International foundations were introduced approximately 100 years ago. The first Foundations appeared in Western Europe, when in 1926 the Principality of Liechtenstein created its Law of Persons & Companies. Since then, International foundations have been a legal entity found mostly in civil law jurisdictions, and have served as an alternative to the trusts of common law jurisdiction. Nevertheless, many common law jurisdictions have developed foundation laws into their offshore legislation as well, as foundation formation is rapidly becoming a very popular vehicle for asset protection and other purposes.
Foundations are often described as being somewhere between a trust and a corporation, as they have characteristics similar to both. Just like a trust, foundations offer asset protection by transferring the ownership of assets to another entity, which thwarts the efforts of creditors and third parties who are trying get at the property. Yet, unlike trusts, offshore foundations are independent legal entities, with their own separate legal personality, and in this way this they have much in common with corporate forms.
A foundation is formed by its founder, who provides the initial assets of the foundation. The initial assets are also known as the endowment. The foundation is established to reflect the wishes of the founder, who may be an individual, or a corporate body. These wishes are contained in the Foundation Charter and regulations. Unlike corporations, foundations have no shares or shareholders. Instead, they have beneficiaries and council members. The beneficiaries of a foundation generally have no legal or beneficial participation in the foundation until the assets are actually distributed to them from the foundation.
Foundations may be used for many different purposes. Yet, unlike corporations, the foundation is not a legal entity intended for engaging in day-to-day commercial activities. For this reason many choose to incorporate offshore companies which are in turn owned and operated by a foundation. In this fashion, one can enjoy the protection, anonymity, and prestige offered by a foundation, while simultaneously benefiting from the commercial activities in which companies typically engage.
Foundations can be used for a variety of purposes but they are mainly used for managing commercial operations, charitable purposes, or other individual uses.
Is a Belize Foundation the right choice for your situation?
If any of the following apply, a Belize Foundation could be a solution
- If you are looking to preserve your wealth (from political, economic or family related uncertainty).
- If you want to transfer your wealth to your heirs in a tax-efficient manner.
- If you want to plan your estate by maximizing the benefits of your wealth for family members and others.
- If you want to make a transfer of your wealth to your heirs following your wishes without being hamstrung by the burdensome, and expensive succession and inheritance laws of the country in which you live.
- If you want to consolidate the ownership of your assets throughout the world in one location.
- If you want to minimize or eliminate estate taxes that arise on the death of the founder.