PRIVATE INTEREST FOUNDATIONS:
The "Private Interest Foundation" was created in Panama by Law No.25 of 1995 (hereinafter "PIF"). Its structure is similar in some aspects to that of the corporation, but may not engage in business. The subscriber in the corporation is the founder in the PIF. The Board of Directors is the Management Council. The PIF requires a founder, who decides which assets are incorporated into the PIF. The founder may be a corporation or a person and its name appears in the Public Registry.
The members of the Management Council may be provided by the founder or as an exception, may be provided by our office as nominees. If the latter is the case, we would submit undated resignations for all of them.
The beneficiaries of the PIF are established in its By-Laws, which are not a matter of public record, but normally are notarized. The beneficiaries do not have control of the PIF and the Founder may change the By-Laws and beneficiaries at any time, and may withdraw any or all the assets from the foundation at any time if the PIF is revocable.
The PIF has the advantage that its assets are not subject to liens or attachment, unless it is due to debts of the foundation itself or within three years of the transfer of assets to the PIF, when creditors may prove the transfer was made fraudulently by the Founder to avoid paying its creditors.
It is important to mention that the purpose of the Private Interest Foundation is as its name states, private (for estate planning and asset protection), and although it is a non-for-profit entity this is not a charitable foundation, therefore this type of foundation cannot be used to collect funds from the public. Charitable foundations in Panama have to go through a more rigorous procedure to be established and must be authorized by the Ministry of Government and then filed in the Public Registry.
The PIF may have a Protector which is appointed by private document and may oversee and advise the Management Council on the management of the assets. Whenever we provide nominee Council members, the assets will be managed by the Founder or the Protector, since we do not offer the services of asset management.
There is no requirement to disclose the name of the beneficiaries, unless the PIF is found to be involved in criminal activities, such as: drug trafficking, terrorism, arms trafficking, trafficking in human beings, kidnapping, extortion, fraud and the laundering of money proceeds from these crimes; or if Panama has signed a Tax Treaty with the country of origin or residence of the beneficial owner and through official channels the government of Panama requires the information to be disclosed. In any of these cases, we are released from our confidentiality obligations and we shall cooperate fully with the authorities.
We request that a release form be signed by the founder or beneficial owner and that we are kept appraised of his/her address during such time as we remain Resident Agents for the PIF. Any change of beneficial owner must be disclosed to us and we reserve our right to resign as Resident Agents and Council members at any time, if this is not complied with.