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Guernsey foundations blend hallmarks of both companies and trusts to create a highly adaptable vehicle for wealth structuring, philanthropy and long-term governance. With separate legal personality but no shareholders, foundations can hold and manage assets for beneficiaries or specified purposes while providing founders with fine-grained control and confidentiality options that are often difficult to replicate elsewhere.
What is a Guernsey foundation?
Unlike a trust, a Guernsey foundation exists in its own right. It can contract, sue and be sued and hold assets in its own name - features that mirror a company - yet it is not owned by anyone, avoiding shareholder dynamics entirely. Assets are administered for beneficiaries (who may be enfranchised or disenfranchised) or for purposes that may be charitable, non-charitable or mixed. In practice, this means founders can design a structure that looks and acts like a company from an operational perspective while preserving the purpose-led or beneficiary-led focus typically associated with trusts.
How is a Guernsey foundation created
A foundation comes into being when the founder makes an initial endowment, subscribes their name to the constitution and the foundation is placed on the Guernsey Register of Foundations. There is no minimum endowment and the constitution comprises a charter and rules. Where confidentiality around substantive assets is required, a nominal or no initial endowment can be used at formation, with assets transferred in shortly thereafter.
Every foundation must have a charter stating its name (which must include the word 'Foundation' or the abbreviation 'Fdn.'), purpose, description of the initial endowment and the duration if limited. The foundation must also maintain a registered office in Guernsey, its name, registration number and registered office address must appear on all correspondence. The charter need not include the objects in any great detail nor name beneficiaries individually, thereby offering additional privacy.
The rules set out the operative governance of the foundation, including the establishment and functioning of the council, decision-making mechanics and (where needed) processes for appointing, retiring and removing a guardian. The rules also address application of assets, adding or excluding beneficiaries, conditions to benefit, protective provisions on insolvency, amendment mechanics and the appointment of other functionaries such as auditors.
Although not compulsory, founders often complement the constitution with a private letter of wishes to guide council members on how the foundation should be administered as circumstances evolve. These letters are not binding unless the foundation provides otherwise and can be updated over time.
What is public and what remains private
The Guernsey Register of Foundations has two parts. Part A is public and includes the foundation's name and number, the names and addresses of councillors and any guardian and the registered office details. Part B contains the foundation's purpose and filings but is not public, save for disclosure with consent or where prescribed by law. Beneficial ownership information must be submitted to the Guernsey Registry on application but is not inscribed on either Part A or Part B, enhancing confidentiality while meeting regulatory expectations.
Key roles:
Founder
Founders initiate the structure by endowing it and subscribing to the constitution, appoint initial councillors and (if needed) any guardian and seek registration. They do not automatically retain ongoing powers unless expressly drafted into the rules. A founder may serve as either a councillor or a guardian (but not both at once) and can be a beneficiary. Founders may reserve certain powers - such as to amend or revoke the constitution, vary the purposes or terminate the foundation - if and only if those powers are stated in the charter. Such reserved powers lapse upon the founder's death if a natural person or after 50 years from establishment if a legal person.
Council
The council is the principal decision-making body, akin to a company's board of directors. Council members owe duties to the foundation itself, not to individual beneficiaries. A foundation must have at least two councillors unless the constitution permits a single councillor.
Resident agent
A resident agent is mandatory. This role can be fulfilled by a Guernsey-resident individual who is a foundation official (councillor or guardian) or by a corporate services provider. The resident agent's core responsibility is to ascertain the foundation's beneficial ownership and other information needed to comply with fiduciary licensing duties.
Guardian
A guardian is required where there are disenfranchised beneficiaries or where the foundation is set up for purposes rather than for individual beneficiaries. The guardian's fiduciary duty - analogous to Guernsey's trust legislation - is to the founder and beneficiaries to act in good faith and 'en bon père de famille' enforcing the constitution and purposes. The guardian may bring actions against the council unless the constitution provides otherwise and must maintain accurate records during and for six years after their guardianship. The guardian's identity appears on the public register.
Beneficiaries
Beneficiaries may be enfranchised or disenfranchised. Enfranchised beneficiaries are entitled to the constitution, records and accounts, and may apply to the Royal Court to amend purposes or revoke or dissolve the foundation. Disenfranchised beneficiaries are not, subject to the constitution, entitled to information, which can materially enhance confidentiality and control. The constitution can provide pathways for a disenfranchised beneficiary to become enfranchised. In all cases, beneficiaries do not have a proprietary interest in the foundation's assets and neither the foundation nor those appointed under the rules owe them a direct fiduciary duty, distinguishing the regime markedly from trusts.
Practical uses in private wealth and beyond
Guernsey foundations have become increasingly versatile across private wealth planning and corporate governance. Common uses include:
- charitable and philanthropic purposes;
- acting as trustee of a family's trusts, allowing family members to sit on the foundation council;
- serving as the shareholder of a private trust company;
- holding shares in an off-balance sheet commercial business;
- preserving specific or wasting assets;
- supporting estate planning; and
- acting as a corporate protector where multiple family members wish to participate in trust oversight.
Foundations can also address challenges faced by trusts in civil law jurisdictions that do not recognise the trust concept or handle it well in practice.
A compelling feature for many founders - especially those from trust-averse or trust-unfamiliar jurisdictions - is the additional element of control that can be achieved through council composition, guardian mechanisms and carefully drafted reserved powers. Because a foundation is not "owned" it can sidestep ownership characterisation issues that may arise with companies while still delivering corporate-style governance.
Regulatory oversight
The formation, management and administration of foundations in Guernsey are subject to licensing and regulation by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2020 (as amended). This framework is designed to support robust governance, AML/CFT compliance and confidence in Guernsey's fiduciary sector.
Conclusion
Guernsey foundations provide a sophisticated, flexible platform for structuring assets around beneficiaries or purposes with corporate-style governance and strong privacy features. They are particularly effective where continuity, control without ownership, cross-border recognition or purpose-led administration is required and their applications continue to evolve as families and institutions seek future-proof solutions.
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.
