Formation of Foundations
The Foundation is probably best viewed as the civil law alternative to the trust. It is created by a founder who transfers assets to the Foundation Council, or Board, to be administered for the benefit of, and ultimately distributed to, the beneficiaries of the Foundation in accordance with the constitution. It can be used for the same purposes as a trust.
Once the Foundation is established it constitutes a separate legal estate from that of the Founder and its assets are protected from future claims against him. Whilst the assets are retained within the Foundation they can be protected also from claims, which may be made against the beneficiaries.
In some jurisdictions a Foundation may be required to register in the Public Registry, but in others often it is only required to register if it engages in commercial activities. Even without registration it acquires a separate legal identity and only the assets of the Foundation are available to meet its debts. Generally little information concerning a Foundation is publicly available and the constituent documents often may be drawn up so as to not publicly disclose the identity of the beneficiaries.
Advantages of Foundations
Total exemption of taxes including income tax, wealth tax, real estate tax, inheritance tax, sales and transfer tax and others, in some jurisdictions.
There is no legal requirement to disclose the name of the real founder, beneficiary or protector.
There is no legal requirement of maximum authorized capital.
The payment of the foundation capital is not required for the incorporation of the foundation and there is no maximum time or deadline to make such contribution.
The founders, members of the foundation council, beneficiaries and protectors may be individuals or corporations of any nationality.
The members of the foundation council need not be founders.
The founders, the protectors and the members of the foundation council may be beneficiaries of the foundation.
There is no limitation on the maximum permitted number of founders, members of the foundation council, beneficiaries or protectors.
The founders and the members of the foundation council may hold their meetings in any country and may be represented by proxy.
The foundation charter can be signed by an attorney in fact or by a trustee without the need to disclose the name of the founder.