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 a better estate planning tool, especially if you are not doing business. The assets that you put into the Foundation become the Foundation’s assets.

You must be extra careful when creating a Foundation. The idea is that you become the founder and not another person. If your lawyer becomes the founder, you should have an honest and truthful relationship with your lawyer.

The Foundation has a founder and a 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 are private. You can stay in the foundation regulations:

• The foundation's beneficiaries,
• The founders and the council's duties and powers,
• The regulations about the foundation assets 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 profits from the Foundation’s or Foundation’s assets when they finish college.

On the other hand, the corporations might have nominative shares or bearer shares.

• If you choose bearer shares, you must use an Authorized Custodian, who has the instructions regarding the beneficiaries of your shares after the shareholder’s death.
• If the shares are nominative, the shareholder´s heirs must go to court to acquire the shares.

The inheritance process in Panama could take a year or more and be costly. If you have assets, the court and your heirs must designate experts to assess your properties, shares, and others. Besides, you must pay a lawyer’s fee and the process expense.

At KeryCruz, we can help you choose the best estate planning tool. Please email us at lill@kerycruz.com