Since the introduction of the Foundations (Jersey) Law 2009, more than 400 Jersey Foundations have been established.
A Jersey Foundation in overview
Jersey Foundations are unique and do not have an exact equivalent in other jurisdictions but do offer certain benefits of traditional companies and trusts, whilst being constructed to eliminate some of the key constraints. It is similar to a company in that it has separate legal personality and has a Council to administer its business, just like a board of directors.
Unlike a company, a Foundation does not have shareholders and contrary to the position of a trust, there are no beneficiaries who have an interest in the Foundation's assets or who are owed a fiduciary duty. Consequently, a Foundation does not have any owners and is regarded as an 'orphan entity'.
What are they used for?
Private wealth management
structures/philanthropy
Over a third of those established so far are understood to have
charitable purposes
Asset protection/succession planning
Families can use Foundations to ring-fence certain assets, avoid
forced heirship rules or succession challenges and make provision
for how family wealth should be disseminated
Maintenance of corporate control
Family businesses are often led by elder members of the family and
it can be beneficial for succession planning purposes to ensure the
continuity of the family businesses that they be held by
independent vehicles, such as a Foundation
Ownership of private trust companies
As an alternative structure to family businesses being owned and
directly held in a Foundation, the Foundation could instead own the
shares in an SPV trustee company ("PTC") which would, in
turn, own the family businesses through a conventional trust
arrangement. This may also assist with the tax status of the
PTC
Separate ownership
The Foundation is a useful option as an 'orphan' entity for
structures that require an SPV with no connected ownership,
including securitisation. Foundations are also registered and
identifiable where required for third party certainty (as opposed
to trusts which are unregistered)
Pensions/employee benefits
The benefit of a Foundation in this area can be the ability to own
assets in its own name but also not have to overlay trusts concepts
to the holding of assets and beneficiaries
Download : Jersey Foundations
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.