SPECIAL INFORMATION FOR US CITIZENS
Some US-based clients come to us after reading about structures, such as the "Offshore Trust" or "Common Law Trust", as a mechanism for estate tax planning or mere asset protection. The trust vehicle is not a bad idea, nor is there anything wrong with laws that recognize trusts. The problem really is the judges that enforce such statues, and the fact that it is an entity only found in common law nations (such as Canada and the US). Because many judges have gone the route of "re-interpreting" the law in such a way that the Trust structure is not as secure as one would be lead to believe, our advise is to take a look at the Panamanian Foundation instead. Why? For one thing is does have some attributes that actually make it superior to a trust in many ways, and perhaps more importantly, it is a vehicle backed by a civil law country.
The Panamanian Foundation
The Panamanian Foundation structure was codified into law in 1995. While this structure is still a fairly new entity for Panama, the Foundation structure itself has existed in Liechtenstein for quite some time and the Panamanian structure was in fact modeled after the Liechtenstein legislation. Some advantages a Panamanian foundation has over a Liechtenstein foundation include; it is far less expensive to create (A Panamanian Foundations costs less than $2,000 while some firms have charged as much as $10,000 to create a Liechtenstein foundation), it is far less expensive to maintain, it offers more flexibility.
To understand the idea and benefits of the foundation structure, clients should first understand the difference between a trust and a corporation. It is also important to note the difference between English speaking countries that use Common law and many non-English speaking countries, like France, that use Civil Law. We mention both these points because, in fact, the Panamanian Foundation structure offers some of the best benefits of both the trust structure and offshore corporation in one. Also, in our opinion, a structure domiciled in a Civil Law jurisdiction is the better choice for a client that is resident or domiciled in a Common Law country.
It is true that most clients are seeking some way to create a vehicle to reduce tax liabilities and protect their assets from lawsuits or claims against their estate. This is easily understood. The difficulty for many clients is of course deciding upon the best plan of action or structure to use. As a brief comparison, we think most people understand the idea behind a corporation and how it works. The corporation structure is used worldwide to basically carry out a business enterprise and keep the owners business assets (and liabilities) separate from his own. As a separate entity, the corporation usually has it’s own tax identification number and is what can be termed a juridical person. Certainly it is not a human being, but it has all of the rights and responsibilities of a natural person under the law. The key point is that the assets and liabilities of the corporation are separate and distinct from those of the shareholders.
The trust structure, however, is a vehicle usually only found in common law countries and is most commonly used as an estate planning mechanism. The history of the trust is an interesting one and dates back to the period in England when wealthy noblemen and knights were called to fight in the crusades. In order to protect inheritance rights and of course family assets, lands and holdings were placed “in trust” and were managed by a well regarded friend or family member. This was done to insure that the property was not mismanaged and to also insure that a trusted friend or family member was present to make sure the owner’s wishes were carried out in case of the owner’s death or incapacitation. The trust structure was meant to be a safe haven, with the trustee as the guardian of that safe haven. It was not meant to be a structure that would engage in business activities (as a corporation). Again, under current interpretation in modern law, the trust structure is in theory meant to be a separate juridical person. In this was it also is meant to separate the owner from his assets and offer protection under the law. Like any other entity, the purpose is to keep the owner’s previously held assets safe and secure from violation or attachment. It is unfortunate, but recent court cases in the US have proved that US judges either do not understand the essence of what a trust is meant to be or simply have made decisions that in essence disregard trust legislation altogether. For this reason, any trust structure that is a domiciled in the US and some other common law countries are not worth the paper they are written on. This is not to say that the laws in these countries are always poor regarding these structures. The real current problem is that those upholding the law (judges and court systems) have chosen to disregard the law or interpret the law in such a way that no real protection is offered with these type of structures. This is why we strongly prefer Civil Law jurisdictions over those based upon common law. Part of the reason is how the legal systems in these countries operate.
We offer world class estate planning and asset protect in numerous locations, the top location being Panama. Naturally one needs a personally assessment on the financial circumstances and personal situation. In today's offshore world no one should have signatory control over your assets, only you. There are simply too many changes of your money growing wings and disappearing. it is far safer for YOU and only you to control your assets. You can do this legally as the Protector of a Panamanian Foundation directed by our Nominee Council Members. Only the Foundation Charter document is public record.
Advantages of the Panamanian Foundation:
The Assets placed inside a Panamanian foundation are sole and separate property and cannot be seized to satisfy any personal judgments or obligations of the founder or the foundation’s beneficiaries. Assets inside a Panamanian foundation cannot be attached in order to satisfy any claims against the founder, including judgments for divorce, lawsuit and other liabilities.
The Panamanian foundation offers the best of a trust and the best of an offshore corporation. While the foundation cannot technically engage in business activities, it can own the shares of a company engaged in business activities. It is also permissible for the foundation to engage in any activity, which will increase the value of assets. This means that a foundation can be the owner of bank accounts, securities brokerage accounts and real estate holdings.
The prime goal of the Foundation is to deliver its assets to and distribute them in due time among the Beneficiaries in accordance with the Founder's wishes. The Beneficiaries may be relatives, friends, and loved ones of the Founder, as well as some businesses, educational, religious or philanthropic institutions. The details of the Beneficiaries and the order of distribution of the benefits among them may be specified in Regulations - a private confidential document.
The Foundation Council (the principal administrative body similar to Directors of a corporation) provides day-to-day management of the assets under the supervision of the Protector. The Protector is "a watchdog" overseeing the proper fulfillment by the Council of all instructions of the Founder. The Founder appoints both Foundation Council members and Protector.
A Panamanian Private Foundation is used most often as a low profile or actually anonymous vehicle. It can:
Protect Your assets from possible future seizure by creditors;
Keep Your assets away from political or economical instability;
Optimize Your tax planning;
Provide You with an alternative "living" will instrument;
Manage Your pension or profit sharing plans for Your employees;
Hold shares of daughter companies (to be a holding company);
Own and transfer freely real and/or personal estate objects, land;
Manage bank and brokerage accounts;
Invest offshore;
Provide continuity of family business, preventing splitting of property;
Defend minors and/or disabled persons;
Carry out educational, philanthropic, humanitarian, scientific or charitable activities.
Private foundations: a healthy cross between a Trust and an IBC.
The Panamanian Foundation took the best from the three worlds: Liechtenstein Foundations, Common Law trusts, and International Business Companies.
The inherent features of a Foundation:
The Founder(s) and Beneficiaries are not answerable for liabilities of the Foundation and vice versa.
The creditors may claim the Founder's or any third party's endowments and/or gifts only within 3 years after their transfer to the Foundation's assets.
May function as a legal substitute for a will superseding the inheritance laws (i.e. forced heirship) of the Founder's jurisdiction; it may come into force in case of death of the Founder.
No shares and Share Certificates are issued, and there are no owners of a Foundation's assets except for the Foundation itself. Since there are no shares of ownership in a Panamanian foundation, the founder does not own the foundation and as such gains important tax reporting and protection benefits with this.
The duty of the Founder is to transfer the initial endowment of not less than $10,000.
May be used for family, charitable, scientific, religious or other non-profit purposes.
Any third parties may as well make contributions to the Foundation assets.
Cannot undertake commercial activities on a regular basis.
The assets of the Foundation cannot be used to satisfy the obligations of the Founder or of beneficiaries (e.g. lawsuits, divorce).
We offer US Citizens a deluxe package which includes the first year of administration, at just $7,500. Set up time is very fast indeed, usually four weeks for delivery to you. Obtain your offshore corporate checking and trading accounts for your Bearer Shares Anonymous Corporation, and Private Interest Foundation - PLUS a NO-NAME ATM Card to withdraw cash worldwide.
Prices for this complete package – All Inclusive Fees – No Hidden Cost:
International Fiduciary Structure package US$6,500.00
Nominee Directors/Officers/Resident Agent Included!
Annual Government Fees Included!
Certificate of Incorporation with Apostille Included!
Notarized Power of Attorney Included!
Offshore Corporate Multi-currency Account Included!
On-line Brokerage/Trading Account Included!
Bank Deposits Included!
Maintenance of Bank Accounts Included!
Offshore No-Name ATM Debit Card Included!
One Year Serviced Mailing Address & Mail Forwarding Included
Invoicing/Re-Invoicing Included
DHL or Fed Ex courier Included!
Renewal fees are US$4,500.00 per year per structure payable by date of anniversary of incorporation.
We would like you to know that, in an effort to facilitate the functionality of your offshore structure and in order that you can take advantage of the management and protection of your assets, we have taken the initiative of offering full corporate management services through our Trust Company because we know that due to recent regulatory changes in the U.S., it has become increasingly difficult to create/maintain effective offshore structures that can easily open bank or investment accounts, trade offshore, and/or obtain credit/debit cards, that also allow for ready accessibility to the corporate owner's assets.
If you consider this proposition of interest, please contact us.
