Foundations are structures to which legal ownership of property (money, shares, gift, land or encumbrance) is transferred. They contain features both of corporations and trust, so they are especially useful as asset management and tax planning tools.
Basic Framework of Offshore Foundations
- Founder: The person who establishes the foundation, or on whose behalf it is set up or by whom a property disposition (transfer) is effectuated. Generally, an offshore foundation can be established by one or more than one founder.
- Foundation Council: The persons who fulfil the purpose of the foundation as specified by its Bylaws; the Council distributes foundation’s property, administers assets, signs contracts, transacts and invest on behalf of the foundation. Council members owe a fiduciary duty to the foundation.
- Foundation Charter: The official document in which the governing rules of the foundation are specified.
- Beneficiary or Purpose: The person or class of persons for whose benefit the foundation is established. ‘Purpose’ refers to any cause/purpose for which the foundation is formed (e.g charity).
- Guardian or Protector: Guardians and protectors are optional, serving as a protection mechanism to safeguard that the council’s actions and decisions comply with the terms and conditions of the foundation.
Why choose an Offshore Foundation?
The establishment of an offshore foundation is useful when you wish to have your personal or business affairs governed under the statutes of a foreign country, that is to say not the founder’s country of domicile.
In this way, the founders consent to have the foundation established, regulated and vested with certain rights, interests and features by the governing statute of foundations (offshore/international) of that territory.
Among the advantages of an offshore foundation is the creation of a hedge that guards the foundation and its property from being voided, invalidated or in any manner made defective.
Other advantagesresulting from offshore foundations include:
- Eliminating property transfer-related taxes
- Succession planning for personal estate
- Reducing personal net worth to minimize legal damages (compensation) risks
- Extending horizon for investment opportunities
- Succession planning in terms of business ownership
- Acquiring assets through a ‘person’ other than yourself
- Accumulating portfolio income
- Avoiding forced heirship
Any of the above-mentioned benefits/advantages can derive from an offshore foundation in furthering the interests of its beneficiary or purpose (charitable, philanthropic, or any other lawful public or private subject-matter).
Please do not hesitate to contact us for any advice on an asset protection structure based on your specific needs.