The Panama Foundation is a recognized legal entity under Panamanian Law and is particularly suited to realize family-related or philanthropic intentions. The Panama Foundation is an approved legal instrument for the protection and preservation of private wealth and family values in the long run.
Panama Foundations may not engage directly in any business activity that is commercial in its nature. The most common purposes are the following:
- As a holding instrument: to own financial interests in private and public companies, hold patents, trademarks and/or intellectual property, collect royalties and receive other forms of income.
- As an asset protection instrument: to hold assets (regardless of their nature) of individuals and legal entities for the purpose of providing protection against unjustified claims.
- As a financial instrument: to invest in various financial instruments such as stocks, bonds, time deposit accounts, investment funds, etc.
Other uses of the Panama Foundation may be, as a substitute for a will, an instrument for owing real estate or valuable artwork, a substitute for prenuptial agreements, to own family business, to guarantee payment of money to other family members for their maintenance and care, to make donations of philanthropic or humanitarian nature, etc.
Panama's foundation legislation is in force for more than 20 years now. Panama Foundations are governed by their by-laws and are subject to the provisions of Panama Law No. 25 of 12 June 1995 as well as any other applicable legal or regulatory provisions.