Guernsey foundations vs. trusts

Guernsey foundations vs. trusts

Service providers have reported that the Guernsey foundation is particularly appealing to clients in the Middle East, Asia and South America, according to Dominic Wheatley of Guernsey Finance.

This is primarily because of how the foundation can offer a similar feel to a private family company set-up, unlike trusts, which are rooted in common law. However, a foundation differs from a company in that it does not have shareholders to whom the board is accountable but instead holds assets (in its own name) on behalf of the beneficiaries or for particular purposes, or both.

Similarly, a Guernsey foundation offers many of the benefits of the reserved-powers trusts in the Caribbean, but in terms better understood by those in civil-law jurisdictions.

The foundation’s constitution comprises a charter setting out the foundation’s purposes, initial assets and duration, which may be unlimited. The constitution also includes rules prescribing the functions of the council members and the procedures they must follow. Council members provide much the same role as trustees, must act in good faith and cannot, without express authorisation, profit from their position.

As with Guernsey-law trusts, the level of involvement that the founder may have in running the foundation is flexible.  READ MORE: http://www.mondaq.com/x/499770/offshore+financial+centres/The+Growing+Appeal+Of+The+Guernsey+Foundation

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