 Foundations are usually set up for the protection of the founder's assets and as a tax benefit. The speciality of a foundation is that it has no actual owners/founders but only a board of officers or members.
The most comprehensive definitions of a Private Foundation comes from John Goldsworth, founding editor of "Trusts and Trustees" and an internationally renowned expert on Trusts and Private Foundations:
"A Private Foundation" is an independent self-governing legal entity, set up and registered or recorded by an official body within the jurisdiction of where it is set up, in order to hold an endowment provided by the Founder and/or others for a particular purpose for the benefit of Beneficiaries and which usually excludes the ability to engage directly in commercial operations, and which exists without shares or other participation."
Once assets have been placed into the foundation the owner/founder does not legally own them or have a requirement to declare them. Neither does he own the foundation.
This is of particular interest in cases of bankruptcy, divorce, death or third party claims. There are many types of foundations that may own all types of assets such as bonds, stocks, real estate and even patents or rights.
The benefits of setting up a foundation are the following:
- Tax Exemption
- No Inheritance Tax
- No Tax on Dividents
- Full Confidientiality
- Flexible
- Foundation is a corporate body thus, easy controlling
- No access to the assets of the foundation even if the founder is bankrupt
- Unlimited term
A foundation is not formed in order to conduct business. It is made to manage and protect it's own assets. However it is a very common and useful structure to have a foundation as owner of an offshore corporation. The profit of the corporation is regularly transferred to the foundation but should a bankruptcy of the corporation occur, it would not affect the foundation at all.
A foundation can be private or public. It can be used as a pool by investors or by an individual to protect his assets (often used in the place of a will). Some jurisdictions that register Foundations are St Kitts, Malta, Panama and BVI.
| 
