A foundation is frequently used to make assets legally independent from the founder by transferring them into a legal entity. A foundation is incorporated by an entry on a register and like a company it has a name, registration number and a separate legal personality.
Unlike a company, a foundation has no shareholders, in theory it is not owned by anybody; instead it has beneficiaries who are entitled to enjoy the assets and the income of the foundation.
Foundations are creatures of statute and as a result the legislative background governing each county will determine how they work.
Offshore Foundations are most commonly associated with Liechtenstein and frequently used in inheritance tax planning however we are able to create foundations in multiple jurisdictions, tailored to the client’s individual needs.
Some of the most recent jurisdictions to permit the formation of foundations are listed below:
For specific guidance with the formation formalities for each separate jurisdiction, please consult one of the specialist formation consultants at Offshore Universe.
The founder provides the assets and through a declaration or articles (similar to the memorandum and articles of association) how the assets of the foundation are to be administered. In some jurisdictions there may also be bye-laws which will supplement the foundation’s constitution.
It is not uncommon for the founder to reserve certain powers in the foundations’ constitution such as; the ability to remove the foundation council, exclude or add beneficiaries and/or to unilaterally change the bye-laws.
In certain jurisdictions one must be careful not to strictly regulate the structure of the foundations as the reservation of too many powers can prevent the foundation from being properly incorporated. In the circumstances, we strongly recommend that you consult with one of our specialist offshore consultants before attempting to create this type of structure.