PANAMA FOUNDATION LAW No. 25, June 12, 1995
"Whereby Private Foundations Are Regulated"
PART 1 of 4
THE LEGISLATIVE ASSEMBLY DECREES:
Article 1.
One or more natural or juridical persons by themselves
or through third parties, may create a private foundation
in accordance with the provisions set forth in this
law. For such purposes, the endowment of a patrimony
exclusively dedicated to the objectives or purposes
expressly stipulated in the foundation charter is required.
The initial patrimony may be increased by the creator
of the foundation, hereinafter called the founder, or
by any other person.
Article 2.
Private foundations shall be governed by the foundation
charter and its regulations, as well as by the provisions
of this law and other legal or regulatory provisions
that may be applicable. The provisions of Title II of
Book I of the Civil Code shall not apply to these foundations.
Article 3.
Private foundations shall not be for profit. However,
they may carry out mercantile activities in a non-habitual
manner or exercise the rights deriving from titles representing
the capital of mercantile corporations that make up
the patrimony of the foundation, provided that the economic
results or proceeds of such activities be dedicated
exclusively for the purposes of the Foundation.
Article 4.
Private foundations may be constituted to become effective
at the time of constitution or after the death of its
founder, by anyone of the following methods:
a) Through a private document, executed by the founder,
whose signature must be authenticated by a notary public
at the place of constitution.
b) Directly before a notary public at the place of constitution.
Whichever may be the method of constitution, it must
comply with the formalities established in the present
Law, for the creation of foundations.
In case of a foundation being created either by public
or private document, to have effect after the death
of the founder, the formalities stipulated for the execution
of testaments shall not apply.
Article 5.
The foundation charter shall contain:
1. The name of the foundation, expressed in any language
with characters of the Latin alphabet, which shall not
be equal or similar to that of a foundation previously
existing in the Republic of Panama, 80 as to avoid confusion.
The name must include the word "foundation"
to distinguish it from other natural or juridical persons
of a different nature.
2. The initial patrimony of the foundation, expressed
in any currency of legal tender that in no case shall
be less to a sum equivalent ten thousand Balboas (B/10,000.00)
=U.S. Dollars .
3. A complete and clear designation, of the member or
members of the Foundation Council, to which the founder
may belong, including their addresses.
4. The domicile of the foundation.
5. The name and address of the Resident Agent of the
foundation in the Republic of Panama, which shall be
an attorney or a law firm, who must countersign the
foundation charter prior to its registration at the
Public Registry.
6. The purposes of the foundation.
7. The manner in which the beneficiaries of the foundation
shall be designated, among which the founder may be
included.
8. The reservation of the right to amend the foundation
charter whenever deemed convenient;
9. The duration of the foundation.
10. The destination to be given to the assets of the
foundation and the method of liquidation of its patrimony
in case of dissolution;
11. Any other lawful clause that the founder may deem
convenient.
Article 6.
The foundation charter, as well as any amendment thereto
must be written in any language with characters of the
Latin alphabet, and must comply with the regulations
for the registration of acts and titles in the Public
Registry; for which purpose it must be previously protocolized
by a notary public of the Republic (of Panama). If the
foundation charter or its amendments are not written
in the Spanish language, they must be protocolized together
with their (Spanish) translation by an authorized public
translator of the Republic of Panama.
Article 7.
Any amendment to the foundation charter, when permitted,
shall be carried out and executed in accordance with
what is established therein. The respective agreement,
resolution or act of amendment shall contain the date
on which it was carried out and the name, clearly identifiable,
of the person or persons subscribing it and their signatures
which shall be authenticated by a notary public of the
place where the document is executed.
Article 8.
Every private foundation must pay a registration fee
and an annual maintenance tax equivalent to those established
for corporations in Articles 318 and 318A of the Fiscal
Code. The procedure and method of payment, the surcharge
for late payment, the consequences for lack of payment
and all other complementary provisions of the aforementioned
legal principles, shall be applied to private foundations.
Article 9.
The registration at the Public Registry of the foundation
charter shall bestow upon the foundation juridical personality
without the need for any other legal or administrative
authorization. Besides, the registration at the Public
Registry constitutes a means of publicity before third
parties.
Consequently, the foundation may acquire and own assets
of any kind, incur obligations and be a party to any
type of administrative and judicial proceedings in accordance
with applicable legal provisions.
Follow the link below to the next part of the
Panama Foundation Law 25 Articles 1-37, for the continuation....
