Turbulent Economies Lead Investors to Panama Foundations

| 31 Jul 2012 | 0 Comments

In response to the escalating economic problems migrating across the Eurozone, many wealthy investors are looking beyond Europe for an asset protection structure that offers guaranteed protection of wealth. In an effort to safeguard one’s assets from rising financial difficulties, investors are being led offshore for an asset protection strategy that offers relief from tax liabilities, strong privacy benefits and ultimately, the safety of assets from governmental, economical or social complexities. Whether for their own financial benefit or for that of their families, individuals of a high-net-worth status are establishing offshore foundations as a way to avoid falling victim to localized economic uncertainties.

turbulent economiesAs the Eurozone crisis continues to impact negatively on the economies of many countries from across the globe, the present status of several offshore tax havens currently remains optimistic. High-net-worth individuals and corporations that do not trust onshore asset protection tools for the preservation of their wealth are looking to offshore financial centers, including Panama, BVI and the Cayman Islands, to better safeguard their assets whilst benefiting from favorable tax regulations.

Some of the largest international financial centers in the world include the Cayman Islands, Switzerland and Panama. These centers are regarded as recipients of around 30% of the world’s share of Foreign Direct Investment (FDI), demonstrating their value, importance and continued utilization. In this current climate, the link between offshore financial centers and the financial crisis is becoming increasingly apparent, as a growing number of high-net-worth individuals turn to offshore jurisdictions for the greater benefit and protection of their wealth.

Investors from countries such as Spain, Italy, and the UK, which share similar financial circumstances with Greece, have lost confidence in the financial structure of their country of domicile due to a fear that it is making significant losses and lacks the funds to pay back its debts.

With so many tax haven jurisdictions promoting asset protection entities that are ultimately unreliable, it is easy for investors to become shrouded by seemingly attractive asset protection structures. It is therefore essential that the most appropriate and reliable offshore jurisdiction is selected that provides utmost safety and security from external liabilities.

The current landscape is leading many to move offshore for both investment and asset protection purposes, with a significant proportion of these investors selecting Panama for the formation of an offshore foundation.

Why is a Panama foundation so relevant in today’s climate?

The current economic climate affecting both Europe and America has seen many people seek asset protection solutions in Panama, with investors establishing Panama foundations for the greater security of their assets. As Panama foundations are undeterred by the global financial crisis, they are regarded as one of the best instruments to adopt for the protection of wealth. In transferring assets to a Panama Foundation (also known as a Panama Private Interest Foundation), high-net-worth individuals are automatically protected from litigation or claims – a dramatic contrast with the current circumstances in their country of domicile.

The US has the highest rate of lawsuits in the world, with one filed approximately every 30 seconds. Other countries, including the UK, Canada, Australia and New Zealand, are renowned for the vast quantity of lawsuits filed annually, demonstrating one of the many risks of individuals keeping their assets onshore.

asset protectionThe chances of having a lawsuit filed against you as a business owner or self employed person can be high, and it is therefore important to bear in mind that offshore asset protection strategies can be imperative to the livelihood of many people. Once a lawsuit has been filed, it is impossible to try to protect your wealth by moving it offshore, thus in this respect, going offshore provides additional preventative measures from risk of litigation.

In recent years, the urge to protect one’s assets in this manner has grown, as relying on onshore asset protection entities is no longer an option when it comes to the preservation of wealth.  In conjunction with the surrounding crisis and litigation risks, Panama offshore foundations stand as one of the most reliable asset protection strategies as they offer absolute control and ownership of foreign corporations.

Panama is historically one of the most favored global destinations for offshore foundation formation. It is regarded as one of the most attractive locations in the world for legitimate offshore investment, as it legally reduces tax liabilities and provides complete exemption from all taxes. With a solid reputation for providing financial stability, security, anonymity and confidentiality, thousands of foreign investors seek Panama’s offshore foundation services every year. As the sovereign debt crisis struggles to find stability, it is apparent that more and more investors are seeking Panama’s foundation services for the perpetuation of their wealth.

In order to be regarded as a legally operational entity a Panama foundation requires a founder, beneficiaries and a foundation council. Such structures are relatively straightforward to set up and are established for a variety of purposes, which are contained within the Foundation’s Charter. A foundation council is appointed to manage and administer the foundation in accordance with the founder’s wishes. At different intervals, the assets contained within the foundation – whether a portion or the entire amount, may be distributed to the beneficiaries.

A Panama foundation provides unsurpassed financial protection that is written into Panama law. This particular structure is a sophisticated estate planning vehicle that enables the avoidance of family disputes and forced heirship rules. It does not have specific owners, and all information pertaining to the foundation remains anonymous throughout its lifecycle.

Panama foundations are straightforward to maintain and do not require any auditing or accounting records. They are widely used as a way to effectively execute estate planning, as they possess two primary purposes: either to ensure the safe transition of assets to intended beneficiaries, or to enable clients to control and maintain ownership of foreign corporations.

Varieties

When combined with a Panama Anonymous Bearer Share Corporation, a Panama Foundation provides one of the most powerful and lucrative opportunities for conducting private business and enhancing identity protection. It provides the ultimate form of protection; as such structures permit complete anonymity of ownership and zero tax charges on offshore income, thus driving the Panamanian asset protection plan further across the globe. As an investor seeking either personal or corporate identity protection, a Panama Foundation established in combination with a Bearer Share Corporation offers ultimate protection of wealth in a corporation, with the added advantage of anonymous ownership of assets.

Panama foundation formation remains rife

In light of continued economic uncertainty across the globe, it is apparent that many individuals of a high-net-worth status continue to seek offshore strategies for the survival and preservation of their assets. As Panama provides utmost stability in an otherwise unstable climate, it is no surprise that an increasing number of wealthy investors are looking to Panama for the formation of offshore foundations, for the better protection of their assets.

 

 

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