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April 26, 2021
Panama Corporation vs Panama Foundation
Panamanian Corporation vs. Panamanian Interest Foundation
Panamanian Foundation is a hybrid between a US trust and a Corporation. Corporations are good for doing business, and Foundations are better estate planning tools, especially if you are not doing business with the Foundation. However, you have to be extra careful when creating a Foundation. The ideal is that you become the founder and not another person. If your lawyer becomes the founder, it is advisable that you have an honest and truthful relationship with your lawyer.
The Foundation structure is fundamental. For instance: there is the founder and the council member. The founder can become a member of the council. The Foundation can also have an accountant and a lawyer as advisors. This information is established in the Foundation charter and regulations. The regulations do not need to be published in the Public Registry. You can stay in a) the foundation regulations:- the foundation's beneficiaries,
- the founders, and the council's duties’ and powers,
- What to do with the foundation assets as per the founder’s instructions. This is a valuable part of a foundation regarding estate planning. For instance, the beneficiaries can be the founder and the founder’s family. You can establish that your children will receive the fruits from the Foundation’s assets or the foundation assets just if they finish college. Be aware that the assets that you put into the Foundation become the Foundation’s assets.
On the other hand, if you have a corporation and do not have bearer shares, which you left with a registered custodian, who has the instructions regarding the beneficiaries of your shares after your death, then your heirs must go to court to acquire your shares.
The inheritance process in Panama could take a year or more and is costly. For instance, if you have assets, the court and your heirs will designate experts to assess your assets (properties, shares, others). Besides, you must pay a lawyer’s fee and the processing expense.
At Kery Cruz, we can assist you in choosing the best estate planning tool. Email us at lill@kerycruz.com