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Offshore Founation Registration. Establish Offshore Panamanian Foundation

Welcome to Coddan online Panama Private Foundation registration agent. If you have read this far, it means that you are now convinced that a Panama Foundation is for you, and you are ready to incorporate. Now it is just a matter of clicking on "Order Now" and completing an online order form. Read the simple procedures below to establish a Panama Foundation. We recommend reviewing this site in its entirety, so that you are knowledgeable of Panama jurisdiction and the powers granted to Panamanian foundations. We will guide you through the process of registering your foundation and establishing your registered identity. Complete and submit a Offshore Foundation application form. Adequate completion and submission of this form, along with the provision of payment, will enable Coddan to incorporate your proposed foundation within three business days. We will express mail your corporate documents to the mailing address you specify in your incorporation order. If you want to become familiar with the description and the contents of Panamanian Foundation registration packages, offered by Coddan and to find above, what kind of service is included in this or that foundations incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the Panamanian Private Foundation incorporation within foreign countries, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.

In general, Panama Private Interest Foundations are used by people who wish to control and maintain ownership of foreign corporations, however, they do not wish to own their corporations themselves directly, due to the Controlled Foreign Corporation (CFC) rules in their home countries. Several highly taxed countries such as the UK, Canada, USA, Australia, New Zealand, France, Italy, Spain, etc. have CFC rules which require that their citizens submit declarations (reports) to the appropriate tax authorities, in which they declare that they are the shareholders of such foreign corporations.

Instead of holding the corporations' shares in their personal name or in bearer form, they establish a Private Interest Foundation in Panama that holds or owns the shares of their foreign corporation(s), thus avoiding the CFC reporting rules. Hence, the advantage of using the Foundation as a shareholder for their corporation is to remove ownership from one's personal name (or through a Bearer Share arrangement), and transfer ownership to the name of a foreign entity which does not have owners, rather has privately appointed beneficiaries, which are anonymous. In this way, there is no question as to who owns the company, since the company's shares are issued to the Foundations' name.

Panama is a 100% "tax haven". Panama Foundations offer the following tax advantages:

  • No tax reporting requirements.
  • No income tax.
  • No capital gains tax.
  • No interest income tax.
  • No sales tax.
  • No tax to beneficiaries.
  • No beneficiary transfer tax.
  • No capital tax.
  • No property tax (for non-Panamanian property).
  • No estate tax.
  • No gift tax.
  • No inheritance tax.
  • No stamp tax.
  • No succession tax.
  • No inventory tax.

Please note

The prices payable for the items that you order are clearly set out in the web site. There will be no contract of any kind between you and us unless and until we receive payment from you. We act as your agent in the incorporation of offshore companies. We are not able to guarantee that any such filing will be acceptable to Companies Registrar , nor are there any contractual obligation upon us to do so. If Companies Registrar rejects incorporation or other filing, we will credit your account with a full refund and the contract between us will be made void. Companies Registrar does not offer a cancellation facility for the incorporation of companies or the filing of documents. We will be unable to cancel any such submission on your behalf and will not refund any payment you have made. All prices shown at Coddan Web Site are in Great British pounds. Credit cards are the preferred method of payment; we accept VISA, MasterCard and Delta. We can accept payment in UK Pounds Sterling, US Dollars, Euros, Australian Dollars and Canadian Dollars.

Live Help

Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have any questions please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.

Concept - Main Uses

For those readers who are not familiar with the concept of a foundation, it consists in the endowment of a patrimony for a specific purpose (object) determined in the document whereby the foundation is created and internally organized known as the FOUNDATION CHARTER. An appointed body known as the FOUNDATION COUNCIL is entrusted to pursuit the objects of the Foundation. The person(s) who creates the endowment is known as the FOUNDER and the persons who benefit from the endowment (traditionally the founder and/or members of his family) are known as the BENEFICIARIES.

Once the Foundation Charter is registered in the Public Registry, the property endowed or to be endowed becomes an estate separate and apart from that of the founder by acquiring a juridical personality of its own, thus becoming a private foundation.

The information about names and rights of the beneficiaries of the foundation is usually provided to the Foundation Council by means of a private and confidential document (that is to say a document which does not need to be registered in the Public Registry) known as "THE REGULATIONS".

Contrary to the traditional corporation, the private foundation does not have shares, it does not recognize shareholders and the founder does not acquire any such rights in relation to the foundation's property. The Law does recognize, however, the beneficiaries or the persons in whose benefit the foundation is created, which can include the founder.

The possible uses of a private foundation are so broad that we can safely ascertain that practically all of the objectives which can be achieved by the widely used "trusts" can also be accomplished by properly structuring a private foundation.

Private foundations are mostly utilized as the ultimate holder of a given patrimony administered by professionals for the benefit of the founder and/or other appointed beneficiaries, allowing the founder, at the same time, to plan in advance (in the Regulations) for the transfer of the benefit or the orderly succession of such patrimony in case of his sudden demise.

Purpose Or Object Of The Foundation

It is important to explain that, as in Liechtenstein, a Panamanian Private foundation, as stipulated in Article 3 of the law, cannot be simply profit oriented or be used to carry on a particular business.

Although the private foundation shall be used more as a holding company, it can sporadically perform certain acts of commerce when such acts are convenient or advantageous to the foundation and only if the proceeds of such acts are dedicated exclusively to the non-commercial purpose or objectives of the foundation.

Therefore, the purpose of a private foundation shall be along the following lines: To contribute to the costs of upbringing, education, aid, as well as general maintenance or other similar aims of one or more members of one or several families as established in the Regulations. In addition to the members of one or several families, the foundation may benefit other natural or juridical persons including institutions of any kind and it may take the necessary provisions for the orderly disposition or succession of its patrimony. To achieve its object the foundation is authorized to preserve, administer, and invest in an appropriate manner the foundation's assets, being these assets of any kind, particularly of real estate and participations in other entities, and to conclude all businesses and legal transactions serving the pursuit and the realization of such objects.

Foundation Documents

Two main documents constitute a foundation: the Foundation Charter and its Regulations or by-laws.

Tax Advantages

Panama, like many other international tax havens, only taxes income produced or generated by economic activities carried out within the country, and even inside the country there are certain incomes which are tax free (e.g., the interests generated by moneys deposited in banks in Panama). Consequently, someone who utilizes a Panamanian Private Foundation outside of Panama will not have to worry about taxes within the country of Panama, with the exception of the annual franchise tax mentioned in the preceding paragraph.


Article 36 of the Law makes it clear by statutory disposition that any controversy arising in connection with the foundation may be resolved by arbitration, thus avoiding the need to litigate through the Judicial System of Panama. The arbitration may take place in any location and may be subject to any procedure established by the founder or any other authorized body of the foundation.

Protector - Supervisory Bodies

The founder may also establish other special arrangements in order to retain control or supervision over the foundation assets during his or her lifetime. The founder may appoint protectors, auditors or other supervisory entities to supervise the acts of the Foundation Council prior to or after his/her death, since article 25 of the Law expressly authorizes the creation of such additional entities or supervisory bodies.

The figure of the protector has been widely used in Common Law jurisdictions when settling a trust. This is yet another innovation of the Panamanian Law which further ensures the safety of the instrument and, thus, makes it even more attractive as an estate-planning instrument.

Forced Heirship Provisions

Following a recent trend adopted in the trust legislation of some Common Law jurisdictions like BVI, Belize, Grand Cayman, The Bahamas, as well as Jersey and Guernsey, Panama's Private Foundation Law (Article 14) specifically provides that forced heirship laws of another country shall not affect the foundation or its validity and shall not prevent the attainment of its purpose as provided in the Foundation Charter or its Regulations.

Moreover, inasmuch as the foundation assets will not be part of the founder's testamentary estate -having become legally autonomous - the legal norms of his/her personal law cannot restrict or limit in any way the structuring of the rights of the beneficiaries of the foundation.

Private Foundations Formation Requirements

One or more natural or juridical persons by themselves or through third parties, may create a private foundation in accordance with the provisions set forth in Private Foundation Law. For such purposes, the endowment of a patrimony exclusively dedicated to the objectives or purposes expressly stipulated in the foundation charter is required. The initial patrimony may be increased by the creator of the foundation, hereinafter called the founder, or by any other person.

Private foundations shall be governed by the foundation charter and its regulations, as well as by the provisions of Private Foundation Law and other legal or regulatory provisions that may be applicable. The provisions of Title II of Book I of the Civil Code shall not apply to these foundations.

Private foundations shall not be for profit. However, they may carry out mercantile activities in a non-habitual manner or exercise the rights deriving from titles representing the capital of mercantile corporations that make up the patrimony of the foundation, provided that the economic results or proceeds of such activities be dedicated exclusively for the purposes of the Foundation.

Private foundations may be constituted to become effective at the time of constitution or after the death of its founder, by anyone of the following methods: through a private document, executed by the founder, whose signature must be authenticated by a notary public at the place of constitution. Directly before a notary public at the place of constitution. Whichever may be the method of constitution, it must comply with the formalities established in the present Law, for the creation of foundations.

In case of a foundation being created either by public or private document, to have effect after the death of the founder, the formalities stipulated for the execution of testaments shall not apply.

The Foundation Charter Shall Contain:

The name of the foundation, expressed in any language with characters of the Latin alphabet, which shall not be equal or similar to that of a foundation previously existing in the Republic of Panama, 80 as to avoid confusion. The name must include the word "foundation" to distinguish it from other natural or juridical persons of a different nature.

The initial patrimony of the foundation, expressed in any currency of legal tender that in no case shall be less to a sum equivalent ten thousand U.S. Dollars. A complete and clear designation, of the member or members of the Foundation Council, to which the founder may belong, including their addresses. The domicile of the foundation. The name and address of the Resident Agent of the foundation in the Republic of Panama, which shall be an attorney or a law firm, who must countersign the foundation charter prior to its registration at the Public Registry. The purposes of the foundation. The manner in which the beneficiaries of the foundation shall be designated, among which the founder may be included. The reservation of the right to amend the foundation charter whenever deemed convenient. The duration of the foundation. The destination to be given to the assets of the foundation and the method of liquidation of its patrimony in case of dissolution. Any other lawful clause that the founder may deem convenient.

The foundation charter, as well as any amendment thereto must be written in any language with characters of the Latin alphabet, and must comply with the regulations for the registration of acts and titles in the Public Registry; for which purpose it must be previously protocolized by a notary public of the Republic of Panama. If the foundation charter or its amendments are not written in the Spanish language, they must be protocolized together with their (Spanish) translation by an authorized public translator of the Republic of Panama.

Any amendment to the foundation charter, when permitted, shall be carried out and executed in accordance with what is established therein. The respective agreement, resolution or act of amendment shall contain the date on which it was carried out and the name, clearly identifiable, of the person or persons subscribing it and their signatures which shall be authenticated by a notary public of the place where the document is executed. Every private foundation must pay a registration fee and an annual maintenance tax equivalent to those established for corporations in Articles 318 and 318A of the Fiscal Code. The procedure and method of payment, the surcharge for late payment, the consequences for lack of payment and all other complementary provisions of the aforementioned legal principles shall be applied to private foundations.

The registration at the Public Registry of the foundation charter shall bestow upon the foundation juridical personality without the need for any other legal or administrative authorization. Besides, the registration at the Public Registry constitutes a means of publicity before third parties. Consequently, the foundation may acquire and own assets of any kind, incur obligations and be a party to any type of administrative and judicial proceedings in accordance with applicable legal provisions.

Once the foundation has obtained its juridical personality, the founder or third parties that have pledged to contribute assets to the foundation, on their own or at the request of any person with interest in the foundation, shall formalize the transfer to the foundation of the assets so pledged. When the foundation is constituted to be effective upon the demise of the founder, it shall be deemed to have existed prior to such death, in respect to the donations that he (she) may have made to the foundation.

For all legal purposes, the assets of the foundation shall constitute a separate patrimony from the personal assets of the founder. Therefore they cannot be sequestered, embargoed or subject to any precautionary action or measure, except for obligations incurred, or for damages caused by virtue of fulfilling the purposes and objectives of the foundation, on behalf of the legitimate rights of its beneficiaries. In no case shall the assets respond for personal obligations of the founder or of the beneficiaries.

Foundations shall be irrevocable, except in the following cases: when the foundation charter has not been registered at the Public Registry; when the opposite is expressly established in the foundation charter. For any of the causes of revocation of donations.

The transfers (of assets) made to foundations shall be irrevocable by whoever has made the transfer, unless the opposite is expressly established in the act of transfer. In addition to the provisions of the previous article, when the foundation has been created to be effective after the demise of the founder, the latter shall have the exclusive and unlimited right to revoke it. The heirs of the founder shall not have the right to revoke the creation or the transfers, even if the foundation has not been registered in the Public Registry prior to the demise of the founder. The existence of legal provisions in inheritance matters in the domicile of the founder or of its beneficiaries, shall not be opposable to the foundation, nor shall it affect its validity, or prevent the fulfilment of its objectives as provided for in the foundation charter or its regulations.

The creditors of the founder or of a third party shall have the right to dispute the contributions or transfer of assets in favour of a foundation, when the transfer constitutes an act of fraud to the creditors. The rights and actions of such creditors shall prescribe three (3) years from the date of the contribution or transfer of the assets to the foundation. The patrimony of the foundation may originate from any lawful business and may consist of present or future assets of any nature. Periodic sums of money or other assets may also be incorporated to the patrimony by the founder or by third parties. The transfer of assets to the patrimony of the foundation may be effected by public or private document. Nevertheless, in the case of real estate, the transfer must conform with the rules for the transfer of real estate.

The foundation should have Foundation Council, whose duties or responsibilities shall be established in the foundation charter or in its regulations. Unless it be a juridical person, the number of members of the Foundation Council hall not be less than three (3).

The Foundation Council shall be in charge of carrying out the purposes or objectives of the Foundation. Unless otherwise stated in the foundation charter or its regulations, the Foundation Council shall have the following general obligations and duties: To administer the assets of the foundation, in accordance with the foundation charter or its regulations. Enter into acts, contracts or lawful businesses that may be suitable or necessary to fulfil the object of the foundation, and to include in such contracts, agreements and other instruments or obligations, such clauses and conditions as are necessary and convenient, which conform to the purposes of the foundation and are not contrary to the law, to morals, to bonus mores or to public order. To inform the beneficiaries of the foundation of the patrimonial situation of the latter, as established in the foundation charter or its regulations. To deliver to the beneficiaries of the foundation the assets or resources set up in their favour by the foundation charter or its regulations. To carry out all such acts or contracts which are permitted to the foundation by the present Law and other applicable legal or regulatory provisions.

The foundation charter or its regulations may provide that the members of the Foundation Council may only exercise their powers by obtaining previous authorization of a protector, a committee or any other supervisory body, appointed by the founder or by the majority of the founders. The members of the Foundation Council shall not held liable for the 1088 or deterioration of the assets of the foundation, nor for any damages or prejudice caused, when said authorization has been duly obtained.

Unless otherwise provided for in the foundation charter or its regulations, the Foundation Council must render an accounting of its activities to the beneficiaries and, when applicable, to the supervisory body. If the foundation charter or its regulations stipulate nothing in this regards, the rendering of accounts must be done annually. If the accounts 90 rendered are not objected within the term established in the foundation charter or its regulations, in lack of it, it shall be deemed as having been approved within ninety (90) days from the day it was received, for which purpose, record of this term shall be made in the report rendering the accounts.

Such period having lapsed or the account approved, the members of the Foundation Council shall be exempted from liability for their administration, unless they had failed to act with the diligence of a bonus paterfamilias. Such approval does not exonerate them before the beneficiaries or third parties having an interest in the foundation, for damages caused due to gross negligence or fraud in the administration of the foundation. In the foundation charter the founder may reserve for himself/herself or for other persons, the right to remove the members of the foundation Council, as well as to appoint or add new members.

When the foundation charter or its regulations do not establish anything in respect to the right to and the causes for removal of the members of the Foundation Council, these may be judicially removed, through summary proceedings, for the following causes: when their interests are incompatible with the interests of the beneficiaries or the founder. If the administration of the assets of the foundation lacked the diligence of a bonus paterfamilias. If they are convicted for a crime against private property or public faith. In this case, while the criminal proceedings are in progress, the temporary suspension of the member on trial may be decreed. For incapacity or impossibility to carry out the objectives of the foundation, from the time such causes may arise. For insolvency or bankruptcy proceedings.

The founder and beneficiary or beneficiaries may request the judicial removal of the members of the Foundation Council. Should the beneficiaries be disabled or under age they may be represented by whoever exercise upon them the "patria potestas" or guardianship, as the case may be. The judgement of the court decreeing the removal, shall appoint new members in replacement of the previous ones, who shall be persons with sufficient capacity, competence and good moral standing to administer the assets of the foundation, in accordance with the purposes established by the founder.

The foundation charter or its regulations may provide for the constitution of supervisory bodies, that may be constituted by natural or juridical persons, such as auditors, protectors of the foundation or others. The duties of the supervisory bodies shall be established in the foundation charter or its regulations and may include, among others, the following: to ensure the fulfilment of the purposes of the foundation by the Foundation Council and (to protect) the rights and interests of the beneficiaries; to demand from the Foundation Council, the rendering of accounts; to modify the purposes and objectives of the foundation, if and when they become too costly or impossible to fulfil. To appoint new members of the Foundation Council due to temporary or permanent absence or for expiration of the period of anyone of them. To appoint new members of the Foundation Council in cases of temporary or accidental absence of anyone of them. To increase the number of members of the Foundation Council. To approve the acts adopted by the Foundation Council, as indicated in the foundation charter or its regulations. To guard the assets of the foundation and observe their application to the uses or purposes stated in the foundation charter. To exclude beneficiaries of the foundation and to add others in accordance with the provisions of the foundation charter or its regulations.

The Foundation Shall Be Dissolved Due To:

Reaching the day in which the foundation must terminate, in accordance with the foundation charter. The fulfilment of the purposes for which it was constituted or if their fulfilment becomes impossible. Being in a state of insolvency, cessation of payments or due to bankruptcy proceedings having been declared judicially. The loss or total extinction of the assets of the foundation. Its revocation. Any other cause established in the foundation charter or in the present Law.

Every beneficiary of the foundation may contest any acts of the foundation that may damage the rights conferred upon him/her, denouncing such circumstance to the protector or to other supervisory bodies, if any; or lacking them, directly promoting the respective judicial claim, before a competent court of the domicile of the foundation.

The acts of constitution, amendment or extinction of the foundation, as well as the acts of transfer, transmittal or encumbrance of the assets of the foundation and the income derived from such assets or any other act in connection therewith, shall be exempt from all taxes, contributions, duties, liens or assessments of any kind or denomination, provided that such assets are: assets located abroad. Money deposited by natural or juridical persons whose income is not derived from Panamanian sources nor taxable in Panama for any reason whatsoever. Shares or securities of any kind, issued by corporations which income is not derived from Panamanian sources or when such income is not taxable for any reason whatsoever, even when such shares or securities be deposited in the Republic of Panama.

The acts of transfer of real estate, titles, certificates of deposit, securities, money or shares, carried out in fulfilment of the purposes or objectives, or for the extinction of the foundation, in favour of relatives within the first grade of consanguinity and of the spouse of the founder, shall also be exempted from all taxes. Foundations referred to in the previous article that opt to become subject to the provisions of Private Foundation Law, shall present a Certificate of Continuation, issued by such bodies as their internal regime may call for, and which shall contain: The name of the foundation and the date of its constitution. Data about its registration or deposit (of the charter) at its country of origin. An express declaration of its desire to continue its legal existence as a Panamanian foundation. Requirements stipulated under Article 5 of Private Foundation Law, for the constitution of private foundations.

The certification containing the resolution of continuation and other requirements mentioned in the preceding paragraph must have the following documents attached there to: copy of the original act of constitution of the foundation expressing its desire to continue in Panama, along with any subsequent amendment; a power of attorney granted to a Panamanian attorney to carry out the necessary proceedings to make effective the continuation of the foundation in Panama.

The certificate of continuation, as well as the documents attached thereto referred to in Private Foundation Law, shall be duly protocolized and registered at the Public Registry so that the foundation may continue its legal existence as a private foundation in the Republic of Panama.

The responsibilities, duties and rights of the foundation acquired prior to the change or domicile or legislation, shall continue in force, as well as the proceedings already initiated against it or those that the foundation may have promoted, without being affected such rights and obligations due to the change authorized by the aforesaid legal provisions.

The foundations constituted in accordance with Private Foundation Law, as well as the assets comprising its patrimony, may be transferred or become subject to the laws and jurisdiction of another country, as may be provided by the foundation charter or its regulations. Registrations related to private foundations shall be effected at the Public Registry in a special section that shall be named "Section of Private Foundations" The Executive Branch through the Ministry of Government and Justice shall issue the regulations applicable to such section.

The members of the Foundation Council, of the supervisory bodies, if any, as well as the public or private employees who might have any knowledge of the activities, transactions or operations of the foundations shall at all times maintain secrecy and confidentiality in this respect. Infringement of this shall be penalized with six (6) months imprisonment and a $50,000.00 fine without prejudice of the corresponding civil liability. The provisions of this article shall apply without prejudice of the information which must be disclosed to the official authorities and of the inspections that they must carry out in the manner established by the law.

Any controversy, for which there is no special procedure in Private Foundation Law, shall be resolved through summary proceedings. The foundation charter or the regulations of the foundation may establish that any controversy arising in respect to the foundation shall be resolved by arbiters or arbitrators, as well as establish the procedure they should abide by. In the event that such procedure is not established, the rules in respect to such matters, as contained in the Judicial Code, shall apply.