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Having difficulty in deciding to establish Trust or Foundation?

January 31, 2013 - by Nida U.

Many clients don’t know whether to choose Trust or Foundation…No wonder there, as they both offer benefits that are somewhat similar! Moreover, in terms of set up, confidentiality and protection provided, both products are very alike.

This is pretty much the first answer I give them:

The main difference is that Trusts historically originate from common law countries, e.g., England, USA and India, therefore are mainly used by these countries. While Foundation is a product predominant and understandable by the Civil law countries, e.g., France, Germany, Russia, Spain. In reality I could even go so far as to say, allegorically, that Foundations are Trusts for the countries who do not understand Trusts.

Therefore many of civil law jurisdictions recognize and prefer the set-up of Foundations, whilst common law jurisdictions prefer Trusts.

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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