A foundation is a popular entity for use in estate planning and wealth structuring, especially for individuals resident in civil law jurisdictions which do not recognise or may be unfamiliar with, the concept of trusts.
The formation process of incorporating a Jersey Foundation is similar to that of a Jersey company, as a foundation in Jersey is also an incorporated body. It requires an application to Jersey’s Registrar of Companies for incorporation / registration. Applying to form a foundation is a regulated activity, requiring a person holding a Jersey trust company business licence to act as formation agent.
Fiduchi is a regulated provider of trust and company services, and therefore experts in being able to assist you in the incorporation of your Jersey Foundation.
At Fiduchi we take a pragmatic approach to ensure your interests are safeguarded. Our director led teams will assess your needs to ensure we take into consideration all your requirements and provide you with the best advice and service required.
People often associate the word ‘foundation’ as being used to describe an organisation or entity for charitable purposes. However, its legal structure may be a company, a trust or even a partnership. In Jersey a foundation could be described as a hybrid between a trust and a company. The Jersey Foundations law enables the establishment of a foundation having the features and characteristics of either more a trust or company.
Private foundations are intended to preserve family assets which have already been acquired, and in many jurisdictions, including Jersey, they are prohibited from engaging directly in commercial trading activities unless those activities are incidental to the attainment of its objects. The objects may be charitable, non-charitable or both, and may benefit a person or class of persons and/or be set up for a specific purpose. As soon as a foundation is established it becomes independent from its founder and has its own legal personality. In a corporate context, a foundation offers many interesting possibilities, and the range of structuring options are extensive. Companies and foundations from other jurisdictions can migrate and convert to a Jersey foundation.
Unlike a company a private foundation has no equivalent to subscribers or shareholders and, unlike a trust, beneficiaries have no equitable interest in the foundation’s assets. The foundation’s guardian serves a somewhat similar oversight function to a trust’s protector (or a Jersey purpose trust’s enforcer), and the role of founder is similar to that of a trust’s settlor – the founder being the originator of the foundation.
The management functions of a Jersey foundation is performed by its Council. The foundation council must have a qualified member – a person licenced by Jersey’s financial services regulatory authority.
The flexibility of a private foundation and the protection it can provide against external claims represent distinct advantages over a traditional trust. The following are some of the principal uses of a foundation:
Each jurisdiction has its own law on private foundations and, although similarities exist when considering setting up a foundation the law of the chosen jurisdiction must be reviewed in detail as there are differences between them.
In most jurisdictions, the law merely provides the facility for setting up a private foundation, and it is the constitutional documents (the charter and regulations) that contain the particular provisions required by the founder. This allows for an extremely versatile and flexible vehicle to be created to suit the specific needs of an individual.
Careful professional drafting of these documents is required to ensure the founder’s wishes are clear and that the council fully understand the founder’s intentions.
Before incorporating a Jersey Private Foundation, you should consider the below points to ensure that it conforms to the Foundations (Jersey) Law 2009:
Heir agent or lawyer. There is no requirement for the foundation to be endowed with assets when it is initiated, and the provider of any future additions of assets does not become a founder.
A person registered under the Financial Services (Jersey) Law 1998 to carry on a trust business who applies to the Registrar for incorporation of a foundation.
The guardian may share with the foundation council the responsibility for the control of the foundation and they must act in good faith and the best interests of the beneficiaries. Overall the role is supervisory to ensure the foundation council follow the requirements of the charter and regulations. The founder can also be the guardian.
The objects of a foundation may be to benefit a person or class of persons, or the regulations may prescribe for discretionary appointment by the foundation council. A beneficiary has no interest in the foundation’s assets until they are distributed even if the constitutional documents specify the beneficiary by name and his entitlement. Beneficiaries are not entitled to receive information unless the foundation documents provide otherwise. If a beneficiary becomes entitled to a benefit under the charter or the regulations and the benefit is not provided, the beneficiary may seek an order of the Royal Court ordering the foundation to give the benefit. A founder can be a beneficiary.
The council must consist of one or more members (individuals or corporate bodies) one of which must be a qualified person (the qualified member). It has powers of management similar to the powers of a board of directors of a company. The members of the Council owe their fiduciary duty to the foundation itself. The founder can be a member of the foundation council.
The charter is a public document. It specifies the name, the objects for which it has been established (which may be charitable, non-charitable or both), details of how it will be endowed, and details of it's winding up if known. It may contain further information regarding beneficiaries and purpose but to preserve confidentiality, it may instead refer to the regulations.
This document is private and is the equivalent of a company’s articles of association. The regulations must establish the council to administer the assets and set out how decisions are to be made.
The Dubai International Finance Centre implemented a Foundation Law in 2018 providing an alternative for clients with family businesses and other assets in the Middle East. A DIFC foundation has an unlimited lifespan and must be registered with the DIFC Registrar of Companies. Its constitutional documents comprise the foundation charter and its by-laws (if issued). Although the foundation must have a registered office in the DIFC at all times, its actual administration may take place elsewhere.
Although similar to other jurisdictions, a couple of features are unique to the DIFC foundation regime. The law contains exceptional asset-protection and firewall provisions to safeguard assets from forced heirship or creditor claims based on foreign law, as long as the disposition of the assets was valid under DIFC laws. It may issue securities, including depositary receipts concerning the assets of the foundation.
Web enabled, 24/7 access to all plan information for company stakeholders
Information updated in real-time
Ability to view and filter all participants
Access to suite of pre arranged, Business Intelligence reporting
Complete management oversight and control for company
Ability to create and schedule your own reporting
"Fiduchi's Online Share Plan Administration portal, has saved time, money and paper, and [it] allows us to become more efficient in the managing of our employees share awards. It's really fantastic what an impact this platform has made."
Micheal S
Head of People - Tech startup company.
Onboarding of your data to our online platform is easy regardless if you choose a fully-managed or self-service in-house solution. By making the switch to our platform, you can upgrade from having to manage your share plan data on complicated spreadsheets. Plus, to make the process as simple as possible, our experts will assist you every step of the way and we also provide helpful guides.
For businesses who opt for our fully managed solution, our platform is able to deal with each business’s unique requirements. When it comes to dealing with exact legal and regulatory issues, our platform will be able to automatically determine the actions required for each award or vesting, specific to the country in which the company operates. Therefore minimising the risks and allowing full compliance from a legal and regulatory position.
Our platform uses the highest standards to protect the valuable data and assets we hold on behalf of our clients. Our platform provider has a team of in-house cyber security and IT professionals to protect our system and carry out security audits, due diligence, penetration testing and to oversee potential threats. They are fully regulated, accredited and certified by a range of statutory and non-statutory bodies including the US Department of Commerce’s Privacy Shield.
Our platform can be branded to match your company’s own brand, therefore becoming a professional extension of your employee benefits. You can set role-based access and let your employees and shareholders log into their own online branded share platform anytime, anywhere and see exactly what shares they have and how much they are worth. They can also easily accept grants, exercise options, calculate potential pay-outs and more.
Our experienced Private Client and Family Office teams are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced Corporate team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced Funds team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced team are here to answer any questions you may have. With a wealth of knowledge and expertise, they will be able to advise you on right solutions to meet your needs. You can rest assured that core to the Fiduchi principles are how your interests should best be met.
Our experienced employee services team are here to answer any questions you may have regarding all types of employee incentive requirements. With a wealth of knowledge and expertise, they will be able to assist in finding the best solution to achieve your business needs.
