Compare asset protection with a trust versus with a Panama Private Interest Foundation or a Panama bearer share corporation. Look to a combination of Panama foundation and Panama corporation as a more private and simpler solution to most issues usually requiring a trust.

A Foreign Asset Protection Trust

There are numerous types of trusts but all have a settlor, also known as a trustor, grantor, donor, or creator. This individual entrusts property to others, named trustees. The trustees become the legal owners of the property but are obliged by law to hold the property for the benefit of a third party, the beneficiary. This obligation is called a fiduciary duty.

The purpose of an foreign asset protection trust is to legally distance an individual from his property so that creditors cannot attach those assets even though the person himself could, in theory, be bankrupted.

The documents of a trust are in most countries discoverable and therefore subject to attack by creditors. This is the basic problem that an foreign asset protection trust might have that can be bypassed by dealing with the same issues in Panama.

Panama Foundations and Corporations versus and Foreign Asset Protection Trust

Panama specializes in privacy of assets and asset protection. Panama’s banking laws and the structures of Panama Foundations and Bearer Share Corporations favor asset privacy and protection. This combination of factors allows you to avoid being the target of fishing expeditions in frivolous law suits looking for “deep pockets.” Assets held in Panama in Panama’s financial vehicles such as foundations and corporations are hard to find and harder to attack.

Bank accounts in Panama can be set up with a corporation or foundation as the owner. The owner or beneficiary of the account owner need not be discoverable. By comparison an foreign asset protection trust and its assets are not private.

Panama Bearer Share Corporation

A Panama bearer share corporation has no recorded owner. The owner of a Panama bearer share corporation holds physical certificates of stock of the corporation. The Panamanian public registry has no record of the person’s name.

The certificates for a Panama bearer share corporation do not need to be kept in Panama nor do any records of the corporation need to be kept in Panama. So long as the Panama bearer share corporation derives none of its income from business in Panama it need not pay taxes in Panama or even file tax papers in Panama.

After formation of the corporation the Panama bearer share corporation stock certificates can be transferred to another owner without the original lawyer being involved. This is an alternative to use of a trust or will for passing on assets to your heirs.

Panama Private Interest Foundation

A Panama foundation can own assets anywhere in the world. This includes real estate, companies, bank accounts, patents, personal assets such as airplanes, cars, etc., stocks and bonds, royalty rights, and collectibles such as coins and stamps as a partial list.

An example of the asset protection of a Panama private interest foundation is that there is a three year statute of limitations on “fraudulent conveyance.” That is after three years no on can successfully challenge you in a Panamanian court for transferring assets to the foundation. Thus a Panama foundation will provide long term asset protection free from challenge of foreign jurisdictions after the initial three year period.

Attorneys in Panama often suggest a Panama private interest foundation as a means of protecting you again a foreign attack on your assets as well as any possibility that Panama might ever change its laws regarding foreign ownership.

The Foundation’s assets can only be frozen if the foundation itself is accused of doing something illegal it its own business dealings. Standard advice for a Panama foundation is to use the foundation as a holding company. If a company owned by the foundation has to deal with legal issues they do not spill over into other foundation business.

Advantage of Panama Foundation and Corporation over Foreign Asset Protection Trust

The chief advantage of setting up a Panama corporation or foundation is the privacy and attendant asset protection these vehicles afford.

Talk to a Panama attorney regarding an foreign asset protection trust versus a combination of Panama corporation and foundation.

If you would like help finding a reputable Panama attorney feel free to contact us at ABPanama for a referral.