Offshore Foundations

  • A Foundation is a separate legal entity (like a company) but with beneficiaries rather than shareholders (like a trust).


  • Assets transferred to a Foundation become the property of the Foundation with full legal and beneficial title and are no longer onsidered to be the assets of the founder.


  • Similarly, Beneficiaries of a Foundation are not the “owners” of the Foundation and have no legal rights to its assets nor control over its decisions. The Foundation is managed by a Foundation Council which is made up of Councillors.


  • A Foundation may additionally have a “Protector” similar to a trust which would normally have powers to oversee the activities of the Foundation Council and remove them if they are not fulfilling the objects of the Foundation.

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  • The Founder may also retain certain powers and rights to himself or another person such as the right to remove and add beneficiaries or perhaps to direct the investments of the Foundation.


  • Offshore Foundations in most jurisdictions are completely exempted from payment of income, capital gains, stamp duty, withholding or any other form of taxation.



Structure of a Foundation                                       

Founder                                                                    

The Founder is the person or entity that establishes the Foundation and transfers his or her assets to the Foundation.

May be any individual or legal entity (including companies, trusts or even another Foundation) and may be a “nominee”.

May have two or more Co-Founders

May reserve certain rights to himself or another person in the Charter or Regulations such as the right to direct investments, appoint/remove beneficiaries, dissolve the Foundation, etc.

May be a Beneficiary, but not the sole Beneficiary.

May be a Councillor, but not the sole Councillor.

May be a Protector.



Foundation Council                                                    

The Councillors manage the business and affairs of the Foundation

The Foundation Council serves the same purpose as the board of directors in a company.

The Council must consist of one or more persons (legal or natural), known as Councillors.

It can appoint and remove its members and Beneficiaries, dispose of assets, re-domicile or dissolve the Foundation.

The Regulations broadly define the powers and roles of the Councillor. The Councillors can hold meetings anywhere in the world.

The minutes of the meetings are required to be maintained.

Founder may be a Councillor but not the sole Councillor

Protector may be a Councillor but not the sole Councillor

May be identified in the Charter or Regulations (not publicly filed)

 

Protector                                                                    

If so provided in the Charter or Regulations the Foundation may appoint a Protector.

A Founder, Councillor or beneficiary may be appointed as the Protector except that a sole Councillor or sole Beneficiary shall not act as a Protector.

The provisions in the Charter will determine the limits and extent of the Protector’s role and actual responsibilities.

Duties could include the appointment or removal of Council members or any other specific duty which the Founder would want the Protector to perform.


Beneficiaries                                                                

The Founder can define Beneficiaries or class of Beneficiaries in the Charter and Regulations.

Councillors can appoint Beneficiaries if Beneficiaries have not been appointed by the Founder.

The Founder can be sole Beneficiary provided that another Beneficiary is present at the time of the Founders death / legal incapacity.