Foundation PIF Laws

Offshore Private Foundations (PIF) in Panama are regulated by Law 25 of June 12, 1995. This law provides the details of how one can form an offshore private foundation, what protections they receive, and what they must do to stay within the law. Most organizations find that Panama offers them a useful way to protect their assets without jumping through the hoops of excess bureaucracy.

Forming an Offshore Private Foundation in Panama

Private Interest Foundations, another name for offshore private foundations, require people to fill four roles:

• Founder

• Council

• Protector

• Beneficiary

The founder of a PIF can be an individual or an organization whose name gets entered in the Public Registry of Panama. Although the founder's name gets registered, he has no influence on how the PIF is directed.

A PIF's council fills the same role that a board of directors fulfills in a corporation. The names of people and organizations on the council also get listed as public information.

The protector of a PIF in Panama does not have to reveal his or her name in the public registry. This person has control over the foundation and its assets. He or she can also remove council members.

A PIF does not have owners. It doesn't issue stocks or any other kind of certificate of ownership. Instead, it has beneficiaries. Beneficiaries can remain anonymous. The protector can also establish himself as a beneficiary. At the time of his death, the PIF's assets and benefits transfer to other beneficiaries.

Naming a PIF's Beneficiaries

In a PIF, the protector names beneficiaries in a Letter of Wishes. The Letter of Wishes details exactly how beneficiaries receive their benefits and how the organization handles its assets.

The protector can also establish beneficiaries through Foundation By-Laws. By-laws, however, are not necessary for PIF formation.