Understanding a Panama Offshore Foundation and Panama’s Tax Haven Status

Posted by Moss Offshore on November 9th, 2020

A Panama Offshore Foundation is unique in nature as compared with the other typical foundations. Mainly the foundations are formed for non-profitable or charity purposes.

However, the Panama Offshore foundation is built with a distinct purpose. It is basically a unique family foundation. The main idea of establishing this foundation is to safeguard the family’s wealth for their generations to come.

Panama Offshore Company which is located in Panama is an exceptional creation with distinguishing features and priorities.  The people of Panama wanted to come up with an idea that can facilitate the families.

Therefore, they kept the research game strong and efficiently observed the laws established by other countries in this regard. Liechtenstein and Switzerland firstly came up with this law.

These countries established laws consenting the creation of private family foundation as an inheritance tool. Panama government, however, after observing these set laws came up with its own unique family private foundation law in 1995.

This law mainly named as Panama Law no.25, set grounds for the formation of private patrimony foundation for families.

Patrimony is a term referred to an inheritance from ancestry. Thus, the sole purpose of this law is to protect the family wealth for the next generation.

Due to this feature, a Offshore Company Panama is neither categorized as a company, corporation or any partnership. It is a separate legal domain distinctive in nature with no active business however, passive income is involved.

Panama Offshore foundation has neither corporate officers, directors and shares involved nor do they have partners, members or shareholders. Its only purpose is to serve an individual group.

The foundation is created by the statement of the founder and generally has an aim to reserve the possessions of the foundation for profit of the founder or beneficiaries. The founder and beneficiaries can either be the same person or different.

Benefits of Panama Foundation

The benefits for creating a panama Offshore foundation are as follow

1.        No Taxation

As Panama Foundation is not an active business company and involves passive incomes, therefore, there is no corporate taxes to be entertained.

2.        Protection of possessions

Panama Foundation acts as a protector for the assets. It acts as holding in nature, safeguarding the assets of the founder from any foreign agencies or creditors.

3.        Private in nature

The founder, beneficiaries and protectors involved in this type of setting doesn’t need to document their names anywhere therefore keeping their privacy. Only the council members names are included in the public documents.

4.        Full Control

The founder himself id the authority working entirely. He can make any move or process anything individually.

5.        No set amount of wealth

There is no set amount of wealth required to be deposited for the ongoing of the foundation.

6.        Easy to form

The foundation can be created and registered in an easy and feasible way. It can be registered just in a day.

7.        Income earned through passive means

As Panama foundation is not involved in any sort of active business. They earn their incomes from rent, interests, securities and fees.

8.        Meetings

There are no annual meetings arranged for the foundation, to check its progress. Anyhow, if a meeting is needed, it can be held anywhere either in person or even through fax.

Panama as Tax Haven

Tax Haven is someone who come up with policies that gives you a free hand in taxation. A tax Haven country is the one that provides with little or highly reduced tax charges.

Republic of Panama is considered as the most well-established tax haven across the world. It provides the dealers with an appropriate and friendly environment to do business.

Some of the factors making Panama a tax haven is as follow

• Panama tax construction and legal procedures are flexible
• No implementation of capital gains, estate taxes are done by Panama.
• Strict confidentiality laws served by Panama helps in the protecting of the privacy of account holders.
• No exchange of control laws
• Tax agreements with other countries are not made.

Richard Moss is the author of this article, For further detail about Company formation agents. Please visit the Website.