Offshore Foundations are quickly replacing Offshore trusts due mainly to their ability to be controlled by the Protector (a person close to the original Founder/Owner, or if required the original asset owner themselves, although not wholly recommended) and the ability to operate the offshore bank accounts, rather than have a trustee in control of the funds and assets – giving clients and beneficiaries peace of mind that their life’s assets are not out of their control, whilst at the same time allowing them the benefit of offshore tax structuring.
Using a Foundation to own the shares of an offshore company can give additional “belt and braces” tax advantages in the owner’s country of residence, in addition the Foundation also protects clients assets from litigation and from financial enemies. A Foundation also simplifies matters in the event of the owners death and protect beneficiaries from inheritance taxes.
Protection from Litigation:
The Asset Protection Foundation is ideal for the professional person engaged in any occupation whereby they may become the subject of an unlimited claim for negligence or malpractice. The USA, home of the lawsuit, feature high on the list of users of this type of Foundation. Doctors and Dentists cannot be “taken for all they have got” if sued, providing their assets are suitably protected and owned by the Foundation.
Pre Nuptial Protection:
This type of Foundation can be used by people to protect assets they brought to a marriage in the event of a later divorce.
The concept of a “Foundation” has been well known in Latin Law countries for several centuries.
It is a legal entity separate from its creators, constituted through one sole donation or several donations that form an independent and autonomous estate for a definite purpose.
A “Foundation” is a legal entity that is different from any other entity known in Anglo-Saxon Law. A Foundation is not the legal personification of any other person or persons but a corporate body that has no owners, shareholders, participants or partners. Traditionally, a Foundation has charitable or philanthropic aims for the benefit of a generality of persons.
A mixture between a company, trust and charity!
Advantages of Private Foundations
Private Foundations are a unique form of legal entity which acts like a trust and operates like a company. To follow are some of the advantages of Private Foundations:
- A Foundation is a sui generis (single) corporate body, in existence only in certain jurisdictions, such as: Panama, Seychelles, Lichtenstein and Austria, but where only Panama, Seychelles and Lichtenstein are “offshore jurisdictions”.
- It offers total secrecy and anonymity; no requirement to disclose beneficiaries; no requirement to file annual returns or financial statements; full exemption from taxation on any business activity or transaction carried outside of it’s jurisdiction; simple ongoing administration; complete management privacy and confidentiality.
- A Foundation may transact in whatever currencies it chooses: its founders, members of the foundation council and protectors may be of any nationality and may be residents of any country; the accounting books of the Private Foundation may be kept in its jurisdictions or abroad.
- In no case may its assets be used to satisfy the founder’s or beneficiaries obligations.
- The law on inheritance regarding the founder’s or the beneficiaries’ domicile is not opposable to the foundation nor may it affect validity or prevent the fulfillment of its objectives.
- There are favorable asset protection sections in law.