Homes Real Estate & Investment Services of Panama provides comprehensive offshore banking and offshore investment services to clientele through our in-house law firm; this is complementary with, but not exclusive to our real estate services.
Our team of corporate lawyers specializes in the Incorporation of Panama Bearer Share Corporations and Panama Private Interest Foundations .
Panama has long held a reputation as an offshore banking haven, largely because of the solid financial instruments it offers. For protecting assets (including real estate) and their owners, two of the best instruments available in Panama are the corporation and the foundation. Each offers secure and, if desired, anonymous ways of holding assets.
Our legal team can discuss with you in greater depth just how each instrument can be used, separately or in tandem, and how they can help you achieve your particular investment goals.
We can also offer you assistance with your business and personal banking needs, professional offshore investment advice and mail forwarding.
Offshore Legal Services Highlights:
Panama Offshore Bearer Share Corporations
Overview | Uses | Privacy | Facts | Tax Advantages | Our Services
Overview
Panama’s Corporation Law was created in 1927, and remains to date largely in its original, simple form. The Panamanian corporation is very flexible in its possible arrangements, fast, easy and cheap to set up, without complicated requirements --- which has led to the creation of nearly half a million corporations registered in Panama.
Corporations can be formed quite easily in Panama with a minimum of three directors required (including nominee directors, for added anonymity). Any natural person, of any nationality, residing in any country, can act as a director, as can juridical persons such as other corporations.
No minimum capital is needed to establish a corporation, and the ‘articles of incorporation’, or the company’s intended activities, can be as wide-ranging or as particular as you wish to make them.
Once registered, a Panama bearer share corporation can acquire and purchase property, open a bank account, take out loans and mortgages, make contracts, and carry out business inside and outside of Panama. Best of all, its offshore (outside Panama) earnings and activities are entirely tax-free.
Uses
Panama Bearer Share Corporations are used by businesses and individuals across the globe seeking asset protection, tax minimization, privacy, investment diversification, affordability and convenience.
They are used for international trade, to settle trusts or foundations, to establish and own bank or brokerage accounts, and to hold ownership of real estate or any other type of asset. Corporations can also be useful for real estate transactions; by transferring the shares of a corporation that owns only the real estate property of interest. Ownership of the property can be transferred without incurring some of the taxes involved in the sale of real estate.
In some cases, Panama corporations are formed in the interest of highly private and confidential business transactions such as the movement of funds to another jurisdiction for asset protection.
Privacy
Panama offers the strictest corporate book and banking secrecy laws available in the world, providing legal protection for your assets and identity. Most other offshore jurisdictions, such as the British-influenced countries, have bowed down to recent legislation that has begun the removal of bank secrecy in those British colonies around the globe. Panama, however, is a wholly sovereign nation; it is not governed or controlled by any other country.
Facts
Second Most Popular Jurisdiction in the World - Panama has registered 400,000 corporations & foundations, making it the second most popular jurisidiction for incoporation in the world after Hong Kong.
No Reporting Requirements or Taxes - Panama does not impose any reporting requirements or taxes for non-resident Panamanian corporations.
No Piercing the Corporate Veil - Panama does not allow "piercing the corporate veil", so your corporate books are maintained 100% private and confidential by law
Anonymous Ownership - Panama corporations share certificates can be issued in Nominative or Bearer form (Bearer shares are an anonymous form of ownership), with or without par value. Neither the directors nor the officers of Panama corporations need to be shareholders.
No Capital Requirements - Panama corporations do not require paid-in capital, nor is there a time limit in which authorized capital must be fully paid.
Directors - Every Panama corporation requires 3 directors/officers (President, Secretary and Treasurer). The directors/officers can be either individuals or entities. Panama corporations directors, officers and shareholders may be of any nationality and resident of any country. The director names and identifications must be presented in the public registry when the corporation is formed.
Nominee Directors - We offer our clients the optional service of using our "Nominee Directors" for their corporation(s). For purposes of confidentiality, most of our clients prefer that we provide nominee directors /officers to establish their corporations(s). In these cases we always provide our clients with pre-signed, undated letters of resignation from the directors so that our client can replace those directors at any time. There is no additional fee for the use of our nominee directors.
Annual Corporate Franchise Tax - Panama corporations and foundations should pay a low annual corporate franchise tax of $250 USD to remain in good standing. The deadline for tax payment depends on when the entity was formed.
- Formed Jan1 - June30 --> Tax is due 30th of June
- Formed July1 - Dec 31 --> Tax is due 31st of December
- late penalty is $50 USD. Entity is charged $250 USD for missing a second deadline.
Convenience - It is not necessary for the interested parties to be present in Panama for the purpose of establishing a corporation. We can handle everything on your behalf without you having to visit Panama.
Re-Domiciliation - Corporations from other jurisdictions may be "re-domiciled" to Panama and vice versa. Many people who have corporations in jurisdictions such as the Bahamas or other British territories are currently domiciling their corporations to more private and secure jurisdictions such as Panama.
Legal Address - When registering a new Panama corporation it must have a legal physical address that is included in the articles of incorporation. Our law firm provides a legal physical address as the Registered Agent.
Panama Corporate Tax Advantages
- No tax reporting requirements
- No income tax / capital gains tax / sales tax / capital stock tax / estate tax / stamp tax / inventory tax / property tax / gift tax / succession tax
- No tax to shareholders
- No interest on issuance of corporate shares
- No stock sale or transfer tax
Our Corporate Offshore Services
All incorporation of Panama Bearer Share Corporations by Homes will include the following:
- Original Articles of Incorporation (in Spanish)
- Official English Translation of Articles of Incorporation
- Resident Agent
- Registered Office
- Optional Nominee Directors
- Pre-signed, undated nominee director resignation letters
- Share certificates issued to "the Bearer", or to any person or entity that you designate (foundations do not have shares)
- First Minutes of the Board (whereby the subscibers renounce their legal rights to one share each)
Panama Private Interest Foundations
Overview | Uses | Our Services
Overview
The Panamanian private interest foundation is a very interesting entity, and arguably the best of its kind in the world. Functionally, it acts as a cross between a trust and a corporation; however, it is quite different from either of these. Rather than being the legal personification of a person or group of persons (as with a corporation), it is a legal entity that does not have owners (share-holders, participants or partners) and it traditionally has a specific purpose for the benefit of an individual or group.
While one might associate the idea of a foundation with humanitarian or scientific activities, for example, the Beneficiary of a Panamanian foundation can be a single person --- including the Founder him/herself.
In fact, it is the broad definition of a Beneficiary that makes the Panama private interest foundation such a useful tool. While it can not be profit-oriented, or engage in ‘habitual’ commercial activities, the Panama Private Interest Foundation can acquire and own assets of all kinds (including shares of a corporation, trusts, real estate and more), hold bank accounts, and take part in activities to further its own aims.
Setting up a foundation needs only $10,000 to start. Like a corporation, three council members are named in the foundation’s charter, but unlike a corporation, there are no shares and no owners. More assets and funds can later be transferred in, and invested (always to further the foundation’s aims).
What happens to those assets and their profits can be made absolutely private. In fact, the privacy of all the foundation’s activities and operations are explicitly protected by law, with severe penalties for any breaches. The identity of the Founder, too, can remain completely anonymous, if desired.
Importantly, the assets of the foundation are considered explicitly separate from those of the Founder, and can’t be seized or frozen to satisfy the founder’s personal obligations --- even if the founder is the beneficiary of that foundation.
Finally, the assets of the foundation can be disposed of as simply, or in as great detail, as you wish. It can act as an absolutely binding last will and testimony, immune from the typical disputes these undergo, and have any number of stipulations. This offers clear advantages for international estate planning with regards to privacy, anonymity and protection to the Protectors, Founders and Beneficiaries of the Foundation.
A Panama Private Interest Foundation comes into existence upon registration in the Public registry. No approval from any public authority is required (Law No.25 of Jun 12, 1995 regulates Panama Private Interest Foundations).
Uses of Panama Private Interest Foundations
Panama Private Interest Foundations may be established for the benefit of a person(s), family, or specific social purpose; in so doing, several advantages can emerge which make the Foundation useful far beyond its primary aim. The following are some of the more commonly-used advantages.
Foreign Corporation Rules - Quite often, Panama Private Interest Foundations are used by people who are subject to Foreign Corporation (CFC) rules in their home countries. Several heavily-taxed countries such as the US, Canada, UK, Australia , New Zealand, France, Italy and Spain, among others, have CFC rules which require that their citizens submit tax declarations to the appropriate authorities, in which they declare that they are the shareholders of foreign corporations.
By establishing a Private Interest Foundation in Panama that holds or owns the shares of their foreign corporation(s), rather than holding the corporations shares in their personal name or in bearer form, CFC reporting rules can be avoided. Using the foundation as shareholder for their corporation removes ownership from one's personal name, transferring ownership to a foreign entity with privately appointed, anonymous beneficiaries.
Asset Protection - A Foundation's assets cannot be frozen, sequestered or subject to embargos except where the Foundation itself is in contravention of the law. Given there is no owner of a Foundation's assets, these assets cannot be used to satisfy any personal claims against you. The only instance in which any portion of the Foundation's assets can be withheld are to satisfy contractual obligations held directly by the Foundation; for example, in the case of a breach of contract on a real estate purchase . Otherwise, assets transferred to the Foundation are safeguarded by law from all external claims.
Personal Compensation - Making use of your Foundation's assets can be quite simple. By appointing yourself to a consulting or management position within the Foundation, by means of a formal written agreement signed by Council members, you can stipulate your compensation, including living accomodations, health care, travel expenses, legal expenses, expense account and more. This ensures that you are able to enjoy the use of your assets, without subjecting them to taxation.
Banking - In many cases, when opening corporate bank accounts or investment accounts, financial institutions require you to reveal the beneficial owners of the corporation. Again, using the Foundation removes ownership from one's personal name to that of a foreign entity with privately appointed, anonymous beneficiaries, for greater privacy and confidentiality in your banking affairs.
Transferring Funds - The Panama Foundation can be useful in transferring funds offshore or receiving funds from offshore.
Family Donations - Some people donate their funds to their Panama Foundations and later use the Foundation to give educational or special grants to their children, grandchildren or anyone else they choose. Some governments impose "gift taxes" and exhaustive reporting requirements when making donations; in this case fiscal regulations surrounding donations are avoided as Panama has no such requirements.
Last Will and Testament - The Panama Foundation can also act as an absolutely binding last will and testament, free from the typical legal disputes that can plague an ordinary will. The Letter of Wishes can outline exactly how the assets are to be disposed of on the event of your death, and can be kept utterly confidential until that time.
The Greater Good - The Panama Foundation can also be used for the more traditional purposes of a foundation: whether scientific, educational, religious, humanitarian or philanthropic, its assets can be used to further goals and activities of your choosing.
Our Offshore Foundation Services
The following is a description of the various elements of a Panama Private Interest Foundation, and our related services:
Founder - the person or entity that establishes the Foundation in the Public registry of Panama . Our law firm is generally the Founder of each Foundation that we establish, since it is our law firm that goes to the public registry to incorporate the Foundation. The Founder has no influence with or control over the Foundation, and is recognized only as the individual who presented the Foundation articles in the public registry when the entity was originally registered.
Council - The Foundation's Council serves the same purpose as the board of directors on a corporation. The council members are each registered in the public registry with their names, addresses and identifications as council members to the Foundation.
Our firm generally appoints a "Nominee Foundation Council" to fill the council positions for additional privacy and confidentiality for our clients. When we appoint a nominee council we provide clients with pre-signed, undated letters of resignation from each nominee council member so that our client can replace the council at any time. The nominee council has no control over the Foundation or any of its assets.
Protector - The Protector is the person or entity who ultimately controls the Foundation and all assets held within it. The Protector is appointed by the Foundation Council when the Foundation is created, however, once the Protector is empowered, the Protector can then remove the council members at any time without external consent.
The Protector can be appointed privately, through a Private Protectorate Document, signed by the Foundation Council. Hence, the Protector can maintain this position free of public knowledge. We generally appoint our client as Protector of the Foundation through a notarized Private Protectorate Document so that our client maintains complete control over the Foundation in a private and anonymous manner.
Once the Protector is appointed, this position can be removed or reassigned in accordance with the Protector's wishes. A Protector is not required and if you prefer, you can choose to not use a Protector or to use a nominee Protector.
Beneficiaries - Unlike a corporation that issues share certificates to certify the owners' identity, the Panama Private Interest Foundation has only Beneficiaries, and hence no shares. The Foundation's Beneficiaries are appointed by the Protector through either a simple, privately written Letter of Wishes or through a more formal set of Foundation By-Laws (written with the assistance of a Panamanian Attorney).
The anonymity of Beneficiaries is maintained since the contents of the Letter of Wishes or By-Laws may remain private and need only be known to interested parties. Also, a Panama Foundation may be set up so that the Protector is the sole beneficiary until his or her death at which time the Foundation continues for the benefit of other Beneficiaries.
Letter of Wishes - The Letter of Wishes is a simple letter written by the Protector which specifies exactly how the Foundation's assets should be handled or distributed upon a triggering event (this can include, but is not limited to, the death or incapacity of the Protector). The Letter of Wishes should also state whether the Foundation should continue, whether a new Protector should be appointed, or if the Foundation should be dissolved upon the death of the Protector.
There is no specific format that the Letter of Wishes must be written in and it can be written or changed at any time after the Foundation is incorporated per the Protector's wishes. The Letter of Wishes can be held privately or can be registered publicly. Generally, most prefer to keep the Letter of Wishes private so the Beneficiaries and Protector also remain anonymous.
Foundation By-Laws - The Foundation does not need to have By-Laws since a Letter of Wishes is legally sufficient for expressing the Protector's requested testamentary instructions. However, if one wishes to have a more formal Foundation testamentary document written and signed by a Panamanian attorny and notarized by a Panamanian notary then one can enlist the help of a Panamanian attorney to draft the Foundation By-Laws.
The Foundation's By-Laws essentially handle the same function as the Letter of Wishes since the By-Laws should specify exactly how the Foundation's assets should be handled or distributed upon a triggering event. The By-Laws should also state whether the Foundation should continue existing or be dissolved upon a triggering event. There is a specific format for the By-Laws, however the contents can be changed at any time after the Foundation is incorporated per the Protector's wishes.
The By-Laws can be held privately or can be registered publically. Once again, most prefer to keep the Letter of Wishes private so the Beneficiaries and Protector also remain anonymous.
Please contact us for more information regarding our offshore banking & legal services in Panama. |
