The Panama Crypto Foundation:
Everything you should know
This article explores why Panamanian foundations are uniquely suited for DAOs, their regulatory advantages, and provides real-world practical cases for Web3 builders
As DAOs evolve, their legal recognition and structure remain a challenge in many jurisdictions. One solution gaining traction is the use of Panamanian foundations to legally "wrap" DAOs, offering a flexible, compliant, and robust framework for their operation.
Without a legal wrapper, DAOs lack formal recognition under most jurisdictions, creating obstacles such as:
Legal wrappers, such as Panamanian foundations, provide DAOs with a formalized structure, enabling them to interact seamlessly with traditional legal and financial systems while mitigating risks for their members.
Understanding Panamanian Foundations
A Panamanian foundation is a legal entity that blends elements of a trust and a corporation. Unlike corporations, foundations do not have shareholders; instead, they are established for a specific purpose, with assets managed independently of the founder’s personal holdings. Foundations are overseen by a council, similar to a board of directors, and can hold assets, enter into agreements, and manage funds—making them an ideal legal wrapper for DAOs.
Regulatory Advantages of Panamanian Foundations for DAOs
5. Confidentiality - Panama’s legal framework ensures a high level of confidentiality, protecting the identities of founders and beneficiaries—a valuable feature for DAOs with diverse, privacy-conscious memberships.
Practical Cases: Panamanian Foundations as DAO Wrappers
Setting Up a Panama Foundation
When compared to other jurisdictions like BVI, Cayman or Switzerland which are well-known destinations, establishing a Panama Foundation is quite reasonable including nominee directors, depending on the level of exposure and liability. We recommend clients to contact us for further information.
Setting up a Panamanian foundation for a DAO involves several key steps:
Since Panama still has no crypto regulatory framework, projects do not require legal opinions, which means that we can set up a Panama foundation in 1-2 weeks after we receive the complete KYC, the foundation will be ready for business.
Setting Up a Panama Triangle
A Panamanian special purpose crypto legal structure usually includes 3 entities.
1. Foundation - a Panama private foundation.
2. NFT or Token - a Panama corporation
3. Front-End - Another Panama corporation
We directly can set up the Foundation, Token and Front-End subsidiary companies in Panama or in jurisdictions such as BVI, Cayman, Nevis, Delaware and of course Panama. We provide full incorporation services in these jurisdictions.
Panamanian Foundations provide a Robust Framework:
Challenges and Considerations
While Panamanian foundations offer significant advantages, there are considerations to keep in mind:
Conclusion
Panamanian foundations present a compelling solution for DAOs seeking a legal wrapper to enhance operational efficiency, legal compliance, and member protection.
With their unique blend of flexibility, asset protection, and global recognition, these structures are poised to become the go-to choice for DAOs navigating the complexities of a hybrid digital-legal landscape. By leveraging Panamanian foundations, DAOs can focus on their core mission—whether that’s innovating in blockchain, managing decentralized communities, or driving social change—without being constrained by traditional legal hurdles.
How Pardini & Asociados can help you.
Pardini & Asociados has 40 plus years of experience specializing in Private Clients. We are the direct provider, and we offer bespoke services leveraging structures such as Companies and Foundations in multiple jurisdictions such as Panama, BVI, Nevis, Cayman, Belize, Seychelles and Delaware.
Pardini & Asociados is a leader in Private Client in Panama, including Wealth Protection, Fiduciary Services, Family Offices and Corporate Services. The firm acts as legal counsel on domestic and international tax matters, litigation, establish trusts, foundations or funds, family offices and carry out corporate and real estate deals. We provide them with tax planning, special purpose vehicles, banking, tax services and more.
When you combine P&A´s multidisciplinary Private Client and Cryptocurrency teams, P&A is uniquely positioned to advise clients on the legal and transactional issues involving multiple areas.
Our cryptocurrency and blockchain lawyers advise clients on issues related to:
By Juan F. Pardini Jr.
Paris, France
For more information, please contact us.
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