International foundations were introduced approximately 100 years ago, first in Western Europe, when in 1926 the Principality of Liechtenstein created the “Law of Persons & Companies”. International foundations are the type of product that is found mostly in civil law jurisdictions as an alternative to common law jurisdiction trusts. Nevertheless many common law jurisdictions have accommodated foundations laws into their offshore legislation as well, for the reason that foundation formation is rapidly becoming very popular vehicle for asset protection and other purposes.
Foundation is often compared somewhere between a trust and a corporation, as it has characteristics that are similar to both. Just like a trust, foundation offers asset protection by transferring ownership of assets. And yet offshore foundation is a separate legal entity, unlike a common law trust, and for this reason more akin to a company.
Foundation is formed by its founder, who provides the initial assets of the foundation (also known as the endowment). And the foundation is established to reflect the wishes of the founders, who may be an individual or a corporate body. These wishes are contained in the Foundation Charter and regulations. Unlike corporation, foundation has no shares or shareholders, it rather has 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.
Foundation may be used for many different purposes. But, unlike corporation, it is not intended to engage in commercial day to day activities. For this reason many choose to incorporate an offshore company which subsequently is owned by the foundation. This way one can get the protection and continuity offered by the foundation and in the same time -engage in commercial activities.
Most common offshore foundation uses are:
- Wealth protection
- Inheritance/succession planning
- Protection and management of assets
- Avoidance of forced heirship rules
- Charitable purposes
- Pension funds
- Holding art collections
- Receive and manage capital and titles
- Minimizing international income, capital gains and estate taxes
- Maintenance of corporate control
- Separation of voting and economic benefits
- Employee share option schemes
- Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements
- Recognized in both – common law and civil law jurisdictions
Foundations may hold different types of assets:
- Stocks, bonds and other securities in public or private companies
- Intellectual property
- Real estate/immovable property
- Bank assets
- Investment portfolios
- Life assurance policies
- Most other types of assets
Is Belize Foundation the right choice?:
- 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 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 and not being bound to follow the laws of the country you live in.
- If you want to consolidate the ownership of the assets you owe throughout the world in one location.
- If you want to minimize or eliminate estate taxes that arise on the death of the founder.
Why establish a Belize Foundation?:
- Belize foundation can be used for charitable or non-charitable purposes. And since the law states that any foundation that is established for both purposes, is recognized as charitable foundation, Belize foundation may further benefit from tax credits and refunds.
- As long as the founder or anyone who contributed to the foundation assets, none of the beneficiaries are residents in Belize, Belize Foundation will be exempt from local taxes:
- any income tax, business tax, withholding tax, asset tax, gift tax, profits tax, capital gains tax, distributions tax, inheritance tax, estate duty or any other like tax based upon or measured by assets or income originating outside of Belize or in connection with matters of administration that may occur in Belize.
- Belize as a jurisdiction offers a high level of anonymity
- Its location is geographically well placed in terms of international relations and access to other jurisdictions worldwide.
Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.
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