A foundation, is much like a trust, and can be used to control assets without ownership which is key to any asset protection plan.  Typically a foundation is used as the inner most layer in an asset protection plan because it is the strongest legal structure available.   

Offshore Foundation:  Why Panama?

A foundation located offshore is much more powerful for asset protection than it's onshore counterpart because onshore foundations are many rules and red tape.  One of the main issues, when considering asset protection, is the fact that in many countries the beneficiary of foundation is deemed to be the owner.  This weakens the structure because now the assets are tied to the owner.  In Panama, however, there are secrecy laws that prevent anyone from discovering who the beneficiary of a foundation is. 

In addition, onshore foundations have rules relating to how and where foundation money can be used.  A Panama foundation has no rules or limitations of any kind.  You can have the foundation do anything you wish.  The only restriction is that it cannot go out and start selling a product.  It can however, own assets such as boats, cars, real estate, stocks, bonds, etc.  A Panama foundation can also own a corporation that can in turn operate a business.  It is precisely this combination that gives businesses the ability to store their profit in a foundation without anyone knowing. 

The Key to Proper Asset Protection using a Foundation and Corporation

The corporation must be registered so it is impossible for anyone to discover what foundation owns it.  The corporation is the outer layer, where money comes in and out of your asset protection structure.  Although its common sense that you would not want anyone to be able to discover any relationship between the corporation and foundation, we continually get customers from other law firms that have used the same directors as founders, the same resident agent, and they are registered on the same day.  You don't have to be a rocket scientist to know this will compromise your asset protection plan.  Yet we see it all the time. 

What is a Panama Foundation?

To understand the strength of Panama foundation you first need to understand the structure of it.  Generally a foundation is much like a trust, with similar roles, but it also has the structure and abilities of a corporation.

Roles in a Panama Foundation

A Panama foundation has four roles.  Two are public roles, meaning anyone can go to the Panama public registry and look up who is occupying those roles.  The two public roles are the "Founder" and the "Council Members".  Generally our customers like to use our nominees to fill these roles.  The two private roles, are often occupied by the customer.  These roles are the "Protector" and "Beneficiary".  Both of these roles are completely secret and it is impossible for anyone to find out who is in these roles.  Since a foundation can own a bank account, this makes the perfect place to store money for safe keeping, provided you operate it correctly.  Call for details.

Why a Panama Foundation is Nearly Unbreakable

A Panama foundation can own money, cars, boats, jewelry, real estate, etc.  Yet, under Panama law, a foundation has not owner.  It only has the four roles noted above.  This makes establishing a relationship between you and the assets difficult to impossible.  Notice that there is NO ownership role.  This is very important.  A foundation is a great asset protection vehicle because it provides a way for you to control assets without owning them.

Panama courts do not allow a foundation to be broken easily.

Unless massive fraud or drug money are involved, Panama courts almost never allow a foundation to be pierced.  Recently, Panama banks have recently stopped forming bank accounts for foundations without prior approval from their compliance departments.  In fact, MultiBank stopped opening foundation accounts just a few weeks ago.  The reason is for this move, is due to the fact that foundation bank accounts, once open, are almost impossible to freeze or attach assets.  The governing body over the banks in Panama has issued guidelines to the banks to pay special attention when opening foundation bank accounts.

What a Panama Foundation will NOT do for you !

A foundation in itself, cannot relieve you of your tax liabilities because, in many onshore countries, the beneficiary is considered to be the owner.  Although the beneficiary of a Panama foundation is a private role, this does not mean you are not breaking your local laws.  In some countries, this can constitute tax evasion, which you should avoid at all costs.  The only legal way to avoid this problem, is to use a multi-jurisdictional, self owned, trust structure to take your place, so you legally are not the beneficiary.  Call for details.