The word Foundation is generally automatically perceived as a charitable or non-profit making organization. In fact only a small percentage of all foundations are charitable. Most foundations are set up for the protection of the founders' assets and as a tax benefit.

The actual legalities of a foundation determine that there is no obligation to be a charitable organisation. The speciality of a foundation is that it has no actual owners but only a board of officers. This fact seems to be a minor juridical issue but actually it is of utmost importance. Once assets have been placed into the foundation the founder does not legally own them or have a requirement to declare them. He neither owns the foundation. This is of particular interest in cases of bankruptcy, divorce or third party claims. All types of assets can be owned by a foundation such as bonds, stocks, real estate and even patents or rights. Using a regular company structure there would always be a beneficial owner in the background and especially relatives could be informed about that. With a foundation there is legally no owner and even if somebody knows of a connection between founder and foundation, he can not  access the property of the foundation.


Due to the fact that a foundation is a corporate body it allows easy controlling. The term of the foundation in unlimited and certain requirements or specifications may be fixed in the articles. These specifications can not be altered or revoked at any time, even after the death of the founder. This ensures that the founders funds are only ever granted to whom he states.

A foundation is not formed in order to conduct business. It is made to manage and protect it's own assets. However it is a very common and useful structure to have a foundation as owner of an offshore corporation. The profit of the corporation is regularly transferred to the foundation but should a bankruptcy of the corporation occur, it would not affect the foundation at all.

Advantages in forming a Foundation

The Founder can transfer any assets he has into the foundation and legally   declare he does not own them

No assets that belong to the Foundation can be seized

Potential inheritors can not make claims against the Foundation

Foundations are free from taxation

Foundations are not required to be charitable or non-profit making organizations