Foundations do not pay taxes on any income that is derived from investment activity outside of Panama. Because foreign entities are not liable for capital gains on United States investments, Foundations represent a way in which to invest that will avoid taxes in all jurisdictions. Assets used to fund the Foundation are considered under the law to be separate from the assets of the founder. Therefore these 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 never suffer liability of any kind. A Private Interest Foundation endures perpetually. 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 be domicile in Panama, but continue its existence elsewhere.