Offshore Foundations

Offshore FoundationsAn offshore foundation is a legal entity with the main difference to an offshore trust is that it doesn’t have any members, shareholders or partners.

The world’s first foundation “Foreign & Colonial Investment Trust” was established in Scotland over 100 years ago. Classic jurisdiction to create offshore foundations – British Virgin Islands, Cayman Islands, Luxembourg, Dublin.

Main elements and key individuals involved in the creation of a private offshore foundation:

  •  The Founder – the person (legal or natural) who has created a fund and has transmitted any property to that fund;
  • The Charter (Foundation Charter or in some jurisdictions – Declaration of Establishment, Memorandum of Establishment) – is an official document that is required for registration of a foundation. It is also the main regulatory instrument of the fund.
  • The Council – the main executive body of the fund.
  • The Beneficiaries – the persons in whose interest the fund is has been created and who benefit from its creation.
  • The Guarantor – the controller whose responsibilities include the control of the fund and its management in the interest of the beneficiary.

Offshore funds, unlike trusts, do not need shareholders and trustees.

Recently, there has been an increase in popularity of offshore foundations that have been used to a wider scale relative to offshore trusts.

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Key features of offshore foundations:

  • The management of such foundation is made by foundation council.
  • The founder may also express his wishes in the Founder’s Charter and Regulations of how his assets ought to be managed before and after his death.
  • These structures usually have a specific purpose and can be used for either commercial or private purposes in order to manage and protect its assets and gain tax benefits.
  • Another uses can include inheritance tax planning, estate planning, pension funds, charitable purposes etc.

Main advantages of using a foundation:

  • Setting an offshore foundation is relatively simple as it only entails minimum of administrative requirements.
  • Once the foundation is set, it becomes a separate legal entity and both the founder and the assets are protected against the future claims.
  • In order to increase confidentiality and wealth protection offshore foundations are often used together with offshore companies. An offshore foundation can play a role of an owner of such company and get regular transfers of its profit.

BRIS GROUP provides administration services for foundations, including the provision of a company or a third-party to act as founder and as a member of the Council and for the opening of bank accounts, among others. It will takes 2-3 business days to set up an offshore foundation and 2 business days to open a bank account.

Depending on the objectives there are four main categories of foundations:

  • Private offshore foundations: asset protection, asset transfer by inheritance, to minimise taxes on the property;
  • Corporate foundations: for pensions of employees, to ensure continuity of management of the corporation;
  • Charitable foundations;
  • Special foundations – for philanthropic and other purposes.

Who needs an offshore foundation? These are individuals who:

• want to protect personal capital due to the political, economic and family instability.
• want to pass capital to heirs in the most efficient way from a tax perspective.
• plan the distribution of profit among family members most effectively.
• want to exercise their right of inheritance according to their wishes, and not to the national legislation of their residency.

If you would like to protect your wealth from future uncertainties, an offshore foundation can be an ideal solution for you. In order to get more information, advise and help with setting up an offshore foundation please contact us.