Asset protection entities in Panama

Thank you for your phone call of 5 June 2008. As I outlined briefly during our conversation, I believe tne Panamanian foundation (hereafter the foundation) might be a suitable alternative asset protection mechanism. I have now had the opportunity to research this more fully, and am pleased to provide the following summary of the foundation. The foundation is largely based on Liechtenstein's Stiftung, as described in my letter of 2 June 2008. Like a corporation, the foundation can hold title to assets In Its own name. However, it can also make discretionary payments to the founder or beneficiaries, like a trust. As with the Stiftung, the foundation is mostly controlled by its bylaws. These bylaws do not have to be registered or publicly disclosed. Perhaps the greatest advantage of the Panamanian foundation over the Stiftung is that the Panamanian version is relatively inexpensive to form and maintain. Another advantage is that Panama is in the U.S. Eastern time zone, making administration of the foundation from the U.S. easier. However, the time difference between the U.S.A. and Liechtenstein does have the advantage of being potentially frustrating to creditors in communicating with their local counsel.

Panama has a three-year statute of limitation for fraudulent transfer challenges to contributions to the Foundation. If gifting is utilised to fund the foundation, there will be a three-year window available for creditors to attempt to void the gifts. Once past the three-year limitation, the assets are generally safe from creditors. Panamanian law specifically provides that the foundation assets may not be applied towards the debts of either the founder or any beneficiary. As with the Stiftung, probably the best use of the Panamanian foundation is not to hold assets but rather to own an entity that is used as a management company. From a creditor's viewpoint, the management company will be owned by a Panamanian charity with three Panamanian residents as members of the foundation's council. The creditor will likely not see that the U.S. settlor has appointed one or more protectors to make sure that the council members carry out the purposes of the foundation, as set forth in tne charter. Therefore it would be very difficult for a creditor to claim that the U.S. owner of the asset being managed has any ties to or control over the foundation. I would be very pleased to provide you with further details should you be interested in setting up such an entity, and look forward to receiving further instructions. Yours truly John Piatt

Language Focus

21c 2d 3a 4b 5e

3 1 apply, enforce, render, recognise

2 apply, enforce, harmonise, modernise, recognise

4 1 on the other hand 2 Indeed 3 Conversely
4 However 5 notably 6 In addition

7 Thus / Therefore 8 however 9 Therefore / Thus

Date: 2015-12-24; view: 1040