Lombardi Aguilar Group is a leading international business law firm in Panama. The attorneys at Lombardi Aguilar Group provide its clients fast, innovative and effective solutions to their business challenges. The firm provides services to individual and corporate clients in Panama as well in the Americas, Europe and Asia. Its partners maintain a commitment to professional ethics and social responsibility by participating in the board of directors of groups such as the Panama Bar Association, the Alliance Francaise, the German Chamber of Commerce Association, the American Chamber of Commerce (AMCHAM) of Panama and the Association of Chinese-Panamanian Professionals (APROCHIPA).

The firm centers its law practice in private client services and asset protection (Private Interest Foundations, Trusts), business and enterprise structures (Offshore and international business corporations), tax planning and consulting, real estate and e-commerce. We also advise in areas Corporate and Commercial Law, Intellectual Property, Maritime Law, and Immigration Law as well as related litigation that may arise from our client activities.

Lombardi Aguilar Group (formerly called Lombardi Aguilar & Garcia) is part of international network of professionals that allows the firm to take care of every problem of our clients in an expedited and confidential manner. It is also a member of Praelegal, an international global network of independently-owned law firms in more than 100 countries. The firm has its main office in Panama City, Panama, as well as a representative office in central Switzerland, and its affiliate in Belize City, Belize.

At Lombardi Aguilar Group we believe in a constant and direct communication with our clients, which allows us to anticipate what their needs and challenges are, in order to give them the most accurate and precise solutions in the shortest period of time.

The law firm conducts business in Spanish, English, French, German and Italian.

Aquilino de la Guardia Str., Ocean Plaza Bldg., 12th Floor, Panama City, Republic of PanamaTel. +507 340-6444 – Fax: +507 340-6446 – P.O.Box 0831-1110 – E-mail: info @ laglex.com

Lombardi Aguilar Group is a civil law partnership registered in the Republic of Panama under number SC-25029 and its members are supervised by the Panama Bar Association

http://www.laglex.com

DR. JORGE G. LOMBARDI DUTARI. Partner.

Graduated in 1995 from the University Santa Maria La Antigua as Licentiate in Law and Political Science. His thesis was entitled “la undue influence como vicio del consentimiento en el derecho civil panameño. Ensayo de una teoría general.” Admitted to the Bar in 1995. Diplôme supérieur d’université (troisième cycle), Droit Civil, Obligations, University of París, 1997. Diplôme d’études doctorales, University of París 2000, mention très bien, thesis : « La responsabilité des tiers complices dans la rupture d’une obligation contractuelle dans le droit panaméen ».

As attorney, Dr. Lombardi has worked in the areas of litigation, labor law, public procurement law, civil law, international business transactions, and corporate law matters in general.

Among said transactions are serving as:• Counsel for a large German architect and engineering firm awarded a $105 million contract for construction of a second bridge in Panama.• Counsel for multinational Spanish banking institution in a multi-million dollar litigation. • Counsel for US multinational banking institution in enforcement in Panama of a US court decision on Panama assets.

He served as Vice president of the Association of Law Students, University Santa María La Antigua in 1994 and as President of Association of Students, Robert Garric, Cité Internationale Universitaire de Paris during 1997-1998. Dr. Lombardi was Professor of Civil Law in the post graduate Program of the University of Panama in 2001 and currently is Professor of International Contracts, Post graduate and doctorate program, University Santa María La Antigua, from 2004 to present. He serves as Vice president of the French Alliance in Panama starting in 2002 to present. Dr. Lombardi is Comptroller of the Board of Directors of the German Panamanian Chamber of

Commerce, 2002 to present. He also served as Spokesman and member of the Board of Directors of the Panama Bar Association, 2003-2005 and 2005-2007.

He is the author of:* “Les droits des minorités en droit panaméen”. Association Henri Capitant, Journées Mexicaines, 2004.* “La responsabilidad del hecho de la cosa en el derecho panameño.” Revista Lex. 2001.* Panama Chapter on Labor, Commercial, Civil, Procedure and Company Law. E-iure, Compendium. 2003- 2004.* Panamanian Health and Medications Registry. Martinadale-Hubbell. 2001-2004.

Certified Public Translator in Panama from Spanish to English, French, German, Italian and vice versa. Paralegal in one of the biggest law firms in Panama (1990-1994), associate lawyer of the same firm (2000-2005). Member of the National Bar Association.

Languages: Spanish, English, French, German and Italian.

Areas of practice: Offshore Structures, Private Interest Foundations, Offshore Services, Immigration Law, Trademarks, Yacht and Vessel Registration, Sanitary Permits, Corporate Law, Civil and Commercial litigation, Labor Law.

E-mail: jlombardi @laglex .com.

ALVARO JAVIER AGUILAR ALFU. (TEP)Partner

Graduated in 1991 from the University Santa Maria La Antigua as Licentiate in Law and Political Science, Mr. Aguilar earned in 1992 a masters degree (LL.M.) in International Legal Studies with concentration in International Trade and Banking, at the Washington College of Law, The American University. In addition, he took courses in International Corporate Law at Widener University / Université de Geneve, Switzerland.

After working as legal assistant with Panama business law firm, Mr. Aguilar served as administrative intern of the Administrative Tribunal of the Organization of American States in Washington, D.C. He later worked as attorney with a Panama commercial law firm.

As attorney, Mr. Aguilar has worked in the drafting of commercial, mortgage and banking contracts; negotiation and drafting of joint venture and real estate agreements; conducting of due diligence research for transactions; provided legal advice for privatisations and international business and corporate law matters in general. Among said transactions are serving as:

• Lead Panama attorney in real estate and tax matters for the US$15 million purchase by a Panama subsidiary of publicly-held PriceSmart (PSMT) hypermarket of their properties in El Dorado and Via Brazil, of which $12.5 million were financed by a California-chartered LLC • Panama tax attorney in the US$500 million purchase by GE Consumer Finance of a 49.99% stake in BAC International Bank Inc. (BAC), one of the largest banks in Central America. • Lead attorney for local sellers in the sale of Bella Vista land for US$6 million to a joint Panama-US joint venture, which included the settlement of several outstanding property tax issues with the authorities. • Counsel for developer in drafting of condo by-laws of the US$41 million Panama World Trade Center - the largest commercial and office center in the banking area of the city, which includes specific rules for the hotel (now Sheraton Four Points), business and store areas to take advantage of tourism law tax incentives and preserve quality of tenants. • Counsel for Minnesota real estate consultants designing gated community in rural mountain zone of Cerro Azul.• Lead attorney for US investors acting as creditors of a $23 million claim against an estate in Panama probate litigation.

Mr. Aguilar advises clients in Europe and the Americas on asset protection matters, using the advantages provide by corporations, trusts and private interest foundations in

Panama, British Virgin Islands and other jurisdictions. Said advice is provided in communication with the client and with strict attention to the needs for confidentiality and time/cost efficiency.

In novel areas of Law, Mr. Aguilar is involved in negotiation and drafting of software licensing agreements for businesses and advises information technology start-ups which use the advantages of Panama legislation in call centers and electronic transfer of funds. He has also made presentations on Tax Aspects of Transactions on the Internet. Mr. Aguilar is also involved in trademark, patent and copyright litigation and registration procedures, as well as coordination of trademark registrations throughout Latin America.

Mr. Aguilar served as Secretary of International Relations of the Board of Directors of the Panama Bar Association, which allowed him to serve as one of the representatives of the Bar advising the Panamanian government in the negotiations of the Services and Investment chapters of the Free Trade Agreement with the United States. He also represented said group in the Commission drafting regulations to the 2005 Tax Reform. Currently he serves as Chair of the Commission of Foreign Trade and International Relations of said Association.

He is chair of the Trade & Investment Committee of the Panama American Chamber of Commerce (AMCHAM), where he has served as member of its Board of Directors, Legislation & Taxation, and chaired its Information Technology Committee. Mr. Aguilar is a founding member and Vice-President of the Panamanian Association of Law and New Technologies (APANDETEC), formed by attorneys who specialize in Tech Law. He has represented his former firm before the International Lawyers Association and on a his personal time has served in the board of directors of the Association of Chinese-Panamanian Professionals (APROCHIPA) and several non-profit institutions. He has been a member of the International Bar Association and is currently full member of the Society of Trusts and Estates Practitioners (STEP).

Mr. Aguilar has delivered presentations on “Securitization: An Increasing and Safe Financing Technique in Emerging Markets”, and Estate Planning Trusts at the New York State Bar Association meetings in Santiago de Chile, Lima, Singapore and Panama. He is an associate (non-practising) member of the New York State Bar Association and its Latin American Council as well as Panama Country Co-Chair of its International Law & Practice Section.

He is the author of:* Enforcement of International Property Protection between Mexico and the United States (Fordham Intellectual Property, Media & Entertainment Law Journal, Vol. V, No. 1, 1994).* Panama Section of "International Intellectual Property Law" (John Wiley & Sons, 1995).

* Panama Section of "Int'l Taxation of Low-Tax Transactions" (BNAI, 1996).* Panama Section of "International Banking Law and Regulation" (Oceana, 2000).* Panama Section of "Legal Systems of the World" (ABC-Clio, 2002).* Panama Section of "Private Foundations World Survey" (Oxford University Press, 2013).* When Panama private foundations go to court (Trust and Trustees Journal, 2010).* Articles on Latin American business law in “Latin American Law and Business Report” , “Inter-American Trade Report”, “Trusts & Trustees”.and manages his blog http://www.alvaroaguilar.net on Panama legal news.

Mr. Aguilar's biography is included in the Corporate Tax section of Who's Who Legal 2006 and 2007 and Who's Who in the World. He has been selected by the Central American business publication CAPITAL FINANCIERO as one of the "40 under 40" as acknowledgement to his achievements as a young legal professional.

A Certified Public Translator in English and Spanish, Mr. Aguilar also speaks French and has an understanding of Portuguese.

Areas of Practice: Asset Protection; Banking Law; Business Law; Telecommunications Law; Offshore Company Law; Corporate Law; E-Commerce; Intellectual Property; International Business Law; International Finance; International Trade; Internet Law; Patents; Real Estate.

E-mail: aaguilar @laglex.com

GABRIEL AGUILAR PITTY.Partner

Born in the City of Panama, Republic of Panama, on December 28, 1965. Education University of Panama (Bachelor of Law and Political Science, 1987).

Attended seminars from the Industry of Protection of Cultivations of Guatemala and Costa Rica in the field of Health Registration. Currently he offers seminars on Regulatory Law and Industrial Property to lawyers in the region of Central America.

He is member of the Panamanian Association of Industrial Property Law, President of the Panamanian Association of Regulatory Law and the Panamanian Association of Pharmaceutical Manufacturers. He was President of the Insurance Law Commission of the National Bar Association from

2004 up to 2007, and he is member of said Commission, as well as Consultant of Crop-Life International.

He was the Representative of the National Association of Agricultural Raw Material - Distributors – ANDIA – in the field of Intellectual Property in the fourth annex of the negotiations on the Free Trade Treaty with the United States of America.

As a lawyer he has participated in processes related to Health Register issues representing important trademarks like Pepto Bismol, Regulador Gesteira, Cremastèn, Antiflu-Des, Old Spice, Miss Clairol, Helen Curtis, Cover Girl, Gillette, Max Factor, Roger Gallet, Neutrogena, Gastrigel, Pert Plus, Head & Shoulders, Uropen, Uroflox, Sar, Sábado Sensacional, CV Pharmacies, and others. He has also participated in Industrial Property processes, representing different famous trademarks.

He has offered legal consulting and service related to Regulatory Law to important firms such as Bayer CropSciences, Monsanto, Duwest, Dow Agrosciences, Pilarquim Corp., Procter & Gamble, Laboratorios Rigar, S.A., Laboratorios Rousell-Uclaf, The Wellcome Foundation, and others.

He is author of: -El Derecho Regulatorio en Panamá-Demandas de oposición en contra de solicitudes de registros de productos para laprotección de cultivo-Procedimiento para la obtenciòn del registro sanitario para productos farmacéuticos enPanamá-Derecho regulatorio y propiedad industrial en países de Centroamerica.Áreas de Práctica: Derecho Regulatorio, Propiedad Industrial, Derecho Corporativo,Asuntos Migratorios, Fundaciones de Interés Privado.

He speaks Spanish, English and Italian.

CARLOS EDUARDO ABREGO ESCALAAssociate

Mr Abrego has a strong educational base. His undergraduate and postgraduate studies where obtained in Panama city, Panama, including his Degree in Law and Political Science and a Specialization in Advanced Teaching from the University of Panama in 2008 and 2009 respectively. His cultural background has been influenced by Panama's cosmopolitan nature and convenient geographical position. He is also a member of the Panama bar association.

Asia has played an important part of Mr. Abrego's formation as he obtained his Master’s Degree in International Business Law from the National University of Singapore, taught in Singapore and Shanghai, China. As a result, Mr. Abrego has had direct contact with South and Eastern Asia, were he learned about

different cultures and languages that broaden his understanding of what Asia means to the world and the advantages of making strong and lasting connections supported by a reliable friendship.

As an author, Mr. Abrego published “A practical view of income tax allocation on double tax agreements based on the Panama-Singapore Double Tax Agreement” on the Latin American Regional Forum Newsletter of the International Bar Association (2011) and “La Compraventa Internacional en el Ámbito del Transporte Marítimo” (2008) as his thesis.

Thanks to this, Mr. Abrego has been able to apply all his academic and cultural skills to offer his clients the best possible service as an Associate Lawyer at the firm, where he joined with a vision of a globalized legal profession and always open for new business opportunities.

He speaks Spanish (native), English (fluent), and Mandarin (Conversational).

GUADALUPE MARTINEZ CASASForeign Legal Consultant

She was born in the city of Córdoba, Argentina, 1973, and graduated as a Lawyer from Universidad de Buenos Aires in 1998.

She continued post grade studies at Universidad Torcuato Di Tella “Master in Law & Economics” (2003) and at Universidad Latina de Panamá “Master in Finance & Banking” (2006-Currently). Also attended other courses: at Universidad de Buenos Aires “Postgrade in Bankruptcy” (1999) and at Asociación Iberoamericana de Resolución de Conflictos “Corporate Practice and Negotiation for Lawyers” ( 2001);

Mrs. Martinez-Casas served as a legal assistant in a Family Civil Court and later worked at Banco Tornquist in Private Banking. Following her graduation from law school, she began working in law firms in the areas of litigation and corporate law.

She was a professor of Civil and Commercial Obligations at Universidad de Buenos Aires during 1999-2001.

During 2003-2004, she worked as an ad honorem assistant at the Boston law firm of Riley & Esher, LLP (now Altman, Riley & Esher) in matters of bankruptcy and attended several courses at Harvard University.

After returning to Argentina in 2005, she formed the Association of Argentine Female Business Lawyers (ATENEA) -a non profit organization for corporate women lawyers, serving as its first President.

She worked for 6 years at the law firm of Llerena & Asociados Abogados in Buenos Aires, Argentina, as Senior Associate Lawyer. While at Llerena, Mrs Martínez-Casas was part of the legal team which successfully argued on behalf of a tennis player for an unprecedented decision whereby the Sport Arbitration Court (CAS) reduced a fine previously imposed on their client by the Professional Tennis Association (ATP).

Mrs Martínez-Casas moved to Panama where she began working as a foreign legal consultant in Argentine law.

CONTACT US

LOMBARDI AGUILAR GROUP

Incorporation and Management of Companies, Trusts and Foundations, Immigration, Real Estate, Tax, E-Commerce and Intellectual Property Law.

Tel: +507 340-6444 / 6445 Fax: +507 340-6446 / 270-2521 Mobile: +507 6638-8707Email: info @ laglex.com Y!Messenger/Skype aguilara_5389 Airmail address: P.O.Box 0831-01110, Panama 0831, Panama

Courier address: 47 & Aquilino de la Guardia St., Ocean Business Plaza, Panama City, Panama

For more information go to: http://www.laglex.com

International Offshore Services

Opening Offshore accounts

Once the corporation is registered it is recommendable to have a bank account opened overseas whether the objective is to protect assets or maintain confidentiality in international businesses. Lombardi Aguilar Group has a large network and well established relations with prime banks in financial centers such as Switzerland, Panama, Austria, Cyprus, Belize, and other countries.

Opening Investment accountsIf the client’s goal is to invest in foreign markets from an offshore jurisdiction, Panama presents advantages since income earned from said investments is not subject to Panama income tax. Lombardi Aguilar Group has contacts and business relations with the important brokerage firms in Panama, who manage investments in a professional manner.

Corporate debit cards

We refer clients to processors of international debit cards issued in the name of corporations and foundations. These cards allow loading of funds by bank transfer and their withdrawal from bank machines in 100 countries.

Nominee directors and shareholders

In order to enhance corporate transactions, Lombardi Aguilar Group offers its clients the service of nominee directors and shareholders who will act and carry out the company according to the instructions given by the client, such as the management of investment or banking accounts, execution of contracts or representation of foundations and corporations before government and private entities. Virtual officeLombardi Aguilar Group offers international clients a complete virtual office service, which includes telephone lines, retransmission of faxes, e mails, and letters in general.

Local Services

Foreign Investment

Lombardi Aguilar Group provides legal services to clients investing directly in Panama’s economy. The development of the country has its origin in the political stability and economic strength in the last years from its strategic geographical position, its territorial tax regime, its international banking center and other advantages such as:

• Use of Dollar as currency of legal tender• Exemption of local income tax on interest from bank accounts• Strict confidentiality laws in banking and attorney-client matters• Panama has no tax information exchange treaties with other countries and current mutual legal assistance treaties exclude tax matters• Panama has the largest free trade zone of the Americas• English is widely spoken• Low crime levels• Direct flights between Panama City and more than 30 locations in the Americas and Europe• Cost of living lower than that of larger cities in the Americas and Europe• Excellent hospitals and medical services• Large number of bilingual private schools.

Immigration ServicesDue to the development of investments in the country and the constant flow of tourists, executives and businesspeople, the demand for these services have increased. Lombardi Aguilar Group regularly assists clients applying for social residence visas such as Real Estate Investor, Forestry Investor, Securities Investor, Retiree, Second Passport Program and others.

Business LicensesBusinesses providing services to clients from Panama are deemed to considered an onshore activity and therefore must have a Business Licenses fro the Panama Ministry of Commerce. The attorneys of Lombardi Aguilar Group are experienced in obtaining this permit.

Trademark and Patent RegistrationLombardi Aguilar Group recommends the registration of trademarks and patents if a product will be traded in or from Panama. Modern intellectual property legislation compliant with World Intellectual Property Organization standards and ratification of important multilateral treaties ensure protection against counterfeits and unauthorized use. The attorneys of Lombardi Aguilar Group have a decade of experience in these procedures.

Ship RegistrationThe Republic of Panama is the largest merchant fleet of the world because of unsurpassed advantages offered by a network of consulates worldwide specialized ins shipping matters, a 24/365 Maritime Court and the tax advantages granted to shipping activities conducted outside of Panamanian territory. Ships owned by foreigners can be registered in the Panama fleet and loans granted by banks in the U.S., Europe and the Far East are collateralized with enforceable mortgages on Panama-registered ships.

At Lombardi Aguilar Group we are aware of the place occupied by Panama as an International Maritime Center and therefore our attorneys are fully trained to provide this service.

Public ProcurementLombardi Aguilar Group considers very important to offer this service, as the Government of Panama increases the goods and services purchased from foreign providers for its modernization. Government purchases will increase with the awarding of contracts for the US$4 billion expansion of the Panama Canal. Our attorneys have experience representing companies in this are, including:• Preparation of documents and requirements to participate in selection of contractors.• Representation in public bids.• Filing of judicial review actions for violations of the Public Procurement Law.• Advice in contracting with the Panama Canal Authority (PCA), which has its special procurement procedure.

Labor LawWe advise multinational companies in labor and employment disputes. Lombardi Aguilar Group has the experience and knowledge required to provide said advice and avoid labor conflict which may result costly and time-consuming.

Civil LawCivil law is the basis for all types of contracts, obligations and properties, which is why Lombardi Aguilar Group is prepared to provide advice in this area. Daily activities of a

business imply performing several transactions and many times without knowing so, a pre-written civil code applies to relations between parties.

Lombardi Aguilar Group will be pleased to serve as counsel in civil law with the highest professional standards.

Tax LawLombardi Aguilar Group offers legal advice in tax matters, either for clients seeking comprehensive tax planning for individuals or entities with assets in Panama, or when requiring representation before local administrative tax authorities.

Real Estate LawPanama has no restrictions for the purchase of property by foreigners (except for those located 5km from land borders).Property titles are registered in a government public registry under the Torrens system, which allows prospective owners to be aware of all valid liens and encumbrances on real estate. This also ensures protection of security interest in favor of lenders and interest holders.At Lombardi Aguilar Group we know that it is in the client’s best interest to be aware of these and other technicalities related to Real Estate Law in Panama. We have experience and knowledge on laws governing real estate.

Civil and Commercial LitigationWhile conducting a business activity, some conflicts unfortunately cannot be settled in an amicable manner, which requires their being solved by local courts.The attorneys of Lombardi Aguilar Group have experience in representing individuals and businesses in litigation, including submitting evidence under formalistic Standards of Roman Law, pre-judgment sequestration and seizure of assets, and appeals before higher courts.Attention to litigation is a delicate matter and requires high professional standards and knowledge and Lombardi Aguilar Group is available to ensure the best result possible in litigation.

E-Commerce and City of Knowledge CompaniesThe attorneys of Lombardi Aguilar Group serve several U.S. investors actively using high broadband access, large data warehouses, secure banking facilities and flexible corporate regulations to conduct electronic transfer and e-commerce activities hosted from Panama. Companies set up in the City of Knowledge technology zone enjoy additional tax benefits and foreign worker quotas. The firm obtains regulatory permits

required by a foreign investor and works alongside several service providers to ensure the success of an e-business.

Free Trade Zones and Export Processing ZonesAt Lombardi Aguilar Group we have the experience needed to advice with regards to the setting up of a company in a Free Trade Zone. The Colon Free Trade Zone is the largest of the Americas and provide a large number of tax advantages to investors packaging and re-exporting for foreign markets as well as access to the best and largest air and sea transshipment facilities of the Caribbean.

Panamanian Private Foundationsby Alvaro Aguilar

LOMBARDI AGUILAR GROUPFax: +507 340-6446 Tel: +507 340-6444 Mobile: +507 6638-8707 Airmail address: P.O.Box 0831-1110, Panama 0831, Panama Courier address: Aquilino de la Guardia St. Ocean Business Plaza, 12th Floor, Panama City, Panama E-MAIL: aaguilar @ laglex.com INTERNET: http://www.laglex.co m

INTRODUCTION

A Private Foundation is a legal entity with its own existence and identity, which is used for family, religious, public or charitable purposes and can not undertake commercial activities as a regular objective as they shall not be profit oriented. It may nevertheless engage execute commercial transactions and businesses necessary to carry on its objectives. Also, a Foundation can exercise shareholders' rights as owner of the shares of stock of a corporation that may be part of its assets.

These foundations are of similar nature to the Stiftung from Liechtenstein.

FORMATION

The formation of a Private Interest Foundation is as simple and expedite as for the organization of a Panamanian offshore company. It can be created by one or more individuals or corporations, either directly or through a third party, usually, the Resident Agent of the Foundation, by means of the adoption of a deed which must be notarized and registered with the Public Registry. Once the deed is registered, the Foundation comes to life and is immediately able to comply with its objectives and may acquire and possess assets of any kind, contract obligations and be part in any administrative and judiciary process.

The management and operation of the Foundation is not subject to the supervision of any authority.

A Foundation will last either for the period stated in the statutes or when its purpose has been achieved.

EFFECT OF THE FOUNDATION AFTER THE DEATH OF THE FOUNDER

A Foundation can be created to become effective upon the death of the Founder, in which case the Founder does not have to comply with the requirements and formalities

for the granting of a will. Also, the founder's heirs will not have the right to revoke the creation of nor object the assignment of properties to the Foundation.

The law expressly states that the existence of legal provisions in the country of domicile of either the founder or the beneficiaries of the Foundation related to inheritance matters will not affect the validity of the Foundation; the assignment of estates to the Foundation nor the compliance or carrying on of its objectives.

IRREVOCABILITY

The Foundations will be irrevocable, except under any of the following circumstances: a. If the foundation deed has not been registered with the Public Registry; b. The foundation deed indicate otherwise. c. For any reason set forth in the Panamanian legislation to revoke a donation. d. Foundations created to take effect after the death of the Founder can be revoked by him at any time.

Transfer of assets to the Foundation either by the founder or by a third party shall be irrevocable unless otherwise stated in the act or document of assignment.

ESTATE OF A FOUNDATION The assets of a Foundation may be obtained as a result of any lawful act or transaction and may consist of properties of any nature, present or future, either real estate, securities, shares of stock, chattel of any nature and money, among others. The assets of a Foundation can be increased at any time.

Once a Foundation has been formed, the founder must comply with his duty to transfer and deliver to the Foundation assets for a value equal to no less than U$10,000.00.

The assets of the Foundation are a separate and independent estate from the founder's personal assets. Once the assets have been transferred to the Foundation, their property no longer belongs to the founder, therefore said estate can not be attached, seized or be subject to any lawsuit or legal actions as a result of obligations or liabilities of the founder or the beneficiaries of the Foundation.

The creditors of a founder have the right to object or contest the creation of a Foundation or the transfer of assets should that represents a fraudulent action against their credits. The rights of the creditors will elapse in a period of three (3) years as of the registration of the foundation deed of the Foundation in the Public Registry.

FOUNDATION COUNCIL

All Foundations must have a Foundation Council or Board of Trustees, formed by individuals or business entities, which shall have the duty to fulfill the objectives and

purposes set forth in the deed of formation. The members of the Council are appointed and replaced by the founder or his attorney-in-fact.

TAX BENEFITS

The law states that the organization of a Foundation; the amendment of its articles or its dissolution will not be subject to any type of tax, nor will the assignment, transfer or security of the assets of the Foundation.

A flat tax of US$400 and resident agent fees are due every year. Non-payment of the flat tax results in additional fines of up to US$350 per unpaid year.

REDOMICILIATION OF FOUNDATIONS

Foreign Foundations can be domiciled in Panama and adopt Law 4 as a governing legal provision by recording its foundation deed together with a good standing certificate issued by the country of organization and an affidavit by its Foundation Council stating the interest of the Foundation to continue existing now as a Panamanian Foundation.

Formation of British Virgin Islandsand Panama Corporationsby Alvaro Aguilar

LOMBARDI AGUILAR GROUPFax: +507 340-6446 Tel: +507 340-6444 Mobile: +507 6638-8707 Airmail address: P.O.Box 0831-1110, Panama 0831, Panama Courier address: Aquilino de la Guardia St. Ocean Business Plaza, 12th Floor, Panama City, Panama E-MAIL: aaguilar @ laglex.com INTERNET: http://www.laglex.co m

BVI COMPANIESThe British Virgin Islands ("BVI") are a British Colony located in the Caribbean. The BVI are autonomous from the United Kingdom, except with respect to their external matters, defense and internal safety. Its legal system is based on the English Common Law. English is their official language and their official currency is the U.S. dollar. There are no exchange controls nor requirements to file corporate reports of any nature, therefore the islands offer multiple tax advantages to the non-resident that organizes companies therein.

A. BVI Off-shore CompaniesThe legislation of the BVI provides for several types of companies, of which theBusiness Companies (BCs) are the off-shore companies with the greater number of advantages.

B. Advantages of the BC.The main advantages of the BC are:1) Exemption from payment of any income tax;2) Can conduct most business transactions (except conducting banking and insurance activities and other businesses with residents of the BVI; or to possess real estate in BVI);3) Requires a minimum of only one shareholder and one director;4) The directors and shareholders can be entities or individuals resident in any country;5) The shares can be issued to the bearer (when immobilized with a licensed entity) orregistered;6) The Board of Directors can meet in any part of the world and even by telephone;7) The payment of minimum capital is not required, and the shares can be issued at par or non par value;8) The names of the Directors, Officers and shareholders do not need to be registered in apublic record ;9) No need to file annual reports nor tax returns;

10) Can transfer its domicile and continue existing as a company incorporated under the laws of a jurisdiction outside of BVI; a foreign company can also become a BVI BC;9) Neither the minutes book nor the shares book need to be certified by any authority of BVI;10) It is not necessary to carry out Directors or shareholder meetings on a regular basis.C. Incorporation of the BC.The Memorandum and the Articles of Association are subscribed by BVI residents and then submitted for their registration by the Companies Registrar. The incorporation process takes approximately five days. We also have companies already organized available for immediate use by the client.D. Administration of the BC.1. Directors and Officers. The activities of the BC are handled by its Board of Directors, which first members are appointed by the subscribers of the Memorandum and the Articles of Association. Thereafter, the Directors will be elected by the shareholders. The remaining Directors will be able to choose persons to fill the vacancies that occur in the Board of directors.The Directors can choose Officers and appoint attorneys-in-fact to act on behalf of the company. It is not required to register the appointment of directors, officers or attorneys-in-fact in the Registrar of Companies of BVI.The name of the company must include the word 'Limited', 'Corporation' or 'Incorporation', or the abbreviation 'Ltd.', 'Corp.', 'Inc.' or 'S.A.'.2. Shareholders. It is not necessary to issue shares of the company, unless the Board of directors decides so. The shares should be paid in full at the time of issuance, and they can be issued for money, services or properties received. The name of the shareholder must be registered in the shares book, which is not open to the public. The meetings of the shareholders will be conducted whenever the Directors consider it necessary or desirable or through written request of the shareholders that represent more than 50% of the votes.The resolutions of the shareholders can be approved by telephone or in a duly convened meeting, and they can also be adopted through written consent.3. Registered Office and Agent. The company must have a registered office and agent in BVI, services that are retained by LOMBARDI AGUILAR GROUP (BVI) LIMITED. An entity for immobilization of shares must also be retained for a yearly fee if the Articles of Incorporation allow for issuance of bearer shares. A copy of the shareholders book should be maintained at the registered office.4. Seal of the Company. It is required that the company have a seal, and the Articles ofAssociation appoint the person authorized to use the same.5. Recordation requirements. The only documents that should be recorded at the Companies Registrar are the Memorandum or Articles of Association and their amendments, mergers, consolidations and dissolution of the company.6. Mergers and Consolidations. It is permitted that a company be merged or consolidated with other BVI or foreign companies, provided that the consolidated or surviving companies comply with the requirements of the BC Act.

7. Dissolution and Liquidation. The BC can be dissolved by resolution of the Board of directors, if no shares have been issued. In case that the shares have been issued, the company must be dissolved through a shareholders resolution.

E. Taxation and Laws.All the dividends, interest, rents, royalties, compensations and other amounts paid by company established under the BC Act to persons that are non-residents of BVI are exempt from payment of income tax. The capital gains earned from the sale of whatever shares or other securities of an BC are also exempt from payment of any tax. The incorporation duties of a company with an authorized par value capital of up to US $50,000.00 are of US $350.00. The incorporation duties are of US $1,100.00 for a company with an authorized par value capital above US $50,000.00. An additional yearly duty of at least US$1,100 is applicable to BCs with Articles of Incorporation that allow issuance bearer shares.A company that is incorporated by December 31st of any year will have to pay the Registrar an annual license duty before July 31st of the following year. For example, a company organized in March of 1996 must pay the annual license duty by July 31, 1997. The license duty is of US $350.00 if the authorized capital of the company is below US $50,000.00 and US $1,000.00 if its authorized capital is above US $50,000.00.BC laws are subject to occasional amendments and regulations, so we advise contacting us in advance in order to determine if any changes have ensued after the date of this document.

PANAMA CORPORATIONSThe Republic of Panama has always played an important role in international trade due to the favorable laws that have been enacted in order to make it a location attractive for investors of all parts of the world. The U.S. dollar is the official currency of the country and is used in all financial transactions, without applicable exchange restrictions nor requirements to file corporate reports of any kind. Furthermore, the income earned from sources outside of the country is exempt from taxes.

A. Off-shore Companies in the Republic of Panama.The incorporation and operation of off-shore corporations is governed by Law 32 of 1927, which has been maintained without changes from its enactment. Currently there are more than 200,000 Panamanian corporations, which constitutes the best evidence of the advantages that these corporations offer.

B. Basic features of a Panamanian corporation.

1. Neither the subscribers of the Articles of Incorporation, nor the shareholders, nor the Directors must be Panamanians or resident in Panama. There must be at least three individuals or entities acting as Directors.2. There are no legal requirements with respect to a minimum paid-in capital. According to the law, it is not necessary to report payment of the subscribed capital.3. Corporate income is not subject to taxes in Panama as long as the corporation does not do businesses in Panama. The only tax that the corporation must pay (aside from an annual duty of US $300.00) is the recordation duty of at least US$60.00 payable at the time of the incorporation, which increases according to the amount of the authorized capital.4. No additional formalities are required, except to record at the Mercantile Registry of Panama the subsequent amendments to the Articles of Incorporation and the elections of the Officers and Directors.5. A Registered Agent must be maintained in Panama, service that the law firm, LOMBARDI AGUILAR GROUP provides.6. The corporation is formed in approximately two (2) days as of the date in which payment for its formation is received. Corporations are also available in reserve for immediate use.Corporate names may be reserved previous to incorporation for up to 30 days.7. The corporation can grant a General Power of Attorney to one or several persons of any nationality to act at their discretion on behalf of the corporation. It does not need recording to become valid.8. The shareholders, directors and officers can be of any nationality, resident in any country, unless the corporation conducts retailing activities in Panama.9. The corporation is governed by:i) Shareholders: The meetings of the shareholders can be conducted outside of Panama, if the Articles of Incorporation provide so. The shareholders can be represented through a proxy.ii) Board of directors: At least three (3) Directors should be appointed, unless the Articles of Incorporation provide otherwise. The meetings of the Directors can be conducted outside of Panama, and they can be held by representation through a proxy holder that needs not be a Director. The Board of Directors is elected by the shareholders, but the vacancies, either resulting from an increase in the authorized number of Directors or any other reason, can be filled by a majority vote of the remaining Directors.iii) Officers: The corporation must have at least a President, a Secretary and a Treasurer, who will be chosen by the Board of directors. Any person or entity can hold two or more posts if the Articles of Incorporation or the Bylaws provide so.10. It is not an obligation to carry out shareholder or Directors meetings annually nor during any other interval.11. Shareholder or director meetings may be held with parties being in communication by telephone, fax, or other electronic means. Resolutions adopted may be signed in different places and dates.

12. For information purposes, financial statements may be recorded in the Public Registry at the option of the corporation.13. The corporation is not required to maintain a seal but it can be used, if it chooses to do so.14. A Panamanian corporation can be merged with another Panamanian or foreign corporation. The surviving corporation can be, either the foreign corporation or the Panamanian corporation.15. Foreign corporations may redomiciliate to Panama by recording their corporate documents in the Panama Public Registry.16. Panama corporation can redomiciliate to another jurisdiction as long as it has no outstanding annual franchise duties.17. A flat tax of US$300 and resident agent fees are due every year. Non-payment of the flat tax results in additional fines of up to US$350 per unpaid year.18. Shares may be issued to the bearer when immobilized with its registered agent or custodian, or in registered form.19. A Panamanian corporation can be dissolved by vote of the majority of outstanding shares with voting rights in a duly convened meeting, or through written consent of the holders of all the outstanding shares of the corporation with voting rights, without need of a meeting.

Panama Trusts for Asset ProtectionLOMBARDI AGUILAR GROUPFax: +507 340-6446 Tel: +507 340-6444 Mobile: +507 6638-8707 Airmail address: P.O.Box 0831-1110, Panama 0831, Panama Courier address: Aquilino de la Guardia St. Ocean Business Plaza, 12th Floor, Panama City, Panama E-MAIL: aaguilar @ laglex.com INTERNET: http://www.laglex.co m

A trust is not a legal entity. It is organized by way of a legal action, comprised in a document called the “trust deed”. It is prevalent in jurisdictions with the Anglo-Saxon legal system but there are occasions when it has been adopted by civil law legal regimes, as is the case in Panama .

Under a trust, the assets remain as a separate patrimony. They are not part of the trustee's own patrimony, hence they are not to be subjected to precautionary measures (attachments or executions), except in case of obligations or damages caused as a result of acts directly related to the purposes of the trust deed.

Creating a trust and settling it with specific assets, may potentially safeguard the assets as an alternative from local marital or inheritance regulations to which the settlor may be subject to in accordance with his laws of nationality or domicile.

The Panama trust provisions are upheld by local courts even when they contradict the settlor´s national law which may impose forced successions or a legal attack filed by a potential heir. The trust is also used to safeguard assets from disputes and claims brought by civil creditors.

The Panama trust may cover present or future assets of any nature. It may be created to have effect "inter vivos" or "mortis causa" of the settlor. The Panama trust may be revocable or irrevocable. When a trust is revocable, the trustee as well as the beneficiary or beneficiaries may be substituted by others, at any time. In the opposite case they can be substituted only in the manner described in the trust deed.

Neither the constitution, amendment nor termination of the trust, nor the transfer of the trust assets shall be subject to levying of Panama taxes, as long as said assets are: a) located abroad, or deriving from foreign sources, or b) are shares or securities of any kind, issued by institutions whose revenues are not derived from taxable Panamanian sources, even if such shares or securities are deposited in the Republic of Panama. This exemption also applies to funds earned from foreign sources, even if they are deposited in Panama.

Acquiring Real Estate in Panama by Alvaro Aguilar

- Ownership and Holding of Properties by Foreigners Panama is one of several Latin American countries that welcome foreign investment into real estate, by allowing full ownership of property by citizens of any country. Added to other advantages such as use of the U.S. dollar as legal tender, a legal system for accurate registration of property titles and a cadre of U.S.-trained engineers and architects, Panama City has become the destination of investments into real estate as seen in its urban skyline. Rural properties are also of interest for foreigners, since the American Association of Retired Persons named Boquete in Western Panama as the 4th best foreign location for living by U.S. retirees.

The Panama Constitution guarantees the right to ownership of property, as well as equality between na-tionals and foreign residents before the law. However, special restrictions can be enacted for immigra-tion and health purposes. Ownership of property by foreigners is not allowed in the areas up to 10 km away from the borders, which are covered by inaccesible rainforest – thereby leaving the best lands open to foreign investment. The seas, lakes, rivers and the Panama Canal waterway are non-transferrable public domain, while owners of beaches and islands must grant a public right-of-way to the sea.

The Constitution forbids confiscation of properties as a penalty, although property acquired under money laundering schemes is subject to forfeiture. Expropiation is allowed for emergency public interest pur-poses, but only after a hearing with the owner and payment by the Government of fair, adequate and prompt compensation under international standards. Bilateral investment treaties with the U.S., France, United Kingdom and most European countries further ensure protection of investments from citizens of said countries.

Possesion rights may be requested from the Government over public lands available for agricultural pur-poses. However, possession rights are not clearly registered and do not grant as many rights as property rights.

Leases on property are also available. A non-interest bearing, refundable deposit with the Ministry of Housing is required as well as registration of the contract with said Ministry. Lease agreements with terms above 3 years must be registered at the Public Registry.

- How is property transferred

Unlike the U.S., where each county has court clerks for registration of title deeds, Panama has a single, centralized, computerized, national Public Registry where ownership and encumbrances of Property, Condominiums (called Horizontal Property), Airplanes and Ships are registered. Property-related trans-actions are not valid before the public until recorded at the Public Registry. The centralized system allows a title search at the Public Registry to reveal in a single day the measurements, coordinates, mortgages, encumbrances, judicial actions, restrictions, rights-of-way of each property, which is assigned a "finca" number for identification purposes.

The Civil Law requires that the buyer and seller appear in person before a Notary Public to close the sale. However, parties located abroad can grant a power of attorney before their local Notary Public and Panama Consul to appoint an attorney-in-fact to conduct said formality in Panama. The Notary Public drafts a Public Deed, a true copy of which is registered at the Public Registry in 1 or 2 weeks. Transfers of property are subject to a registration duty of US$2.50 for every US$1,000 of the transaction price (usu-ally paid by the buyer), as well as a Capital Gains Tax of 2% on the assesed value of the property (levied on the seller) increased at a 5% or 10% annual rate from the previous sale price.

Properties that are not being used actively are subject to adverse possession claims by residents without title that live there for 15 continuous years without opposition from the owner. This is not a problem in real estate markets of Panama City and other urban areas, but is a potential source of disputes in large,

remote, rural properties. A physical inspection and a search of the plat at the Property Surveyor's Office ("Catastro") is a must before purchasing such rural properties. Local insurers do not provide title insur-ance but some U.S. buyers have sought coverage from specialized insurers abroad.

Condominiums and gated communities may be subject to a special Horizontal Property regime. This re-gime allows individual housing or office units to be separately sold, while their current and future owners remain subject to use restrictions in the By-laws of the complex. The permanent nature of these privately-enacted restrictions make this regime an efficient tool for developers interested in preserving the special nature of large residential and commercial developments.

- Financing of real estate

With almost a hundred general-license banks, Panama has no shortage of financial institutions willing to lend credit-worthy buyers of urban properties, subject to a mortgage on the land or a pledge of funds as collateral. The use of the U.S. dollar as currency and the lack of exchange restrictions allow banks to grant 25-year mortgages at rates between 7 and 11%, which are among the most favorable lending con-ditions in Latin America. After their purchase, urban properties with high resale value can serve as collat-eral to finance an ongoing business activity of the property owner.

In practice, a prospective buyer requests a letter from the bank financing the purchase, stating that pay-ment will be made once the transfer of title and the mortgage are simultaneously registered at the Public Registry. This serves as an escrow service which provides an additional guarantee for both the bank and the buyer. Valid mortgages must be granted before a Notary Public and recorded at the Public Registry. Applicable registration duties are of US$0.25 for every US$100 of the mortgage amount.

- Tax incentives

Real estate with an appraised value above US$30,000 is subject to yearly property taxes between 1.4% and 2.1%. However, the Panama Government provides incentives to the construction of buildings and ownership of residences, which encourage investments by locals interested in a secure tax shelter. The fact that construction provides needed employment to unskilled labor and addresses a chronic housing shortage, has prompted the Government to provide the following tax incentives: 1) 20-year exemption of property tax on the value of buildings and improvements, (in force until 2006, after which the maximum will be of 15 years.)2) Exemption of Capital Gains Tax on the first sale of residences, 3) Banks granting residential mortgages for new residences below US$62,500 receive a negotiable tax credit equivalent to interest reduced in 2 to 4 points below the prevailing rate, 4) Buyers of residences can deduct from their taxable income the amounts paid as interest for mortgages without the tax credits listed in 3), 5) Developers can deduct up to $1,000 on taxable income from the sale of low-income housing with a price of less than US$14,000, 6) Developers can declare as non-taxable income the profits from sale of real estate that are re-invested in the construction of new residences, as long as the value of the new building is below US$62,500 and equivalent to four times the amount of the profits realized.

Foreign investors should seek the advice of competent tax counsel in their country of residence to de-termine their applicable fiscal compliance requirements and liabilities.

- Special zones of interest

The XVIII- and XIX- century buildings of the Old Panama City (called "Casco Viejo") represent a historical district of interest, for which special incentives have been enacted. Only residential, commercial, tourist and cultural projects that preserve the architecture of the district are allowed, after being reviewed by the a government board. In addition to normal tax incentives, banks granting mortgages Casco Viejo projects receive a negotiable tax credit equivalent to interest reduced in 2 to 4 points below the prevailing rate.

The largest real estate transaction in the Americas is the ongoing sale or lease of 300,000 acres of land and buildings of the former Panama Canal Zone turned over by the U.S. to Panama in 1999. The Autor-idad de la Región Interoceánica (ARI) a government entity in charge of attracting investors interested in converting these facilities into economically-viable businesses. Business opportunities are grouped into: 1) Maritime activities: container ports, ship chandling and repair, salvage operations), 2) Industrial parks: maquiladoras, information technology and other environmentally-sound industries, 3) Tourism: retirement communities, hotels and eco-tourism, and 4) Education: higher education and research.

Parcels available for commercial or residential development are listed in the local media and the ARI In-ternet website. Also available for sale are 3,000 housing units already built in suburban areas.

Non-residential parcels or pre-existing facilities are offered by ARI for lease or concession for a renewable period of up to 25 years. Private investors can also submit project proposals with the respective feasibility and environmental studies to ARI, which if approved will then be open to public offering. Said contracts are granted under a public bid procedure. In the case of mega-projects where only a few qualified operat-ors exist worldwide, an exemption from the public bid procedure may be exceptionally granted that allows direct contracting. Housing units are offered for sale by ARI and sold to the offeror paying the highest price above the base price listed in the media.

Additional incentives for real estate developers are described in the Export Processing Zones, Tourism and Reforestation sections.