The Private Interest Foundation in Panama can be established for the benefit of a person or several persons, a family or for a specific social purpose.

For Asset Protection:
Basically, private interest foundations are used by individuals or families who wish to protect their assets against kidnappings, liens, claims or potential legal conflicts. Article 11 of the Law of Private Interest Foundation says "For all legal purposes, the assets of the foundation shall constitute a separate patrimony from the personal assets of the founder. Therefore they cannot be sequestered, embargoed or subject to any precautionary action or measure, except for obligations incurred, or for damages caused by virtue of fulfilling the purposes and objectives of the foundation, on behalf of the legitimate rights of its beneficiaries. In no case shall the assets respond for personal obligations of the founder or of the beneficiaries. "
Also important to note that Article 15 of the Law of Private Interest Foundation says" The creditors of the founder or of a third party shall have the right to dispute the contributions or transfer of assets in favour of a foundation, when the transfer constitutes an act of fraud to the creditors. The rights and actions of such creditors shall prescribe three (3) years from the date of the contribution or transfer of the assets to the foundation. "

For the Family Heritage:
Many individuals and families in Panama and in the world use Panamanian private interest foundations for structuring the assets and property of the family, for testamentary purposes. The Founder or Protector can choose the beneficiaries, and they will receive the goods at the time of death of the Founder or Protector, free of taxes or other charges or legal processes. Article 12 of the Law of Private Foundation says that "foundations shall be irrevocable ..." which allows the private foundation irrevocably continue operating for several family generations, according to the signs and instructions of the Founder or Protector that sets in the Founding Regulation.

As a Holding of Goods:
A person can use a Panamanian private interest foundation as a holding for their bank accounts, brokerage accounts, real estate, securities, certificates of shares of corporations, or any other property or assets you have. Private interest foundations are used to structure the assets of a person or a family. The foundation allows you to concentrate control of the assets within a single legal entity, eliminating risks, and creating a platform of more personalized, efficient, and convenient control.
Instead of keeping the share certificates personally, or by bearer societies, one can set a Private Foundation in Panama, and place share certificates on behalf of the foundation. Therefore, the advantage of using the foundation as a shareholder of corporations is to remove the personal property and transfer title of the property on behalf of a legal entity, where the beneficiaries of the Foundation are kept private and anonymous. Thus, one person may evade their property but keep control over it through the foundation.

As Investment Instrument:
In general, Private Interest Foundations can not do usual business activities as a corporation does. However, from time to time they may carry out some commercial activities, providing that the profits from such activities are used for the purposes of the foundation. For example, a private foundation may engage in banking or investment activities such as investment of CDs, stocks, bonds, mutual funds, options, securities, etc., providing that the products from these activities are for the benefit of the beneficiaries of the foundation.
Article 3 of the Law of Private Foundations says that "Private foundations shall not be for profit. However, they may carry out mercantile activities in a non-habitual manner or exercise the rights deriving from titles representing the capital of mercantile corporations that make up the patrimony of the foundation, provided that the economic results or proceeds of such activities be dedicated exclusively for the purposes of the Foundation." This means that the private interest foundation can buy and sell assets such as real estate, stocks, bonds, or purchase and / or sell any kind of goods and assets.

For Funds Transfer:
Foundations offer additional benefits, not just a property. For example, the foundation can be used to transfer funds abroad, or receive foreign funds. In some cases, people use foundations as instruments for these purposes. Some people donate their funds to their foundations and then use the Foundation to give educational or special grants to their children, grandchildren, etc. The advantage here is that the tax regulations that revolve around donations, where some governments impose "gift taxes" and require comprehensive reports, are avoided. However, it is important to clarify that the tax code does not allow use of Panama grants to Panama Private Interest Foundations, as expenses for purposes of deductions from income taxes (local revenue) in Panama.