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Foundations were introduced approximately 100 years
ago in Western Europe. Their use for estate and asset planning
started in Liechtenstein in the early part of the 20th Century.
Foundations have since become popular across the globe, especially
in civil law jurisdictions where the concept of ‘Anglo Saxon
Trusts’ is less well known. Foundations can be established
in many countries including, Panama, The Netherlands Antilles
and the Bahamas – who introduced Foundation legislation
in 2004 to make it a leading common law jurisdiction contender
for the domicile of Foundations.
A Foundation is a separate legal entity, without
members or shareholders and is generally established to reflect
the wishes of the founder, who may be an individual or a corporate
entity. These wishes are contained within the foundation's Deed
of Incorporation, Articles of Association and Bye Laws. Foundations
can be established for a fixed or indefinite period of time and
can be used for charitable, commercial or for family purposes.
In the case of a Bahamian Foundation a resident
person or licensed Bahamian Corporate body, must be appointed
by the Founder as Secretary and a Foundation Council or Governing
Body including a Protector can be appointed by the Founder to
ensure that the affairs of the Foundation are carried out strictly
in accordance with the Founder’s requirements.
Foundations are a very important component when
structuring the ownership of family and corporate assets and are
particularly important where Trusts are not generally recognised.
They are in many respects similar to corporate entities but afford
the protection and continuity derived from the use of Trusts.
Practical Uses of Offshore Foundation
- Private relationship, for example, the Founder’s wishes
are not publicly registered
- Wealth protection
- Recognised in all common and civil law jurisdictions
- Holding assets which can be passed on from one generation
to the next (estate planning)
- Inheritance tax planning
- Avoidance of forced heirship rules
- Maintenance of corporate control
- Separation of voting and economic benefits
- Employees share option schemes
- Pension funds
- Art collections
- Charitable purposes
- An important tool in international income, capital gains
and estate tax planning
- Used by corporations for employee benefit plans, retirement
and stock option schemes, insurance plans and special financing
arrangements.
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What assets can be held by an Offshore Foundation?
- Shares and stocks in both quoted and private companies
- Investment portfolios
- Real and intellectual property
- Bank deposits
- Life assurance policies
- Most other types of asset
Offshore Foundations for Individuals
A Foundation is the solution for individuals
who:
- Want to preserve their wealth against uncertainty; either political,
economic or family related.
- Want to transfer wealth to their heirs in a tax-efficient
manner. They want to plan their estate to maximise the benefits
of their wealth for family members and others.
- Want to transfer wealth to their heirs in accordance with
their wishes and not in accordance with the laws of the country
where they live.
- Want to consolidate the ownership of assets owned throughout
the world in one location.
- Want centralised reporting.
- Want to minimise or eliminate estate taxes arising on the
death of the Founder.
Why establish a foundation offshore?
When a Foundation is established in a suitable
offshore jurisdiction, provided that residents of the offshore
jurisdiction are excluded from receiving benefit from the Foundation,
then there will be no local taxes applicable to the assets and
income of the Foundation.
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