Investment Funds in Panama in 2023
Panama is one of the most attractive countries for creating an investment fund. Not only does it offer favorable conditions and incentives, but it also protects investors' assets by offering effective tools. And the creation of an investment fund in Panama in 2023 plays an important role here.
What is an Investment Fund in Panama
An Investment Fund (IF) is a contract by which the owners of assets transfer them to the entity that manages them. In return, they receive shares or investment certificates that validate the contribution. This money is put into a common pot, after which the manager works with it to make a profit.
This arrangement allows investors to get a higher return as if the money were on deposit. It also protects investors' assets from raider attacks as they settle out of the former owners.
IF Panama and the courts
Plaintiffs can assert their rights before the defendant's assets hit the Investment Fund. After that, the claims will be dismissed, even when the money leaves the fund, back to the defendant. In theory, plaintiffs have three years to assert their rights after the IF is created. In practice, procedurally, it isn't easy to arrange. As for the defendant, the assets are sort of separated from the defendant and its obligations, but control of the money remains.
Other advantages of a Panama IF
- IF allows you to maintain complete confidentiality about the ownership of assets through the nominee founders.
- There is no income tax on external profits.
- No currency controls, reporting requirements, or annual audits are required.
- Documentation in any language.
- Contracts can be signed without using the Foundation seal.
- Inheritance sharing - allows heirs to avoid claims from claimants entitled by law to a share, if the founder does not want to give it away. Assets will be received only by people whose names are indicated in the papers by the creator of IF.
Panama ensures a high level of protection of information about the owners of assets. The public can only see the Articles of Association, which lists the founders and board members. Other things (profits, its distribution, secret papers) are not publicly available. For disclosure of confidential information - prison or a fine of $50,000).
Types of Investment Funds in Panama
Panama has the following types of IF:
Public funds are IFs registered with the Securities Market Authority (SSM). This must be done if at least one of the conditions is met:
- A Panama resident has to be appointed as manager or custodian;
- The investment fund publicly offers its shares;
- Panama has the minimum number of directors required to make a corporate decision.
Private funds (PIF)
A private entity is more convenient for foreigners to open as an investment fund in Panama in 2023. Here is the list of the fundamental conditions:
- The number of quota holders must be at most 50 or 20 participants (depending on the type of fund - PIF50 or PIF20).
- All offers must be made through private communications rather than through public media.
- Quotas must be offered to professional investors whose contribution exceeds $100,000.
- A PIF must have a legal representative in Panama. It can be a broker, bank, accounting firm, lawyer, and other qualified entities.
PIF50 may not be registered with SSM, but the Office must be notified that all conditions required by law have been met. It is obligatory to submit copies of incorporation documents, the Certificate of the Board of Directors on fulfilled obligations, and some other papers.
As for PIF20, the SSM does not need to register it either. The structure has several exemptions, including permits not to hire an auditor, an authorized custodian, or an investment manager.
How to open an IF in Panama
Contact IT-OFFSHORE experts to register an investment fund in Panama in 2023.