The range of benefits offered by a Foundation spans from local tax advantages to asset protection. Foundations do not pay taxes on any income that is derived from investment activity outside of Panama. Also of note in assessing the benefits of the Panamanian Foundation, is the American exemption of foreign entities from capital gains earned in the United States markets. Assets used to fund the Foundation are considered under the law to be separate from the assets of the Founder, and therefore cannot be reached in the event of a lawsuit against the Founder or beneficiaries. Similarly, these assets cannot be reached to satisfy debts owed by the Founder or beneficiaries.
Foundations only incur liability to the extent that they have dealt with a party directly.
Therefore, if a Foundation conducts no activity beyond owning assets, it will not suffer liability of any kind. The life of a Panamanian Private Interest Foundation is perpetual. Foundations are irrevocable except when the Memorandum of Foundation expressly provides for revocation or, when the Memorandum has not been filed at the Public Registry. Foundations enjoy the trait of being able to relocate. This means that, subject to the laws of the host jurisdiction, a Panamanian Foundation of Private Interest may cease to domicile in Panama, but continue its existence elsewhere.