About its Foundation Council.

A body known as the Foundation Council (equivalent to a Board of Directors in a corporation) shall be appointed in a Panama Private Interest Foundation. The Foundation Council shall be selected at the time of incorporation, and it shall be formed by no less than three (3) members in the case of persons or only one (1) member in the case of a corporate entity. It is not required for any of its members to be Panamanian.
The Foundation Council’s powers and responsibilities will be delimited on the Foundation Charter or in the Regulations to suit the wishes of the client/founder. As a general rule, the Foundation Council shall be responsible for carrying out the foundation’s objectives and administering the assets of the foundation according to its Charter or its Regulations.

Additionally, a founder might appoint himself as a member of the Foundation Council and require that certain decisions be taken by unanimity.

All such acts may need to be previously authorized by a protector or other supervisory body. Moreover, a founder may reserve for himself or any other person the right to remove the members of the Foundation Council. This disposition must also be expressly established in the Foundation Charter.

Protector and other Supervisory Bodies.

The founder may also establish other special arrangements to retain control or supervision over the foundation assets during his or her lifetime. The founder may appoint protectors, auditors, or other supervisory entities to supervise the acts of the Foundation Council prior to or after his/her death; article 25 of the Foundation law expressly authorizes the creation of such additional entities or supervisory bodies.

The figure of the protector has been widely used in Common Law jurisdictions when settling a trust. This is yet another innovation of the Panamanian law that further ensures the instrument’s safety and, thus, makes it even more attractive as an estate-planning instrument.