HM Government of Gibraltar Approves Bill Enabling the Establishment of Private Foundations
Gibraltar continues to develop and diversify its services with the creation of the 'Private Foundation Act 2017' on Thursday 6 April.
The approval of this bill demonstrates the Government's desire to continuously develop its financial services, tying in with legislation for Limited Liability Partnerships, Private Trust Companies and, of course, the redrafted Companies Act.
The establishment of the Gibraltar Private Foundation Act brings to the sector a vehicle which is often preferred by civil law based clients over the often utilised Anglo-Saxon Trust.
A Private Foundation provides a fiduciary structure for the orderly transfer and disposition of assets to beneficiaries upon the death of the Founder, who directs the administration of assets through the Foundation's regulations.
These regulations may be established so that they have effect from the date of their constitution or after the death of the Founder.
The Act also allows for the re-domiciliation of a Foundation. This is effectively the moving of a foundation from its current registry to Gibraltar, or away, and is only possible where the current Registry also permits for re-domiciliation.
Re-domiciliation has proven to be useful in the past, more so with companies, due to an unfavourable change in any one given jurisdiction or the Founder's personal situation, or simply a desire for a more cost-effective jurisdiction. Re-domiciliation is often preferred to the transferring of assets, as transferring assets could crystallise an undesirable tax liability.
We would expect the registration process of a Private Interest Foundation at Companies House to take approximately 5 to 8 working days after all necessary data and documents are received.
You can read the full Act here.
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.