document named “Original Act” and
a private document denominated “Regulations”.
2. Which are the main elements of a Private Interest Foundation?
The main elements for the existence of a private interest foundations are:
The Organization: it refers to the distribution of the beings or people who
participate in a foundation. The Patrimony: they are the goods, are these furniture
(example: art works, bank accounts) or buildings (property, or apartments).
Private Interest: it refers that a Foundation must be created with the object
to benefit or to favor any person, being this an individual, a family, a company.
The NO-END of profit: it means that a Foundation of Private Interest is created
without the primary intention to perceive gains. Utilities or yield in money.
3. It is possible to have the goods in life at name of a Private
Interest Foundation?
When giving goods or properties, and placing them at a Private Interest Foundation
name, is used what in law we call the theory of “the free disposition
of the goods”, accepted totally by countries with civilest tradition
like ours. This consists that a person can arrange in life of its patrimony
in any way they want. This means that, it can: sell, donate, give them
in hypothecating guarantees or pledge, rent it, lend it and even destroy them;
as long as they do not have limits of social interest or public.
4. What is and who can be founding?
The concept of founder under our law of Foundations of Private Interest is
very simple. The Founder is the person to who is imputed the creation of a
Foundation. This person can as much as national or a foreigner. It can be a
person or several people simultaneously. But they are some limits to the person
who acts as a founder, since this must have ability to act in the legal world.
Is to say, neither the lunatics, nor the deaf people, nor the minors (young
girls under 12 years and young boys under 14), are able to act like founders.
5. Which are the rights and obligations of the founder?
Between the rights of the Founder, we found the following ones:
1. To establish the limits, effects, rights and obligations
of all the people who participate in “the foundational business”,
the Foundation council, the protectors, and the beneficiaries.
2. To revoke the creation of the Foundation properly (when therefore the original
act settles down this specifically.)
3. To receive again the goods transferred to the foundation (when therefore
it is settles down specifically in the act of transference of the goods.)
4. To reform legal documents of the Foundation, is to say to the original act
and the regulations.
5. That their goods do not get mix with the goods yield at name of the foundation.
This right is acquired when it exist two separated patrimonies in two “different” people.
6, Reserve yourself the right to change the members of the Council when the
interests of this are not compatible.
7. To designate control organs, for the correct execution of the aims of the
foundation, such as auditors, lawyers, accountants, bankers, as well as “a
protector” for this.
8. To demand strict confidentiality to the protective members of the Council,
as well as to the public servants and private companies, that has knowledge
of the activities of the foundation.
The fundamental obligation of the founder is to adapt the goods to the Foundation
of Private Interest, once registered “the original act” in the
Public Registry.
6. What is the Foundation Council?
The Foundation Council is the one in charge of “the Administration”.
Their members represent the legal person whom the foundation constitutes before
the State and others third people. The people who form the Council must be
able to administer their goods. “The Foundational Council” is forced,
to follow strictly the rules, conditions, limitations and rights established
by the founder in “the Foundational Act” and its regulations. Like
practical recommendation, the people who form the Council must have good credit
and banking references.
7. Which are the rights and obligations of the Council?
The determination of the limitations and obligations of the Council are very
flexible. Their responsibilities can widely determine in a legal documentation
of the Foundation. Even existing this freedom, to law establishes some general
parameters for the Council:
1. Administrate the goods given to the Foundation throughout the period of
existence.
2. To sign legal documents in name of the Foundation
3. Present annual reports to the beneficiaries during the Administration of
the goods or later to its delivery.
4. To give the goods (given in its Administration) to the beneficiaries, according
to the rules established by the Founder in legal documents.
8. Who can be beneficiary of a Private Interest Foundation?
The beneficiaries are simply the people “favored by the foundation in
accordance to the established by the founder in the foundational act or the
regulations. From a practical point of view, the beneficiary can be “any
person”, “national or foreigner”, “natural or legal”.
9. What is the resident agent?
Is a lawyer with Panamanian suitability or a Lawyers firm. Generally the one
in charge of the writing of legal documents of the foundation outside the
Panamanian territory, needs a representative who resides where the foundation
was registered, Panama.
10. Who is the owner of the goods given to the Foundation?
The goods that are transferred to the foundation are of the foundation property
exclusively; therefore, all the goods transferred correctly to the foundation
are of their private property.
11. Can be kidnapped the goods given to a Foundation?
The right guarantees that the goods given to the foundation could not be kidnapped
or be obstructed. In fact, this benefit is possible thanks to the fact that
the founder and the foundation are two different people. The founder when making
the crossing of his goods to name of the foundation turns to this in the new
holder of the goods; and therefore, the patrimony of the founder and the patrimony
of the foundation are transformed into separated patrimonies, that are not
confused. This benefit, of “ no kidnapping”, has two limitations:
1, Contracted obligations of the foundation: when the foundation acquires debts
contracted in the fulfillment of its aims, through some type of contractual
obligation.
2, Obligations no contracted of the foundation: when they founded it acquires
no contracted debts, in the fulfillment of his aims, through some extra contractual
type of obligations, they are born not contracted creditors that can extend
preventive measures to the goods of the foundation.
12. Is a Foundation a Private will?
In a foundation, the founder (like a tester in the will) can freely arrange
his goods, putting like beneficiary of these goods the people who the founder
considers, without necessarily being “the unavoidable heirs” that
the law indicates at the time of establishing a testament. On this point it
is clearly indicated that the hereditary norms in “a Foundation” of
Private Interest are not applicable.
In this way, the advantages of a foundation (created so that it is executed
at the time of death of the founder) in front of his will, are obvious:
1. Is not necessary to open a process so that the transference in favor of
the beneficiaries takes place .
2. Is not necessary the appointment of unavoidable "heirs".
13. What are they the objectives of a Panamanian Private
Interest Foundation?
The objectives are the following:
1. For Testamentary aims: a foundation of private
interest can be created to undergo effects to the death of the founder. Since
we have already explained, the use of this type of foundations can supplant
the testament, as far as the transference of goods. In this modality is common
to placed in the regulations “the
founder” as first beneficiary of the foundation, with all the rights
on the goods during all its life, in order that to their death, the goods in
favor are distributed or administrated (yielded previously to the foundation)
in favor of the beneficiaries.
2. For personal life rent: it creates a foundation with the same effects that
a plan of oldness or private pension.
3. For fiscal aims: this occurs with the simple crossing of the goods to foundation.
Different fiscal advantages exist from the creation of a foundation of private
interest.
4. For the protection and Administration of goods: it offers the possibility
that the goods yielded to the foundation “are not obstructed or kidnapped” by
personal obligations of the founder.
5. For charitable aims, beneficial and of general interest: at the time of
creating the legal documentation, it also grants the capacity to him of which
the Council administrates the goods yielded in favor of public aims of social
interest or beneficial organizations.
6. For qualification and Administration of capitals and titles: a Panamanian
Foundation of Private Interest can be structured with the purpose of catching
capital originated of diverse sources: Interests of fixed term, stock market
investment, dividends of actions in private companies, etc.
7. To be used like guarantee: this becomes through a mortgage for buildings,
or an article, for personal property.
8. For the insurances administration: this use is common for the trusts. Where
the foundation is beneficiary of an insurance agreed previously by the founder
with an insurance agency.
14. What is the Original Patrimony?
It is not but the sum of goods and rights that are yielded (by and founder
or third) to the foundation and are to their name.
15. Which are the steps to create a Private Interest Foundation?
We can summarize the passages for the creation of the Panamanian foundation
of Private Interest in the following:
1. Power signed by the Founder for the creation of the Foundation
2, Writing of the foundational act in simple document.
3, Transfer the foundational act in a Public scripture in the notary, with
the respective protocol
4, Registration of Public Scripture in the Public Registry.
16. How is produced the liquidation of the Original Patrimony?
It can occur several phenomena at the time of the fulfillment
of conditions and events in a foundation, and subsequent beginning
of the process of liquidation of the foundational patrimony. Distribution:
this is the traditional form to eliminate a foundation. Delivery
of the original patrimony to the beneficiaries is ordered, according
to arranges of the founder, to the time and in the form that he
indicates. Restitution: it can occur in case the legal documents
of the foundation order “to dissolve” the goods yielded
to the foundation to those who contributed it at first. This return
could perfectly include the fruits or gains that had produced
these goods during their stay into the hands of the foundation.
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