Setting up an offshore foundation is an excellent asset protection strategy that is employed by many people from across the globe. The main reasons for setting up foundations are to benefit from advantageous tax opportunities, for enhanced asset protection and for estate planning purposes. Offshore foundations must comprise of certain parties in order for the structure to be a fully functioning legal entity.
Features of a foundation protector
An offshore foundation is comprised of four parties: the founder, the council members, the protector and the beneficiaries. The founder is the individual or corporate entity who has chosen to establish the structure, while the council members are those who have been appointed by the founder to manage the assets in accordance with the Charter and Regulations document. The beneficiaries are those who benefit from the formation of the foundation.
The role of the protector is to supervise the foundation council’s activity and to ensure that they are acting in compliance with the founder’s wishes. Depending on the jurisdiction that the foundation is set up in, the protector may also be responsible for confirming the decisions of the council members, and for making suggestions with regards to which beneficiaries should be selected. In addition to the above, they also have the ability to suggest the manner in which the council members should conduct their activity.
In certain jurisdictions, such as Panama, the protector also has the power to remove and replace the council members. He or she may also assign its role to a new protector at any time. Furthermore, some jurisdictions enable the protector to name the beneficiaries. Any natural person can become a protector, provided they are of sound mind.