A legal entity constituted by one or more natural or legal persons, whose assets must be destined exclusively to the objectives or purposes expressly set forth in the founding charter. The initial patrimony may be increased by the creator of the foundation (founder), or by any other person.
Private interest foundations are governed by the foundation charter and its regulations, as well as by the provisions of Law 25 of 1995 and other applicable legal or regulatory provisions. The precepts of Title II of Book I of the Civil Code (of legal persons) do not apply to these foundations.
Private interest foundations may not pursue profit-making purposes (not to be confused with non-profit organizations). However, they may carry out commercial activities on a non-habitual basis, or exercise the rights arising from the securities representing the capital of commercial companies that are part of the assets of the foundation, provided that the economic result or product of such activities is exclusively dedicated to the purposes of the foundation.
Private interest foundations may be constituted to take effect, from the moment of their creation or after the death of their founder, by any of the following methods:
1) By means of a private document subscribed by the founder, whose signature must be authenticated by notary public of the place of its incorporation.
2) Directly before a notary public of the place of its incorporation.
In case the foundation is created, whether by public or private document, in order for it to take effect after the death of the founder, the formalities foreseen for the granting of the will are not required.
The foundational act is notarized by public deed and must be submitted for registration in the Private Interest Foundations section of the Public Registry of Panama.
The registration of the foundational act in the Public Registry grants the foundation legal personality without the need of any other legal or administrative authorization. The inscription in the Public Registry also constitutes a means of publicity before third parties.