Asset Protection And Panama Foundations

Asset Protection and Panama Foundations

Asset Protection and Panama Foundations

As governments in the United States and other countries encroach more and more on the privacy of their citizens, people search to find privacy and security for their property, possessions and corporate information. While asset protection has become a hot topic in both corporate and private sectors, the judicial system (particularly in the US) has systematically weakened the trust structure. While this weakening has had negative effect on trusts in the US, offshore trusts have become better options; many consider the best country for offshore asset protection to be Panama.

Panama passed laws in 1995 to create the Panamanian Foundation. While this is a fairly new structure, it was patterned after the Foundation structure of Liechtenstein, which has successfully existed for quite some time and has been a valuable asset protection vehicle. In fact, for those who are offshore, Panamanian Foundation has several advantages over its Liechtenstein predecessor; it is much cheaper to establish a Panama Foundation and it is cheaper to maintain a Panama Foundation. A Panama Foundation offers more flexibility while protecting the assets of the holder.

Trusts, Foundations, and Corporations

To understand the idea and benefits of the foundation structure, it is important to first understand the differences between trusts, foundations, and corporations. Corporations are a vehicle to reduce tax liabilities and protect assets from lawsuits or claims against ones estate. The corporate entity is used worldwide to protect its assets and liabilities separate from the personal wealth of the owner. The key point is that the corporations assets and liabilities of are separate and distinct from those of the shareholders. Conversely, trusts are typical in common law countries and used as a haven in estate planning. The common interpretation of trusts is that they are actually, in the eyes of the court, unique individuals and have rights under the law. Foundations are vehicles for holding assets.

It is also important to understand something else; English speaking countries typically use Common law and many non-English speaking countries traditionally use Civil Law. The Panamanian Foundation structure offers some of the best benefits of both the trust structure and offshore corporation in one; in addition, since Panama is a Civil Law country, it is believed by many to be a better choice for those people who reside in countries that are under the jurisdiction of Common Law. (Such as the US) Because of these benefits, an offshore Panamanian Foundation can be an excellent means of asset protection for many Americans and other high tax countries in Europe and elsewhere.

This is precisely why more people are seeking asset protection, both personally and corporately, in the offshore Panamanian Foundation. Panama has become a major Latin American banking center and possesses perhaps the best secrecy laws. It is possible to Panama to take advantage of the privacy aspects of a corporation as well as a Foundation. In each case the individual need not have his identity made public. A Foundation can own a corporation in Panama, Belize or elsewhere. The corporation can own a number of assets including bank accounts without the corporate shareholders being listed publically. This high level of asset protection makes offshore Panamanian Foundations very attractive to people from common law countries.

by: Gary H. Edwards

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