Panama Private Foundation VS. Seychelles Foundation

This article compares Panama Private Foundation vs Seychelles Foundation.

• An offshore foundation company is a distinct legal entity that is often governed by civil law.
• Investors or individuals are absent from an offshore foundation firm.
• As the company was founded outside of the founder’s home country, it is referred to as an “offshore” business.
• The individual who establishes the entity is known as the founder.
• Their desires are recorded in a document referred to as a “Contract.”
• A founder might be present in the majority of offshore foundation firms.
• An individual or business can be a founder.

The foundation committee is made up of people who carry out the charter’s stated objective for the organisation. 

As a result, they distribute and manage assets, approve contracts, and make investments for the foundation. Members of the council are obligated to act in the foundation’s best interests.

SEYCHELLES FOUNDATION

A Seychelles Foundation may be a private or family foundation. The different kinds of foundations are governed under the Seychelles Foundation Act of 2009. Outsiders have the power to both direct and influence their foundations.

A Seychelles foundation is not identical to Seychelles IBC. Refer to Seychelles company formation for more information. 

A Seychelles foundation offers many of the benefits offered in other countries, such as Panama, but also grants additional rights, such as the founder’s ability to divide his or her privileges. 

Seychelles is a perfect jurisdiction to design specific foundations, including charitable, private interests, family, asset assurance, and explicit goals, because of the broad range of foundation types and uses.

Assets shifted to the foundation become the foundation’s sole property because the foundation is a distinct legal entity. This frees the founder of any implied liability for his or her prior assets.

The foundation and its assets are not seen as belonging to the beneficiaries. Consequently, the beneficiaries have no legal or beneficial authority over the foundation’s assets.

PANAMA PRIVATE FOUNDATION

A Panama Private Foundation differs from a standard foundation in a number of ways. Private patrimony foundations for families were created by Panama Foundation Law, Law 25 of 1995.

This rule was designed to be an inheritance instrument to preserve a family’s wealth for a number of generations. A Panama Private Foundation is not a firm, association, organization, or any of these due to its purpose.

However, it is a separate legal component that is specific to Panama and does not engage in dynamic enterprises (passive revenue is permitted). Corporate CEOs, corporate shares, and corporation authorities don’t exist.

There are no owners of the entities, such as shareholders, partners, individuals, or members. Its only goal is to benefit one particular set of people.

BACKGROUNDS

Costa Rica, Colombia, and Panama are all located in Central America. It is one of the rare countries that is surrounded by both the Atlantic and Pacific oceans.  It is formally known as the “Republic of Panama.”

The largest country’s capital, Panama City, is home to about 50% of the country’s citizens inside its metropolitan area. Its political system is a unitary presidential protected republic in which the National Assembly, a council, and the president are democratically elected every five years.

In the Indian Ocean, near Madagascar, there are 115 islands that form the Republic of Seychelles. In 1976, it formally declared its independence from the United Kingdom. Its political system is portrayed as a unitary presidential republic with a president and national assembly that are both elected.

THE DIFFERENCE BETWEEN PANAMA PRIVATE FOUNDATION AND SEYCHELLES FOUNDATION

Registration

A Panama foundation can be set up and registered in a single day.

The Financial Services Authority Seychelles (FSA), which registers the reports and issues a declaration verifying the legal incorporation, will receive the foundation’s Charter and its Regulations that the authorized International Foundation Services Provider recorded on behalf of the Seychelles Foundation.

Registered office and agent

Each Panama Private Foundation is required to choose a registered agent and maintain a registered office address.

Each foundation in Seychelles must arrange for an authorized International Foundation Services Provider to act as the registered agent in accordance with the International Corporate Service Providers Act, 2003. 

In addition, Seychelles foundations are required to maintain a registered office address in Seychelles, which may also serve as the address of a registered agent.

Accounting

A Panama foundation is not required to maintain business books or accounting records. It is suggested, however, that an accounting framework be used to keep track of meetings, expenses, and salaries for the Founder, the Beneficiaries, and the Protector to inspect.

On the other hand, the Seychelles Foundation is obligated to follow internationally recognized accounting standards, account books, and documents demonstrating the actual financial status.

Annual meetings

Both foundations are not required to hold annual meetings.

Tax-exempt

A private foundation registered in Panama pays no corporation taxes, annual taxes, or other taxes. Similarly, Seychelles does not impose any taxes on its foundations.

Taxpayers in the US and other countries that tax worldwide income are required to report all income to their respective tax authorities.

Privacy

The Founder, Protector, or Beneficiary of Panama foundations are not identified in any public records or listed with the government. Since the Council members are the most prominent names found in public records, nominees may be chosen to ensure their protection.

A candidate Founder may sign the Foundation Charter with respect to the Seychelles Foundation. Furthermore, the Foundation’s Rules are not required to be filed with the Registrar or any other government agency.

Asset Insurance

A Panama Foundation provides total asset security for all countries. The foundation operates as a holding company, claiming all assets and protecting them from choices made by external banks and foreign creditors.

Land, bank accounts, money market funds, securities, objects, business shares, earnings, protections, etc., can all be owned by Panama foundations. According to Panamanian law, foundation-owned assets are not subject to court orders or seizures by foreign governments.

Seychelles foundations are separate legal entities that hold all of the assets and protect the Founder and Beneficiary from them. The loan bosses of the founder are not permitted to retain any of the foundation’s assets.

Shelf foundations

On account of the Panama Foundation, shelf foundations are available for purchase to extend the registration cycle.

Due to the Seychelles Foundation’s exclusivity, shelf foundations are not available for purchase.

Public Records

The names of the Founder, Protector, or Beneficiary are not listed in the public registry records of Panama. The only names listed are those of the Council members who are eligible to be candidates for extra security.

The founder’s name must be on the charter of the Seychelles foundation, which must be filed with the Registrar. Several foundations use a nominee founder’s name in the charter to protect the first founder because this is the only document with the founder’s name listed in the public records.

TABLE COMPARING PANAMA PRIVATE FOUNDATION VS SEYCHELLES FOUNDATION

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