Individuals or corporate entities may create Private Interest Foundations (PIFs). This must involve an endowment of funds or assets by the founder or founders. However, it need not be paid up at the time the offshore private foundation is formed. The Off shore private foundation then becomes a corporate body by registering its Foundation Charter at the Public Registry.
Offshore Private Foundation Charter
The Foundation Charter must contain the foundation’s name, which must include the word foundation (in any language). It must include its domicile, which may be anywhere, but it is suggested this remain in Panama. The offshore private foundation must include its capitalization, expressed in any currency, which can’t be less than US$10,000 or the equivalent thereof. The names and addresses of the Foundation Council, who administer the estate, must be included. They can persons or corporations. The Foundation’s resident agent in Panama must be listed, and this must be a lawyer or law firm. The objectives and goals of the Foundation must be stated, and they must be possible, reasonable, moral and legal. Additionally it includes the manner in which beneficiaries are selected, who can modify the charter, the duration of the foundation, and what is to be done with its assets in the event of its dissolution.
Off Shore Private Foundation Letter of Wishes
The Letter of Wishes is written by the Founder or Protector and specifies exactly how the assets are to be distributed when a stipulated triggering event happens, such as the death or incapacity of the Protector. It should also describe how the foundation will be administered when a triggering event happens, including if the foundation will continue to exist. The foundation’s beneficiaries may also be listed in the Letter of Wishes. It is basically an informal document, which may be changed at any time by the author (Founder or Protector). It may be held privately or filed publicly. If you are interested in protecting your privacy, you would obviously hold it privately.
Offshore Private Foundations By-Laws/Regulations
Unless specified in the Charter, the Foundation doesn’t need By-Laws or Regulations at all. Such by-laws and regulations are generally stipulated in the Letter of Wishes, thus rendering by laws and regulations redundant. Even so, it may be useful to draft this more structured document.
Offshore Private Foundations Founder
The Founder is the person or entity who creates the Foundation in the Public Registry of Panama. Normally, it’s the law firm that establishes the Foundation. The Founder has no influence over the control of the Foundation.
Foundation Council
This is like a company’s board of directors. It must contain, at minimum, three individuals or one corporate body. It may be of any nationality and reside anywhere. These should be nominees, since the names and addresses are public.
Offshore Private Foundations Protector or Guardian
The foundation may have a supervisory entity, usually referred to as a “Protector.” This protector may remain secret. The protector’s powers include suggesting the manner in which beneficiaries are chosen, and full removal or replacement of the foundation council.
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