2/17/2021
HOW TO SET UP A FOUNDATION? - PANAMA LEGAL CENTER
HOW TO SET UP A FOUNDATION? Home / HOW TO SET UP A FOUNDATION?
WHAT SHOULD YOU KNOW ABOUT FOUNDATION? People set up a foundation in Panama for various reasons. Based on the recent survey, most Foundations are set up when someone looking to establish; a family trust, estate p eliminating probate taxes and asset protection. By having a private foundation in Panama, you can accomplish all of the above.
FOUNDATION MISSION STATEMENT A frequent question we hear from Foundation Source clients when they rst establish their foundation is whether they should create a mission statement. Our answer: yes, necessarily right away. The IRS requires that private foundations have a statement specifying the organization’s charitable intent in its incorporating documents. To ful ll this m many foundations adopt the broad statutory language that de nes all nonpro ts (e.g., “for religious, scienti c, literary, educational or other charitable purposes.”) Beyond this, th legal requirement to create a mission statement.
BEST TIME TO SET UP A FOUNDATION? It is true that you can set up a private foundation for bene t of your family anytime during your lifetime but it is wise to act before is too late. Having a private foundation ha advantages such as reducing estate tax liabilities and avoiding probate tax. For tax purposes, it may be necessary to distinguish between the following types of foundations:
1. Private operating foundations 2. Exempt operating foundations 3. Grant-making (private non operating) foundations
TYPES OF FOUNDATION There are two types of foundations: A. Domestic Private Foundation -Simply a foundation that is established in your home country called domestic foundation and is bound by all laws and regulation of your domestic domicile. B. O shore Private Foundation – Unlike a domestic foundation, an OFFSHORE PRIVATE FOUNDATION is established abroad and usually in a jurisdiction that o ers protection as well as tax bene ts.
BEST COUNTRIES TO SET UP A FOUNDATION Tax Haven JURISDICTION – A foundation can be set up in any country in the world however it is best to establish your private foundation in a jurisdiction that protects your assets while o ering substantial tax bene ts ( tax exemption). For example, country of Panama is well known for its tax exemption to foreign investors and is known as TAX HAVEN JURISDICTION. Panama is the only country in the world that provides both bene ts to its foreign investors. Other countries such as Belize and Cook Islands also considered tax haven jurisdiction but none of these countries o er the same quality that Panama o ers. PANAMA FOUNDATIONS ARE PRIVATE & ANONYMOUS. Panama foundations are often used for creating family trust, estate planning, asset protection & This combination of features & bene ts make Panama an ideal jurisdiction for setting up a foundation. You can consult with panamalegalcenter (https://www.panamalegalcent and speak to one of their experts how to set up your private foundation in Panama.
WHAT ARE PRIVATE FOUNDATION BENEFITS? There are many reasons to establish a private foundation however most people choose a foundation for: Family trust & estate planning
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Asset protection
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Avoiding probate cost & taxes
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Privacy & anonymity
for its exemption to its investors.
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Panama does not impose any type of taxes for its foreign investors NONE Primary bene t of a private foundation is TAXES and Panama foundation
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Country of Panama provides all of the above to high net worth individuals who wish to achieve all of the above. In fact, Panama is the only country is considered a TAX HAVEN CHAT!that FREE GetButton (http:
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2/17/2021
HOW TO SET UP A FOUNDATION? - PANAMA LEGAL CENTER
Panama does not impose any type of taxes for its foreign investors, NONE. Primary bene t of a private foundation is TAXES and Panama foundation
Eliminates income tax for every year Avoids paying capital gains taxes Eliminates potential estate taxes.
How To Eliminate / Reduce Your Tax Liabilities? A private foundation can be used for various purposes in order to reduce and or eliminate tax liabilities. For example, you could donate shares of a public or privately held comp private foundation and while you fund your foundation, you reduce your tax liability. In case that the private foundation choose to sell the shares to public, its tax liability is re minimum and will only pay a nominal excise tax (1 – 2%) on the net gain. In addition to the above, if you have a foundation set up in Panama, your private foundation DO NOT TAXES WHATSOEVER TO PANAMA. The only taxes that you pay to Panama government is a yearly xed franchise tax of $350.
How To Fund A Foundation? There are many ways that a foundation can be funded. It can be funded with cash or other tangible properties such as real estate properties, stocks & bonds as well intangible pr such as patents, trademarks, etc.. Also it is very prudent to set up a private foundation in order to reduce tax liabilities when someone receives inheritance whether in cash or oth of assets. It is wise to plan ahead and establish a private foundation for bene ts of your family and loved ones. When setting up a family trust, a foundation is formed and then assets will be transferred to the foundation. In this case, family trust protects assets of the foundation while red tax liabilities. Foundations can be funded with donations of:
Tangible assets such as Cash, jewelry, art, antiques, boats, airplane and cars Tabgible assets such as residential and commercial real estate properties Intangible properties such as trademarks, patents and other types of intellectual property rights Shares of a privately held or publickly traded companies, bonds and CDs
Is Foundation Good For Retirement? No matter how old you are, it is never too early to think about your future and how to retire in comfort. By establishing a private foundation, you may achieve such goal. Once y your private foundation, you may donate funds to your foundation and these assets are excluded from your estate and, as a result, are not subject to either federal or state esta High-net-worth individuals and professionals who intend to reduce their tax liabilities, private foundation serve as an ideal vehicle.
HOW TO SET UP A FOUNDATION? Setting up a private foundation is not di cult and we can assist you to accomplish such task, We have formed many foundations for our foreign clients in the past and our clie saved millions of dollars in taxes. Consult with your panamalegalcenter (https://www.panamalegalcenter.com/) and they can assist you to form your foundation in Panama.
1. Choose a name for your private foundation. You can name your private foundation after your family or something generic that inspires you to maintain a low p 2. Complete the brief set-up questionnaire. This tells us who will fund the foundation, trustees and bene ciaries. 3. Fund your foundation with assets you desire.
Foundation Strategy Donors often wonder what they need to know and do before they establish a private foundation. Here are some of the questions many of our clients ask as they begin the proces
HOW TO SELECT BOARD OF DIRECTORS? One of the great things about having a private foundation is that you alone get to choose its board structure and decide who initially sits on it. Who you choose to sit on you depends on what type of foundation you want. Will it be a family entity or are you going to pursue a speci c mission or fund a particular community? You will want to bring on peo expertise related to your objectives. Some states, such as Delaware, allow you to serve as the foundation’s sole director, you may also appoint a spouse, children, other family members, business associates or whom as o cers and directors. To help increase involvement by family and friends without appointing them to the foundation, Foundation Source has created a unique giving tool calle Certi cates.” These enable the foundation to give limited granting rights to those not o cially on the foundation.
MINIMUM SIZE OF A FOUNDATION? The old wealth advisors’ rule of thumb advised that a private foundation did not make sense unless the initial funding was $5 million. This was due to the complicated nature o them up and the ongoing expenses to keep them running. Foundation Source has revolutionized the private foundation by developing technology and e cient proces dramatically streamline the delivery and ongoing administration of private foundations. Foundation Source makes it possible to establish a new foundation with as little as $25 initial funding.
HOW MUCH TIME NEEDED TO MANAGE YOUR FOUNDATION? In short, you can devote as much or as little time as you’d like. Although some of our clients have chosen to manage their trust on a daily business. We at panamaleg (https://www.panamalegalcenter.com/) try to minimize the work associated with running a foundation. We do everything for you such as pay the yearly franchise tax in Panama, compliance and provide philanthropic experts if needed. All you have to do is to relax and enjoy your life.
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DO YOU NEED TO HAVE PEOPLE WORKING FOR YOUR FOUNDATION? 76
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You do not need to have anyone to run your foundation unless you choose to. panamalegalcenter (https://www.panamalegalcenter.com/) can act as your agent. However
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foundations are permitted to pay reasonable compensation to its foundation “insiders” (including trustees, directors, o cers, donors, and foundation managers as well
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WHAT IS THE LIFE CYCLE OF A FOUNDATION?
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immediate relatives) for professional services to the foundation.
There are good arguments for both limited lifespan and perpetual foundations. The only right answer is the one that’s right for your foundation. The IRS does not provide guidanc GetButton (http: issue nor is there consensus in the eld on best practices. As such, we recommend that donors and families address the issue of the foundation’s lifetime early on in the foun
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