Private Foundation vs Trust

There are certain similarities between Trusts and Private Interest Foundations. The fundamental similarity is absolute confidence between the client and the trust company. However, there are also  substantial distinctions between the Panama Private Interest Foundation and the Panama Trust. The main of them are as follows:

The trust is a legal act by means of which a person called the settlor transfers assets to a person called the trustee, who will manage or dispose of them in favour of a beneficiary (who can be the same person as the settlor). The trustee is usually a firm or company engaged professionally and customarily in the business in managing properties, investing liquid assets and transferring assets which are legally under the ownership of said trustee, but subject to the provisions of the trust instrument.

On the other hand, the registration of the foundation charter at the Public Registry of Panama grants the status of independent legal person to the Private Interest Foundation; due to this, the foundation can purchase and hold assets of any kind and can enter into any agreements.

The control and administration of the assets in the trust is the power of the trustee. In the Private Interest Foundation, this power of control and administration belongs to the foundation council. The trust allows the appointment of one or more trustees without a minimum or maximum. The foundation council requires a minimum of three individuals or one corporate director.

The trust law does not contain provisions for asset protection against future claims from creditors. The Private Interest Foundation legislation has very clear provisions limiting legal claims against the founder.

The foundation, which is different from the trust, is the owner of its own assets. These assets are managed by the foundation council, which has the function and the power to fulfill the objectives and purposes of the foundation. The use of the foundation as a structure and a tool for the ownership of any movable or immovable assets is not applicable to trusts, because the trust does not represent by itself a legal entity different from the trustee. In order to transfer the authority of the settlor over the trustee and over the assets managed by the trustee, it is required to execute other formal documentation with the same requirements to that by means of which the settlor transferred the assets to the trustee.

Summary:

General use of a trust is to substitute wills and to execute commercial transactions such as purchases of real estate, opening and administering bank accounts, investing in stock markets and mutual funds, and the entering into international agreements.

Private Interest Foundation is a discreet tool for opening and operating bank accounts, and is created principally for testamentary protection, to manage and administer the distribution of money and family properties, to be a philanthropic or ecclesiastic institution, and to become holding entity that operates as the corporation's owner.

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30/09/2006
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01/09/2008
The IMF has reported that Panama was one of the fastest growing economies in the world last year.
22/08/2008
Cable & Wireless has announced that its principal operations in the Channel Islands, the Caribbean, Panama, Macau, and Monaco are expected to invest more than USD 400 million in Caribbean telecommunications development.
05/07/2008
The IMF concluded the 7th Annual Regional Conference on Central America, Panama and Dominican Republic and examined how globalization and economic integration is impacting Central America's tax structures.
14/03/2008
The President of Mexico Felipe Calderon has initiated talks with Panama regarding a free trade agreement that has been awaited for a long time.
29/02/2008
Panama's long-term sovereign credit rating has been raised by Standard and Poor's to BB+ from BB. This new rating is based on strong economic growth of Panama and continued improvement in fiscal health of its government.
19/11/2007
Recently, a new law was passed by Panama's National Assembly to give multinational companies that perform certain tasks a significant tax break. As a result, according to a company specialising in investment property in Panama, the country's real estate sector is expected to experience an unprecedented boost.
19/09/2007
The WTO has announced completing a Trade Policy Review of Panama and published the results of the review. The report suggested that the rationalization of assistance programmes and the simplification of the trade regime would help Panama to sustain the economic growth.
22/08/2007
Economic growth in Panama is expected to exceed last year's 8.1% because of a strong investment climate, a dynamic services sector and the Panama Canal expansion programme.
03/07/2007
The Trade Promotion Agreement has been signed by Panama and the United States to eliminate tariffs and other barriers to the trade in goods and services between Panama and the US.
21/03/2007
The Panama Canal Authority (ACP) held a public hearing in Balboa, Panama, with the participation of fourteen representatives from shipping and government.
11/01/2007
Panama banks Banco General and Banco Continental have come to the agreement to merge. This merger will create one of the largest financial services companies in the region. The merger is expected to close during 2007.
07/11/2006
Panama hopes to become Argentina's replacement on the UN Security Council after Latin American and Caribbean Group (GRULAC) of the UN Security Council delayed as far as some English-speaking Caribbean members were reportedly upset about not being adequately involved in this process.
08/09/2006
At a meeting of Panama's President and Executive President of the Central American Bank for Economic Integration (CABEI) agreed that by the end of 2006 Panama will become an 'extra-regional' partner of CABEI. This status will provide Panama with the access of funding of about USD 60 million.
28/06/2006
Chile and Panama signed the free trade agreement that opens up 92.5% of the Chilean economy to Panamanian producers. Now most Panamanian products will enjoy a zero tariff when entering Chile's market.