Friday, January 11, 2013
The Guernsey Registry began accepting applications for the formation of foundations on January 9, 2012, following approval of the legislation by the UK Privy Council.
A foundation is an incorporated, self-owning, legal entity which, although having much in common with a trust, has a distinct legal personality, something that is more commonly associated with companies. A foundation has similar features to a trust in that it has a founder who is similar to a settlor, beneficiaries who have similar rights to those of a discretionary trust, and a foundation instrument and rules which are similar to a trust deed. Foundations are commonly used for wealth management, and residents of jurisdictions in the Middle and Far East are more familiar with foundations than with trusts, which tend not to exist in their legal systems.
Fiona Le Poidevin, Chief Executive of Guernsey Finance, commented:
"It's extremely pleasing to see that Guernsey's foundations legislation has been approved and the law has now come into force. Commencement of the law allows our fiduciary professionals to consider the use of a foundation as well as a trust when adopting wealth structures for their clients. Foundations may be particularly attractive to those based in civil law jurisdictions in Europe and further afield in the emerging markets of China, Russia and Latin America where the foundation concept is more familiar."
"We've been hearing from a number of industry practitioners over the past few months that there has been a great deal of interest in the Guernsey foundation. As well as clients looking to set up a foundation, much interest has come from clients who have foundations currently domiciled in other jurisdictions and are looking to migrate these to Guernsey."
"We believe Guernsey's expertise in servicing private clients means that we are especially well placed to administer complex structures due to the heritage we have in providing trust and corporate services as well as, of course, our reputation for being a well regulated and transparent international finance centre."