All foundations are subject to payment of registration fees and annual franchise tax equivalent to those charged to Panamanian corporations. There are no taxes, duties, charges or fees on all kinds of constitution, modification, extinction, transfers or encumbrance regarding the foundation assets and income related with them, if these assets meet the following conditions:

1) they are located overseas;

2) money deposited by natural or juridical persons whose rent is not of Panamanian source or not taxable in Panama;

3) all kinds of stocks and securities, issued by corporations whose rent is not of Panamanian source or not taxable by any cause, even though those stocks or securities are deposited in Panama.


They should be non-profitable for Private Interest Foundations. Nevertheless, commercial activities may be carried out and capital stock rights may be enforced by the foundation as long as the outcome of such activities is destined to the foundation's purposes.


Registration of the foundation instrument before the Public Registry Office shall invest legal capacity to the foundation, regardless of any other legal or administrative authorisation. This registration will also be of public record against third parties.

Foundation Capital

An important characteristic of the foundation capital is that it constitutes an independent property from the founder's personal property. For this reason, foundation capital may not be attached or garnished, except for damages or obligations incurred as the result of the foundation purposes. In any case, foundation capital will compensate personal obligations of the founder or the beneficiaries.


Private Interest Foundations and transfers to the foundation are irrevocable.

Foundation Board

The main function of foundation board is to fulfill the foundation purposes. It should consist minimum of three members, in the case of natural or juridical persons.

Supervisory Organs

The foundation instrument, along with the foundation board, may provide for the appointment of supervisory organs (auditors, custodians, or other similar persons), appointed by the founder or majority of founders.


Specific causes are established in the Law, but in general they may be perpetual.

Foreign Foundations

Foreign foundations may be registered in the Republic of Panama and thus be legally continued as private interest foundations in Panama. On the other hand, private interest foundations constituted according to Panamanian Law, are entitled to be transferred to another jurisdiction.


It may be settled in the foundation instrument that all controversy will be settled by arbitration. In lack of this provision, general Procedural law would be applicable.

Banking Secrecy

The foundation board and supervisory organ members, as well as private or public officers that are aware of the foundation activities or operations must provide banking confidentiality and reserve at all times, and are subject to criminal and civil responsibility for the observance of this rule.

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The IMF has reported that Panama was one of the fastest growing economies in the world last year.
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.
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.
The President of Mexico Felipe Calderon has initiated talks with Panama regarding a free trade agreement that has been awaited for a long time.
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.
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.
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.
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.
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.
The Panama Canal Authority (ACP) held a public hearing in Balboa, Panama, with the participation of fourteen representatives from shipping and government.
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.
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.
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.
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.