When trying to create a foundation to protect your assets, make sure you know about the little rules and regulations that are demanded by the Panamanian government. This article will help you sidestep small issues to ensure that your asset protection goes as smoothly as possible.

A very important rule to remember is that a foundation cannot act like a business. In other words, unlike a corporation, you cannot use the foundation as a front for your business back at home and use it to make you extra money not using assets owned by the foundation. You can, however, own multiple corporations with a foundation that can do this sort of work for you. The foundation as a whole, however, usually serves to protect the assets and interest of the protector and beneficiaries, which normally from the beginning are you. That means that while the foundation can sell off assets such as artwork and jewelry, it cannot sell consumer goods to retail stores across the United States like a corporation can. You can join the foundation as a manager of investments if you wish to oversee how your assets are being used.

The most important document that you will use in a foundation is the letter of instructions. Much like the name indicates, this letter is basically a set of written commands you give to those who will be in charge of your assets. Remember that as the protector, if that is indeed you, you and only you have the right to say how and where all of your assets are used. This letter always you to do so in the most discrete of manners. The letter will also deal with issues on what to do in case you were to pass away and whether or not the foundation should continue to function after your death. You can keep the letter of instructions private and only show it to those who need to see it to properly maintain your assets and protect them.

Finally, since you already have a letter of instruction you do not need to have by-laws to  base your foundation on as foundations in America would need to have. You can, if you wish, write up by-laws, however, and have it signed by an attorney or Panama official to make it legal and official. If you do end up using by-laws, they will serve in the same capacity as the aforementioned letter would. It would mention what and how to use assets, who to pass them onto if you die, how long to keep the foundation running in general and so forth. By-laws can be changed at any time, but only be the current protector of the assets. On a final note, like the letter of instruction, by-laws can be kept secret so no one knows that you are involved with the foundation.