Offshore Foundations

Offshore Foundations Overview
Offshore foundations (also known as Private Foundations or Private Interest Foundations) have characteristics of both a company and a trust. They are separate legal entities without any members or shareholders. Private foundations can be used for charitable purposes such as these as well as for "private" purposes such as succession and estate planning.

Private foundations are a product of specific laws found mostly in civil law jurisdictions (although some common law offshore jurisdictions such as Bahamas and Jersey have recently added foundation laws) and are particularly useful as an alternative to the trust for those living in civil law jurisdictions where the concept of the Anglo-Saxon trust is less recognized.

Offshore Foundation Uses
The private foundation may be used for a host of purposes, but it is not intended to engage in commercial, for profit activities on a day to day basis. There are no restrictions on the legal activities of a company wholly or partly owned by the Foundation however. For this reason, many choose to incorporate an offshore company such as an international business company (IBC) which is wholly owned by the private foundation foundation in order to carry out any offshore investment and/or trading/commercial activities. It is also quite common for the private foundation to be the ultimate holding entity for a number of different offshore companies established for various purposes (perhaps one or more offshore companies holding real estate, another offshore company holding an investment portfolio, one more offshore company engaged in trading/commercial activities, etc.). Activities of the Foundation may include (but are not necessarily limited to) any of the following:

Wealth protection
Inheritance/succession planning
Protection and management of assets
Avoidance of forced heiship rules
Charitable purposes
Pension funds
Holding art collections
Receive and manage capital and titles
Minimizing international income, capital gains and estate taxes

The objects of a private foundation can include more than one purpose and could include any or all of the aforementioned purposes.

Foundation Assets
Foundations are generally restricted from holding interests in propery in the location of domicile of the foundation, but may otherwise hold a variety of assets including: