Many people do not understand the difference between an "offshore foundation", "offshore corporation" and an "offshore trust".
An offshore foundation is used to manage and control assets. This is accomplished through a secret letter of wishes. This letter is, as it's name implies, a private document that is not available to the public. Under no circumstances, is this letter ever required to be made public and is protected by Panama law.
The world has gone tax crazy. Political instability and continuous wars will not be the downfall of civilized countries. Indeed, I propose, that over taxation will be the downfall of the civilized world. Taxes always go up and never down. There is a breaking point. The individual, however, needs a solution today. An offshore foundation is the perfect solution. In addition to being a strong asset protection structure, an offshore foundation can be used to legally bypass estate taxes in the event of a death.
Who can own a foundation under Panama law? Nobody. That's right. A Panama foundation cannot be legally owned by anyone. It is it's own entity. This one aspect makes it a very powerful asset protection vehicle. Also a foundation carries respect that a simple, anonymous bearer share corporation (also available in Panama) does not get. This is important sometimes, when entering into contracts with other companies or opening bank accounts in some (but certainly not all) jurisdictions.
One of the greatest features of an offshore foundation is that a judge or court cannot order funds to be repatriated because a foundation is not owned by anyone. The order would be illegal and no judge would make an illegal order, and if he did, it would easily be overturned.
There is some confusion about the difference between a foundation and a corporation. A foundation's purpose is to manage funds while a corporation's purpose is to engage in business activities. It is illegal for a foundation to engage in for profit business activities. For this reason, most asset protection packages include a corporation owned by a foundation. This affords all the added security of a foundation and all the flexibility of an offshore company.
Unlike onshore trusts, which are commonly used in estate planning, an offshore foundation is strictly enforced by Panama courts. In the event of death, family members will not be entering into litigation to try and break the foundation. It is common for an onshore trust to be broken for any number of different reasons. If you want your wishes followed to the "letter" then a Panama foundation is your best option.
Foundations do not pay tax on funds generated outside of Panama. This makes a foundaton a great part of any tax planning strategy.
