Panama Foundation
The Panama Foundation has become a popular alternative to the Cayman Foundation.
Overview
The Panama Foundation is a popular choice for managing crypto projects who prefer a civil law system.
Use Cases
Crypto Project Treasury and Governance
The Panama Foundation is a great setup for a founderless and memberless vehicle. This foundation can be governed by onchain voting and with the power to make grants. The DeFi package will structure your Panama Foundation with a Supervisory Board and a constitution to allow the foundation will be DAO controlled.
Asset Protection
The Panama Foundation also lends itself very well for asset protection as it provides ultimate asset protection from the civil law. While a trust is a tried and trusted vehicle in common law jurisdictions, the Panama Foundation is a great option if you prefer a civil law setup. This package provides a Nominee Director and a KYC/AML kit to let us assist with opening a bank account and an exchange account for you to have a fully functional setup.
Tax status
Panama has no taxes on foreign sources income. This means that any income made by the foundation won't be taxable.
Privacy
Similar to other jurisdiction, the directors of the Panama Foundation are part of the public record. Beneficiaries are not public.
Onboarding
Setting up a Panama Foundation involves KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures as part of the due diligence process. For this we will need to know some information regarding the new company as well as a KYC and KYB check for all natural and corporate participants.
The following documents are required:
| KYC Documents | KYB Documents |
|---|---|
| Certified Copy of Photo ID | Certificate of Formation |
| Certified Copy of 2nd Photo ID | Register of Directors |
| Certified Proof of Address | Register of Members |
| Professional Reference | Share Certificates |
| Resume that is up to date | M&AA |
| Source of Wealth declaration | Consent to act as Director |
Online Form
After the Panama Foundation is ordered you will receive a link to login to the Otonomos Dashboard. When you enter the dashboard you can start filling out the company application form to stage your company. In the company application form we will ask information about the new company. The following information will be requested:
- Company Name Options
- Purpose of the entity
- Country
- Source of Funds
- Financial Year End
- Legal Opinion (optional)
- Org Chart (optional)
- Nominee Participants (if applicable)
- Corporate Participants (if applicable)
- Natural Participants
- Estimated Revenue
- Corporate Participant Information
Required roles in the Panama Foundation
The following roles will need to be filled in the Panama Foundation
- Directors
- Treasurer
- President
- Secretary
- Senior Managing Official
The treasurer, president and secretary are combined roles of the director(s). If there is a corporate director, there will only be 1 director required. This corporate director will then take the roles of treasurer, president and secretary as well.
If there is no corporate director, there will be 3 "natural" directors required. Each of the director will take on one of the additional roles. Meaning, there is 1 director and treasurer, 1 director and president and 1 director and secretary.
It is therefore highly recommendable to appoint a corporate director. If needed, you can also hire a Nominee Director from Otonomos.
Once this is all declared, you move on to the KYC verification process.
KYC Verification Process
The KYC Verification process is very straight forward and smooth thanks to our friends at SumSub. After submitting the online form with all the new company information all natural participants will receive a KYC invitation to upload the needed documents along with the required information.
Read more on how to use SumSub here.
Entity Maintenance
Renewal Periods
Panama Foundations have two renewal periods each year:
1st Semester: Foundations registered between January and June need to renew by July 15th.
2nd Semester: Foundations registered between July and December need to renew by January 15th.
To maintain your Panama Foundation’s good standing, ensure timely renewal payments to avoid penalties.
Reporting
It is mandatory to file yearly financial statements in Panama. These statements must be submitted with the renewal of your entity to ensure the renewal process is completed smoothly.
Shutting down your entity
Company Dissolution: To properly close down the entity, you should file for company dissolution. This ensures that the entity is shut down correctly without any loose ends.
Company Strike Off: Alternatively, an entity can be struck off if it fails to pay renewal fees or submit the required statements. This process is less formal and occurs when the entity does not meet compliance requirements.
Updated 9 days ago