The objective of a foundation is much the same as that of a trust. A foundation may be used for charitable and non-charitable purposes, including wealth management and succession planning. Properly structured, a foundation may allow you to maximise tax and estate planning benefits and also to mitigate forced heirship issues.
Neither a company nor a trust, a foundation has some similarities to both. It is an incorporated body that has separate legal personality and can hold assets, transact business and sue or be sued in its own name. Unlike a company, however, foundations have no shareholders.
Foundations are formed by a founder, who provides the initial assets of the foundation – known as the endowment. The assets are held for the purposes set out in the foundation’s document of establishment and are administered according to contractual rather than fiduciary principles.
Whereas trust assets are held by a trustee, a foundation has a council that acts much like a company board and which is responsible for fulfilling the purpose of the foundation. Beneficiaries have contractual rights to enforce the operation of the foundation in accordance with its constitution – rather than proprietorial rights in its assets.
Whether you are looking to establish a charitable foundation in your family’s name, or you live in a civil law country and need a succession planning vehicle for private or family purposes, we can form foundations in the following jurisdictions: