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.

A foundation can be used much like a trust to pass on assets bypassing estate taxes at the time of death. Many countries have made death a taxable event. This makes absolutely no sense of course and every person should consider an offshore foundation (or offshore trust) to protect their assets.

In Panama an offshore foundation is not owned by anyone. In fact it cannot be owned according to Panama law. A foundation can own a bank account and corporation. A foundation / corporation combination is the most respected anonymous offshore asset protection existing today.

The reason an offshore foundation should be part of any bullet proof asset protection structure, is because an offshore foundation is not owned by anyone. This makes a judgment against it impossible. How would an onshore court order anyone to return the funds from a foundation back onshore. He simply can't because it is illegal for a court to order you to return the funds. The funds belong to a foundation and you CANNOT own it because a foundation is not owned by anyone.

Corporation? Foundation? What's the difference? -- There are many differences including the fact that a foundation's purpose is not to engage in "for profit" activities. The purpose of an offshore corporation, on the other hand, is just that, to engage in business activities. The core difference, is that a foundation cannot legally enter into for profit activities. It can, however, own a corporation, which can in turn operate in a business environment to make money. The most secure asset protection structure today is the offshore foundation - offshore corporation package.

Your death should not be the cause of a in-family fight, but all to often this is the case. One child tries to overturn your onshore trust to get control of your assets. Your wishes get trampled on as a sympathetic judge overturns your wishes. An Panama foundation, on the other hand, is rock solid. It cannot be broken. Panama courts time and again have upheld the "letter of wishes" over any kind of legal challenge. This prevents the fighting before it starts. Also it is too expensive to carry on a legal battle in a foreign place. This is a strong deterrent as well.

The foundation is unique because it cannot be owned by anyone and it does not pay taxes on any funds it holds (as long as the funds are not generated by business in Panama -- ie. You cannot open a bakery in Panama and not pay taxes using this vehicle.) All money that is not generated in Panama is held tax free which makes it the perfect part of any tax plan.