Once you have decided to set up an offshore foundation it is fundamental to select a jurisdiction that matches your personal and financial criteria. This is one of the most significant decisions to be made as it will affect establishment and structure of the entity.
How to form a Liechtenstein offshore foundation
Foundations are popular asset protection strategies set up by individuals and companies from across the globe. Their primary purpose is to act as an estate planning and asset protection tool, and they can be established in many countries internationally, including Liechtenstein.
When setting up a foundation in Liechtenstein, it must be formed in compliance with the Liechtenstein Foundation Law 2008. The structure is very similar to that of a trust, but it differs in that it has a corporate element. It is a separate legal entity in that it does not have members or shareholders. It is generally established to reflect the wishes of the founder, who is the individual or corporate entity who has initially chosen to set up this particular asset protection structure.
All wishes of the founder are contained within a specially drawn up document known as the Foundation’s Charter and Regulations. Liechtenstein foundations can be set up for a fixed period or an indefinite period of time, and can be used for a number of reasons, such as charitable, commercial or family purposes.
A Liechtenstein foundation must encompass a protector, council members and beneficiaries in order to be a legal entity. A protector is appointed to supervise all activity, whilst the council members are responsible for ensuring full compliance with the Charter and Regulations document. The beneficiaries are the individuals selected by the founder who will ultimately benefit from the creation of the foundation.
Many people select Liechtenstein for the formation of their offshore foundation because of its favorable foundation legislation. Such structures protect assets from excessive taxes, as well as claims against creditors, forced heirship or political instability. A range of tangible and intangible assets can be held, including bank deposits, investment portfolios and intellectual property.