A foundation has elements of both trusts and companies and these
vehicles are of great interest to clients to whom the concept of
equity and therefore a trust, is foreign. Foundations combine the
flexibility of a trust entity with the separate legal identity and
transparency of a company. A foundation has a separate legal
personality and is able to hold its own assets, contract with third
parties and sue and be sued in its own name and capacity. It does
not have shareholders and holds the assets for the benefit of
The Foundations (Jersey) Law 2009 came into force on 17 July
A Jersey foundation is created when one or more persons or legal
entities (founders) formalise a Charter, which, is registered with
the Jersey Financial Services Commission (JFSC).
Through the charter, the founders undertake to make donations
(foundation Assets) for the benefit of beneficiaries. Unlike other
jurisdictions such as Panama, Jersey will not require a minimum
level of capital to be held as assets of the foundation. The
foundation assets will be managed by a Council consisting of
individuals or a body corporate and they must include a qualified
person who is registered in Jersey under the Financial Services
(Jersey) Law, 1998 to carry out trust company business. Vistra
(Jersey) Limited is a qualified person.
A Jersey foundation must also have a guardian. The guardian has
a monitoring function to ensure the Council carries out its
functions. The Qualified Member or the founder (but no other
council member) may act as the guardian of the foundation.
A foundation is not required to provide any person (including a
beneficiary) with any information about the foundation except as
specifically provided under the Foundations Law, the Charter or the
Foundations can be used for similar purposes as trusts and
include the following:
asset management for and protection of persons at a
disadvantage due to minority or incapacity
family and/or inheritance structuring. They can also be used to
protect against fragmentation and outsiders gaining control of
family businesses which are passed down through the generations or
as a substitute for a will, circumventing complicated inheritance
as a means of guaranteeing payment of sums of money or assets
to members of one or more families
as a way of sponsoring scientific, humanitarian, philanthropic,
religious or charitable activities or to manage funds reserved for
company ownership. They can serve as the owners of companies
(in which capacity the foundation is generally called a holding
company or a parent company)
administration of employee benefits such as pensions and
as a substitute for prenuptial agreements
to own and/or invest in shares, interests and stocks of private
companies or other securities
to collect royalties and other types of returns
to own real estate or valuable movable property
to insure assets against adverse situations, such as excessive
taxes for those who reside where the assets are located, future
claims by creditors, forced heirs or political or economic
instability in the country where the client resides
to manage bank accounts
for any specific asset protection plan Vistra has experience in
the establishment of Jersey foundations and is able to provide
comprehensive advice on subjects including their establishment and
other regulatory and strategic issues.
Jersey foundations appeal particularly to clients from the
Middle East and Asia who want more control over their assets.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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