RSSBelow is a brief comparison and the basic difference between the Trust and Foundation.
| TRUSTS | FOUNDATIONS | |
| Legal Structure | Not a legal entity. Assets are held in the name of the Trustee and dealt with in accordance with the Trust Deed and Trust Law | Legal entity registered in Panama. Managed by a Foundation Council |
| Legal Ownership | Assets owned by a Trustee but held for the benefit of the beneficiaries | Assets owned by the Foundation |
| Application of Laws | Considerable regulations both in respect of statute and case law | Limited case law |
| Documentation | Trust Deed executed on creation, sets out terms of trust during its lifetime. Discretionary Trustees usually require the Settlor to give them a Letter of Wishes, but this is not a legal document. Documentation usually in English. | Statutes, which can be in any language. Founders wishes can be set out in Regulations which is a legal document. The Founder can thereafter have legal rights to instruct the Foundation Council |
| Disclosure to Third Parties | None. Trust is a private agreement between Settlor and Trustee | Statutes are filed in Panama Registry but normally a Nominee Founder is used so that the client’s name is not disclosed. Regulations are internal documents, which are not filed at the Registry. |
| Mobility | Trusts can move to any jurisdiction where trusts are recognized by Law | Panamanian Foundations can move to any jurisdiction where Foundations are recognized by Law. |
| Protectors | Protector may be appointed with whom the Trustees must consult before exercising certain powers under the Trust | Curator may be appointed with such powers as the Founder wishes |
| Asset Management | Trustee is legally responsible for the management of the assets and therefore no proxy can be given to the Settlor or Beneficiary | Proxy is possible although we try to dissuade clients away from this if possible |
| Restriction on Investment | No restriction. Any investment which is in the interest of the beneficiaries | Investment holding only, no commercial activities are permitted but can be carried out through a wholly owned company |
| Rights of Beneficiaries to Obtain Information | Beneficiaries who receive a distribution have certain rights in some jurisdictions | Limited to the extent of qualification of Beneficiary |
| Duration | Usually limited to a maximum of 100 years | Unlimited |
| Minimum capital | Any | US$10,000 |
| Taxation | Nil in most offshore jurisdictions | US$150 per annum |
| Liquidation | According to Trust Deed and Trust Laws | According to Regulations |
Source Courtesy : IMTS-INC.NET
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