Who is involved in a foundation
The primary purpose of a foundation is to protect personal and corporate assets from creditors. Foundations are widely used for a number of reasons, from pension fund schemes to charity groups and art collections. Some foundations are also set up for the benefit of children or other family members. However, irrespective of the purpose of the foundation, the effective establishment and management of a foundation will always involve four main parties, regardless of which jurisdiction the foundation is set up in.
For more information on the set up of an offshore foundation, please view our Offshore Foundations services page.
Individuals party to an offshore foundation
Most jurisdictions adopt the same structure for a foundation to operate efficiently and legally. In order to be regarded as a legal entity, an offshore foundation requires the following parties: a founder, a protector, the beneficiary (or beneficiaries) and council members. Each of these party members are indispensible in ensuring that the foundation is set up in line with the applicable regulations, and ensuring it becomes a fully functioning legal entity.
The founder of a foundation is the individual or group who is responsible for establishing the foundation. This can be one or more individuals and their purpose is to specify why the foundation has been established and who is going to ultimately benefit from the foundation’s structure. The protector is responsible for ensuring that the foundation is fully functioning in compliance with the founder’s wishes, whilst the beneficiaries are the individuals who are selected by the founder to benefit from the creation of the foundation. Finally, the council members are those who have been selected to administer the foundation in compliance with the founder’s wishes. All foundations have a Charter and Regulations document, which stipulates the specific wishes of the founder. The council members are responsible for ensuring full compliance with the Charter and Regulations document.
Although most jurisdictions adopt the same foundation structure, there may be some slight variations from one jurisdiction to another in formation, organization and administration. For example, the share capital usually differs between jurisdictions, whilst the rate of taxation (if applicable) is dependent on the taxation rates applicable within each country.
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