PANAMA FOUNDATION 1
Synopsis
The Republic of Panama occupies an area of 77,082 square kilometres and is situated between Costa Rica in Central America and Colombia in South America with coastlines on both the Pacific and Atlantic Oceans. Its capital, Panama City, is on the pacific coast at the entrance of the Panama Canal. The country has a population of approximately 2.8 million of which 1.2 million people live in Panama City.
The Constitution of Panama provides for a Republican form of Government. Citizens over the age of 18 years have the right and obligation to vote directly for a President and two Vice Presidents, and to vote for appointment of Legislators to the Legislative Assembly. For the purpose of the election of Legislators, the country is divided into Electoral Circuits with an average of 30,000 voters in each.
Panamanian law is based on the Spanish Civil Code, although the company law has been taken from the corporation law of Delaware in the USA.
The official language is Spanish. Documents in a foreign language, which require to be filed at Companies Registry must be accompanied by a Spanish translation. However certified English translations will be provided for all documents. Spanish and English are used equally in business circles.
Panama City is linked by major scheduled airlines, through regular daily flights, with the principal cities of North, Central and South America, Europe and the Far East. It has excellent telecommunications and postal facilities, and courier services are well established in the country.
The official currency is the Balboa, which, under a monetary agreement of 1904 with the United States, is at par with the United States dollar and is freely convertible. The US Dollar is also legal tender and as there is no Panamanian paper currency it circulates freely.
The Panamanian Foundation
A private foundation is a legal entity that comes into existence by a person, called the founder, filing the foundation charter at the Public Registry Office of Panama. Once registered, a private foundation acquires its own juridical status or personality, which is separate to the founder and its beneficiaries. It can own assets, contract obligations and be part of administrative or judicial processes.
A private foundation is governed by its foundation charter, its regulations and by the provision of Law No. 25 of June 1995.
The foundation has the following characteristics:
Initial Patrimony or Capital of The Foundation The foundation must have an initial patrimony (capital) of at least US$ 10,000, which shall be used only towards the purpose and objectives expressly provided for in the foundation charter.
The Founder The founder, who can be either a natural person or a body corporate, organises or creates the foundation. 2
The founder appoints the founding members of the foundation council and also the beneficiaries of the foundation. Typically, the founder will be a local Panamanian lawyer who will be named in the foundation charter.
The Foundation Council All private foundations must have a foundation council, which is the administrative body of the foundation. The foundation council is similar to the board of directors of a normal company. The foundation must consist of at least three individual members or a single incorporated body.
The Beneficiaries The beneficiaries, are those that benefit from the private foundation. The manner in which they are designated is dictated by the charter but details of the beneficiaries’ identity is usually only revealed in the regulations of the foundation. The regulations do not have to be registered on public file so the confidentiality or anonymity of the beneficiaries is maintained.
Taxation Taxation in Panama is strictly territorial, and provided the activities of the foundation are carried out outside of Panama no tax will be levied, other than a US $300 annual franchise tax which is payable to maintain the good standing of the foundation.
Timescale A Foundation can be registered within five working days but in order to arrange certified English translations, you should allow 14/21 days for us to receive the paperwork from Panama.
Restrictions on Name and Activity Foundations can be established for all lawful objects and the name should terminate with the word “Foundation”. Words such as Bank, Insurance, Reinsurance or Trust cannot be used in any language.
Annual Reporting There is no requirement under Panamanian Law for a registered office to be maintained in Panama, but the Foundation must maintain a Resident Agent who must be a Panamanian lawyer or a firm of Panamanian lawyers. 3
Schedule of Fee
Fee for incorporation US$ 1,750.00
Annually Provision of domiciliary service to include provision of registered office and local resident representative US$ 2,000.00
Provision of The Foundation Council US$ 2,000.00
Government Franchise Tax US$ 300.00
TOTAL FIRST YEARS FEES US$ 6,050.00
SECOND AND SUBSEQUENT YEARS FEES US$ 4,300.00
The above fees are calculated on the basis of a foundation having a capital of US $10,000.
OPTIONAL SERVICES
Bank Accounts We can assist with the opening of bank accounts for the company in most places in the world and our fees for attending to the account opening procedures would be from US$1000 plus the costs of preparing any additional notarised documentation which a particular bank may require.
Remailing, Fax, Tel. and Office Facilities As part of the domiciliary services package we provide a registered office address in the jurisdiction of the incorporation of your company in order to meet the local statutory requirement. An additional service is the provision of an address, telephone and fax number to receive correspondence which can be the same as the registered office address or another of our Group office addreseses. When we receive communications we will deal with them according to your wishes. Fees for the provision of this service are included above plus handling charges (US$3 per item plus disbursements). If you require this service please tick box 7A of the application form.
Dedicated Telephone Lines For those companies which are particularly active or wish to have a higher profile or more substance we can arrange the immediate allocation of a dedicated telephone line answered with the name of your company. Additional costs apply to this service.
DISCLAIMER © The Sovereign Group 2013 Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.