Setting up a Foundation

A foundation is a non-profit organisation that supports charitable activities for the common good. They are typically created with money donated by individuals, families or corporations, which is then used to make grants or operate programmes with the income earned from investing this money. When setting up a foundation, you should consider:

1.Much like a corporation, a foundation is considered a legal entity, and its details are available for viewing on public registers. The main difference between a foundation and a corporation is that a foundation does not have any shareholders. By setting up a foundation, assets held in its name are to be used for purposes clearly defined in its constitutive documents. The administration and operation of the foundation is set out in contracts, not fiduciary principles.

2. A foundation may be legally limited by mandate from the foundation donor in terms of where its charitable donations may be placed. When setting up a foundation, it is important to note that some foundations may be restricted to providing donations to specific causes or geographical areas.

3. When setting up a foundation, it is important to select the jurisdiction carefully. A number of factors need to be considered when choosing the jurisdiction, including:

• Will the courts in that jurisdiction recognise a ruling from the court of your residence or citizenship?
• The jurisdiction must have the confidentiality or transparency laws you need
• The assets must be properly secured
• The jurisdiction must be politically stable.
• Is the jurisdiction black listed by the Organisation for Economic Co-operation and Development (OECD)?

4. When setting up a foundation, it is key to set out its goals and operations clearly. Since the administration of the foundation is based on purely contractual obligations, these contracts must be completely tight and protected.

5. The contributions raised in operating the entity must be deemed tax deductible in order to qualify as a foundation. setting up a foundation which is private is an efficient and flexible solution, as donors may receive an instant tax deduction for donations promised for the future.

6. The procedure of setting up a foundation, and administering it, is stricter than that of a public charity. In some jurisdictions a foundation may be required to divest a percentage of the year-end fair market value of its assets, or pay an excise tax on earnings.

If you are considering setting up a foundation, Healy Consultants can help you reach your goals - whether they are charitable or financial. A well-structured foundation in the right jurisdiction is a great way to achieve these ambitions.

Healy Consultants' Fees for Setting Up a Foundation

Our fees vary according to the jurisdiction of the foundation. For further information, follow this link.

Contact Us

For more information on foundations, email email@healyconsultants.com or telephone us at (+65) 6735 0120.

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