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Corporate Service Other Jurisdictions Panama Private Foundations - Frequently Asked Questions (Part 2)
FAQPanama Private Foundations - Frequently Asked Questions (Part 2)
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Who are you and where are you located? |
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We are corporate services provider and certified public accountant firm registered in Hong Kong and we specialize in establishing corporations and foundations in all major offshore jurisdictions. Our Panama corporation and private foundation registration services are provided in association with our associated law firm which is registered agents in the Panama Public Registry. |
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How can I trust your service, can you provide references? |
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We are a reputable provider in the offshore industry. Unfortunately, due to the confidential nature of our business, we cannot provide our clients as references before we obtain our clients’ prior consent. |
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Do I need to come to Panama to finalize anything? |
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No, you do not need to come to Panama. Everything can be done through email and courier. |
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What if I want a shelf entity? |
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No problem. When you complete the order form, just indicate that you want a shelf entity instead of a new entity. If you need immediate delivery, then request a shelf entity. |
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Do you recommend a new corporation (or foundation), or should I use a shelf entity? |
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That depends on your needs. If you want to use a specific name then you need to set up a new entity. If you need instant delivery and you can accept any company name, then we recommend a shelf entity. |
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Can I see a list of the shelf entities available and choose from them? |
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Yes, we can send you a list of shelf entities to choose from. Just contact our sales staff and request the shelf list. |
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What is the difference between a corporation, foundation or trust? |
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For banking purposes, there is very little difference. All entities come with everything you need to open bank or brokerage accounts. Generally, corporations are used for profit ventures involving business activity such as securities trading, banking, international trade, ownership of assets etc. Most of our clients establish corporations. Foundations are generally used for non-profit activities such as charities, receiving or giving donations, grants, etc., but can also be used for holding purposes such as holding ownership of corporations or any other type of asset. Most of our clients use Foundations to hold ownership of their corporations for additional confidentiality and asset protection. Trusts are generally used for holding purposes such as owning corporations or holding assets such as real estate. Very few of our clients establish trusts due to the extensive offshore trust reporting rules that exist in many of our clients’ home countries around the world (USA, Canada, UK, Australia, New Zealand, etc.). As a result of the declining popularity of offshore trusts, we have refrained from selling or recommending offshore Trusts at this time. However, these are simply general guidelines for what each type of entity was initially created for and these guidelines do not have to be strictly adhered to as there is no authority in Panama that enforces the uses of each type of entity. |
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Can I use my entity (Corporation or Foundation) to hold ownership of real estate property in my home country? |
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That depends on the country you are located in and the real estate ownership rules in that country. Some countries have extensive reporting requirements, additional property taxes, and all kinds of red tape to go through when titling real estate in the name of a foreign entity. For example, we do not recommend that you use Panama corporations, foundations, or trusts to hold ownership of real estate in the USA due to the extensive reporting requirements, additional property taxes, etc. imposed under the FIRPTA (Foreign Investment in Real Property Tax Act). If you are interested in asset protection for domestic real estate, then we generally recommend that you title the real estate in the name of a domestic entity (such as a domestic corporation, LLC, or trust) and then have the domestic entity owned by an offshore entity, such as an offshore corporation or foundation. |
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Is there any requirement to file Panama tax returns, keep books for the corporation, have an accountant, etc.? |
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No! Most people go offshore to eliminate extensive reporting requirements! There are no requirements to file Panama tax returns, keep books for the corporation, or have an accountant, etc. However, you should obtain professional guidance from your domestic attorney or accountant regarding income tax reporting requirements of your country of residence. It is YOUR responsibility and decision to report or not to report to the tax authorities in your country that you do business offshore. We do not provide any information regarding our clients’ structures to any government authority in any country. Under the Corporate Book Secrecy laws, it is a crime to release any information about our clients’ corporations in Panama. The act of "Piercing the Corporate Veil" is not permitted in Panama. |
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Are there annual renewal fees for the corporation or foundation? |
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Yes, the first year’s fee is included in the purchase price. On each anniversary date of the corporation, beginning in year number two, we will invoice you for this fee. If you choose not to extend the life of your entity, you simply do not pay the annual fee. In this case, your corporation will be removed from the public registry, and the corporate name will be made available again for new formations. |
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What are nominee directors/council member? |
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Nominee directors (or nominee council members) are directors that our associated law firm appoints for you. Each corporation or foundation must have 3 directors/council members appointed when the entity is registered in the public registry of Panama. The director’s names and passport numbers are on the public deed of the corporation (or foundation) and this information is publicly available. In many cases, our clients prefer to NOT be appointed as directors on the offshore entities due to either privacy reasons, or foreign public directorship reporting rules in their home countries. When we appoint nominee directors on our clients’ entities, we provide our clients with pre-signed, undated letters of resignation from each director so they can replace the directors at any time. The nominee directors we appoint are only there to fill in the blanks at the public registry and they have no authority over the entity for any kind of decision making. |
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