By Oliver Donagher Associate Director, Horizon
Like the foundations of a house, Jersey has in recent years been
working on a law to strengthen its foundations as a world-class
leader in the field of Offshore Financial Services.
The new Foundations (Jersey) Law came into force in July 2009.
This new legal entity of a Foundation is a combination of a Trust
and a Company and its characteristics can be summarised as
It can hold assets in its own name
It can enter into a contract, it can sue and be sued in its own
It has a Council of Members to administer the business of the
There are no shareholders, hence some refer to it as an Orphan
It can have one or more objects, which can be either charitable
or non-charitable and/or be for the benefit of one or more
A Foundation is established in a similar way to a Company.
Instead of Subscribers, a Founder is the person who calls for the
Foundation to be incorporated. However, only a Qualified Person,
someone who is registered with the
Jersey Financial Services Commission (JFSC) to carry on Trust
Company Business, can apply for the incorporation of a Foundation,
but a Founder can instruct a Qualified Person to apply on the
The Qualified Person will be required to file a Charter with the
Registrar at the JFSC. The Charter will have to specify the objects
of the Foundation and unlike other jurisdictions, Jersey will not
require a Foundation's objective to be non-profit making.
Many see the advantages of a Foundation as follows:
It can be used for general commercial transactions provided
that they are incidental to the attainment of its objects
It can be seen as an alternative to Trusts, particularly in
parts of the world where the concept of Trusts are unknown or
Charities and Philanthropic organisations can use
Jersey Foundations as a vehicle for distribution In relation to
taxation, Foundations are treated like Jersey Companies, i.e.
liable for 0% tax under the new 0/10 system. However, the service
provider is required to notify the Income Tax Department if there
are any Jersey resident beneficiaries. The UK has no provisions for
Foundations for any of its taxes.
As Jersey thrives in areas such as Wealth Management, clients
seeking a viable alternative to a Trust or Company are finding that
a Jersey Foundation just suits their needs.
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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