Foundations Law Comparison

Introduction

The Foundations (Guernsey) Law, 2012, came into effect in January 2013.

Guernsey has some 50 years’ experience in providing trust and corporate services and the island was among the first jurisdictions globally to regulate its fiduciary sector. The introduction of the Guernsey Foundation adds another item to the menu of options which practitioners in the island can use to best meet the needs of their clients.

In particular, it provides an alternative to the common law concept of the trust. As such, the Guernsey Foundation is expected to be particularly attractive to clients in the civil law jurisdictions of not just Europe but also further afield in terms of the ‘emerging’ markets of Asia, in particular China, as well as Russia and Latin America.

In addition, it is anticipated that the specific legislative drafting of the Guernsey Foundation will mean that it is able to provide clients with benefits above and beyond those available from the structures already on offer in the market.

Basics

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Law

The Foundations (Guernsey) Law, 2012.

Law

Foundations (Jersey) Law 2009 (as amended, 2015).

Law

Persons and Companies Act, 1926 (as amended, 2008), Art. 552 §§1-43.

Law

Private Interest Foundation Law 1995.

Regulator

Guernsey Financial Services Commission.

Regulator

Jersey Financial Services Commission.

Regulator

Charitable foundations are supervised by the Liechtenstein Public and Land Registry (Family foundations are generally unregulated).

Regulator

Panamanian Public Registry.

Minimum assets

Any property comprising initial endowment.

Minimum assets

Does not require an initial endowment.

Minimum assets

Assets or cash with the value of CHF/€/US$30,000.

Minimum assets

Assets or cash with the value of US$10,000.

Registration fee

£100 for a registration within 24 hours; £350 within two hours.

Registration fee

£200 (or £400 for a ‘same day’ incorporation).

Registration fee

Registration is only compulsory in the case of charitable foundations (CHF700). Family foundations need not be registered (and therefore their existence is not a matter of public record), although the foundation’s core information (date of establishment, objects, members of the foundation board, legal representative) need to be submitted to the registrar (CHF300). Stamp duty may also be due, in the case of family foundations this amounts to 2% (subject to a min of CHF200 and a max CHF250,000).

Registration fee

US$350.

Requirements

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Required documents

Charter & Rules.

Required documents

Charter & Regulations.

Required documents

Charter (‘Statutes’). Separate regulations if provided for in Charter.

Required documents

Charter.

Required parties

  • Founder
  • Council
  • Guardian – only required if there are disenfranchised beneficiaries
  • Beneficiaries / Purposes
  • Resident agent – if neither a councillor nor a guardian are Guernsey licensed fiduciaries

Required parties

  • Founder
  • Council (including at least one Qualified Member)
  • Guardian
  • Beneficiaries / Purposes

Required parties

  • Founder
  • Council Member (at least two)
  • Protector/Supervisory Body (optional)
  • Auditor (for supervised foundations)
  • Beneficiaries / Purposes

Required parties

  • Founder
  • Council Member (at least one corporate member or three individuals)
  • Beneficiaries / Purposes
  • Local agent (compulsory)
  • Protector / Supervisory Body (optional)

Annual fees

£500 except if a Guernsey-registered charity, which is £0.

Annual fees

£150 plus £100/£200 to be registered as an ISE for GST purposes.

Annual fees

Annual corporate income tax of 12.5% on its net income with a minimum of CHF1,200.

Annual fees

US$400 administration fee paid to the government.

Request for local representation

If neither a councillor of the foundation nor a guardian of the foundation are Guernsey licensed fiduciaries, the foundation must appoint a "resident agent". The resident agent must be both a Guernsey licensed fiduciary and resident in Guernsey. Such resident agent has powers to inspect foundation documents and information. Only a Guernsey licensed fiduciary may apply to register a foundation.

Request for local representation

The Jersey Law requires that there is a qualified person on the foundation’s council (the "Qualified Member"). A qualified person is a person licensed under the Jersey Financial Services Commission (Jersey) Law 1998 to conduct foundations business. Only a Jersey licensed fiduciary may apply to register a foundation.

Request for local representation

At least one member of the foundation’s council that is authorised to manage and represent the foundation must be a qualified professional with place of residence in Liechtenstein or another Member state of the European Economic Area.

Request for local representation

There is nothing under the Panamanian Law that states that there must be a person who is regulated involved in the governance of the foundation.

Protector / Guardian

A Guardian is required only where there are no beneficiaries (i.e. the foundation is for a purpose only) or where the beneficiaries are disenfranchised i.e. they do not have a right to trust information. Both the founder and body corporates are able to be appointed as guardians.

Protector / Guardian

A Guardian is required. The Guardian has a monitoring function to ensure the foundation’s council carries out its functions. The Qualified Member or the Founder (but no other council member) may act as the Guardian of the foundation. A protector is optional.

Protector / Guardian

Optional.

Protector / Guardian

Optional. The law contains a non-exhaustive list of powers which may be conferred on a protector / supervisory body.

Continuation - Mergers

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Continuation

An overseas foundation (i.e. a foundation with legal personality registered or established under a law other than Guernsey law) may apply to be registered as a Guernsey foundation.

Application for migration into Guernsey – £100; application for migration from Guernsey – £1,500.

Continuation

Bahamas Foundations, Liechtenstein Foundations, Panama Private Interest Foundations, St Kitts Foundations, Nevis Multiform Foundations, Maltese Foundations and Jersey companies (each a ‘Recognised Entity’) may continue as Jersey foundations (and vice versa) for an administrative charge of £500.

Continuation

A Liechtenstein foundation may redomicile to/ continue in, a foreign jurisdiction. There is a charge of CHF700.

Continuation

A Panama foundation may redomicile to/continue in, a foreign jurisdiction.

Mergers

There is no ability for a Guernsey foundation to merge with any other entity.

Mergers

There is ability for:

  • Two or more Jersey foundations to merge; and
  • One or more Jersey foundations to merge with one or more Recognised Entities.

Mergers

There is no ability for a Liechtenstein foundation to merge with any other entity, although it may be converted into an Anstalt or a Treuunternehmen with legal personality.

Mergers

There is no ability for a Panamanian foundation to merge with any other entity.

Beneficiaries and public information

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Beneficiaries’ right to information

Generally beneficiaries have a right to information. However this can be restricted such that the beneficiaries are "disenfranchised". If a Guernsey Foundation has disenfranchised beneficiaries a guardian is required.

Beneficiaries’ right to information

No, unless the charter or regulations explicitly provide otherwise.

A "person of standing" (which includes a beneficiary) may however, make an application to the Royal Court for the terms of a foundation to be properly enforced.

Beneficiaries’ right to information

In the case of a revocable foundation, the beneficiaries have no information rights. In addition, the Liechtenstein Law contains possibilities to restrict the information rights of beneficiaries by transferring those rights to other bodies such as an internal controlling body (similar to a protector) to carry out supervisory duties.

In such cases, the rights of the beneficiaries can be limited to an indefeasible minimum (their own rights, the foundation’s purpose, the organisation of the foundation). In the case of charitable foundations, which are generally subject to the supervision of the authorities, the beneficiaries have no information rights.

Beneficiaries’ right to information

The rights of the beneficiaries are set down in the foundation charter or By-Laws, or by resolutions passed by the foundation’s council.

Publicly available information

Only "Part A" of the register is publicly available. This records the name and registered number of the foundation, the name and address of the councillors and the guardian (if any) and the details of the registered office. As part of the registration process the charter must also be filed with the registrar but may only be disclosed in certain circumstances (eg as part of criminal investigations).

Publicly available information

The charter is the only document that is publicly available.

Publicly available information

The charter of a private foundation is not a public document (unless the foundation requests to be registered).

Publicly available information

The charter is the only document that is publicly available.

Charitable / Philanthropic purposes

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Charitable / Philanthropic purposes permitted

Yes

Charitable / Philanthropic purposes permitted

Yes

Charitable / Philanthropic purposes permitted

Yes

Charitable / Philanthropic purposes permitted

Yes

Time period

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Time period

None

Time period

None

Time period

None

Time period

None

Corporate body

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Corporate body as founder / protector / council member

A corporate body may act as a founder, councillor or guardian.

Corporate body as founder / protector / council member

A corporate body may act as founder, council member (whether Qualified Member or not) and Guardian.

Corporate body as founder / protector / council member

A corporate entity may act as a Founder, Protector or a Council member.

Corporate body as founder / protector / council member

A corporate body may act as a Founder or as a Council member.

Reservation of powers

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

Reservation of powers

Subject to the terms of the constitution, certain powers can be reserved i.e. to amend, revoke or vary the terms of the constitution including its purposes and to terminate the foundation – limited to the duration of a founder’s life, or where a corporate founder, 50 years from creation of the foundation.

Reservation of powers

In principle there is complete flexibility – the terms of the charter and regulations can provide that any particular power or powers of the foundation may either be reserved to or subject to the veto of the founder or any other person.

Reservation of powers

Subject to the terms of the charter, an individual (as opposed to corporate) founder may reserve certain powers i.e. to amend, revoke or vary the terms of the constitution including its purposes and to terminate the foundation – limited to the duration of the founder’s life.

Reservation of powers

No express provisions contained in the law.

General duties

Guernsey

GMT

Jersey

GMT

Liechtenstein

GMT +1

Panama

GMT -5

General duties

Councillors have a duty to the foundation to act in good faith in the exercise of their functions. Guardians owe a duty to the founder and beneficiaries to act in good faith and en bon père de famille to enforce the constitution and the purpose and in the exercise of their functions.

General duties

The members of the council have no fiduciary duties to the beneficiaries of the foundation. Their duty is to administer the foundation in accordance with its objects (as set out in the charter). The role of the Guardian is to ensure that the council performs its role properly. The role of the Qualified Member involves ensuring that the foundation is not used for criminal purposes, such as money laundering.

General duties

The members of the council owe no fiduciary duties to the beneficiaries of the foundation. Their duties are owed to the foundation. Their duty is to administer the foundation in accordance with its objects (as set out in the charter). Professionals may not limit their liability.

General duties

Subject to the terms of the charter, the foundation council is accountable to the beneficiaries and any protector/supervisory body. A beneficiary may challenge any acts of the foundation that may damage the rights conferred upon him/her, either by applying to the protector/supervisory body (if any) or the court.

Introduction

The Foundations (Guernsey) Law, 2012, came into effect in January 2013.

Guernsey has some 50 years’ experience in providing trust and corporate services and the island was among the first jurisdictions globally to regulate its fiduciary sector. The introduction of the Guernsey Foundation adds another item to the menu of options which practitioners in the island can use to best meet the needs of their clients.

In particular, it provides an alternative to the common law concept of the trust. As such, the Guernsey Foundation is expected to be particularly attractive to clients in the civil law jurisdictions of not just Europe but also further afield in terms of the ‘emerging’ markets of Asia, in particular China, as well as Russia and Latin America.

In addition, it is anticipated that the specific legislative drafting of the Guernsey Foundation will mean that it is able to provide clients with benefits above and beyond those available from the structures already on offer in the market.

  • Guernsey

    GMT

    Law

    The Foundations (Guernsey) Law, 2012.

    Regulator

    Guernsey Financial Services Commission.

    Minimum assets

    Any property comprising initial endowment.

    Registration fee

    £100 for a registration within 24 hours; £350 within two hours.

  • Jersey

    GMT

    Law

    Foundations (Jersey) Law 2009 (as amended, 2015).

    Regulator

    Jersey Financial Services Commission.

    Minimum assets

    Does not require an initial endowment.

    Registration fee

    £200 (or £400 for a ‘same day’ incorporation).

  • Liechtenstein

    GMT +1

    Law

    Persons and Companies Act, 1926 (as amended, 2008), Art. 552 §§1-43.

    Regulator

    Charitable foundations are supervised by the Liechtenstein Public and Land Registry (Family foundations are generally unregulated).

    Minimum assets

    Assets or cash with the value of CHF/€/US$30,000.

    Registration fee

    Registration is only compulsory in the case of charitable foundations (CHF700). Family foundations need not be registered (and therefore their existence is not a matter of public record), although the foundation’s core information (date of establishment, objects, members of the foundation board, legal representative) need to be submitted to the registrar (CHF300). Stamp duty may also be due, in the case of family foundations this amounts to 2% (subject to a min of CHF200 and a max CHF250,000).

  • Panama

    GMT -5

    Law

    Private Interest Foundation Law 1995.

    Regulator

    Panamanian Public Registry.

    Minimum assets

    Assets or cash with the value of US$10,000.

    Registration fee

    US$350.

  • Guernsey

    GMT

    Required documents

    Charter & Rules.

    Required parties

    • Founder
    • Council
    • Guardian – only required if there are disenfranchised beneficiaries
    • Beneficiaries / Purposes
    • Resident agent – if neither a councillor nor a guardian are Guernsey licensed fiduciaries

    Annual fees

    £500 except if a Guernsey-registered charity, which is £0.

    Request for local representation

    If neither a councillor of the foundation nor a guardian of the foundation are Guernsey licensed fiduciaries, the foundation must appoint a "resident agent". The resident agent must be both a Guernsey licensed fiduciary and resident in Guernsey. Such resident agent has powers to inspect foundation documents and information. Only a Guernsey licensed fiduciary may apply to register a foundation.

    Protector / Guardian

    A Guardian is required only where there are no beneficiaries (i.e. the foundation is for a purpose only) or where the beneficiaries are disenfranchised i.e. they do not have a right to trust information. Both the founder and body corporates are able to be appointed as guardians.

  • Jersey

    GMT

    Required documents

    Charter & Regulations.

    Required parties

    • Founder
    • Council (including at least one Qualified Member)
    • Guardian
    • Beneficiaries / Purposes

    Annual fees

    £150 plus £100/£200 to be registered as an ISE for GST purposes.

    Request for local representation

    The Jersey Law requires that there is a qualified person on the foundation’s council (the "Qualified Member"). A qualified person is a person licensed under the Jersey Financial Services Commission (Jersey) Law 1998 to conduct foundations business. Only a Jersey licensed fiduciary may apply to register a foundation.

    Protector / Guardian

    A Guardian is required. The Guardian has a monitoring function to ensure the foundation’s council carries out its functions. The Qualified Member or the Founder (but no other council member) may act as the Guardian of the foundation. A protector is optional.

  • Liechtenstein

    GMT +1

    Required documents

    Charter (‘Statutes’). Separate regulations if provided for in Charter.

    Required parties

    • Founder
    • Council Member (at least two)
    • Protector/Supervisory Body (optional)
    • Auditor (for supervised foundations)
    • Beneficiaries / Purposes

    Annual fees

    Annual corporate income tax of 12.5% on its net income with a minimum of CHF1,200.

    Request for local representation

    At least one member of the foundation’s council that is authorised to manage and represent the foundation must be a qualified professional with place of residence in Liechtenstein or another Member state of the European Economic Area.

    Protector / Guardian

    Optional.

  • Panama

    GMT -5

    Required documents

    Charter.

    Required parties

    • Founder
    • Council Member (at least one corporate member or three individuals)
    • Beneficiaries / Purposes
    • Local agent (compulsory)
    • Protector / Supervisory Body (optional)

    Annual fees

    US$400 administration fee paid to the government.

    Request for local representation

    There is nothing under the Panamanian Law that states that there must be a person who is regulated involved in the governance of the foundation.

    Protector / Guardian

    Optional. The law contains a non-exhaustive list of powers which may be conferred on a protector / supervisory body.

  • Guernsey

    GMT

    Continuation

    An overseas foundation (i.e. a foundation with legal personality registered or established under a law other than Guernsey law) may apply to be registered as a Guernsey foundation.

    Application for migration into Guernsey – £100; application for migration from Guernsey – £1,500.

    Mergers

    There is no ability for a Guernsey foundation to merge with any other entity.

  • Jersey

    GMT

    Continuation

    Bahamas Foundations, Liechtenstein Foundations, Panama Private Interest Foundations, St Kitts Foundations, Nevis Multiform Foundations, Maltese Foundations and Jersey companies (each a ‘Recognised Entity’) may continue as Jersey foundations (and vice versa) for an administrative charge of £500.

    Mergers

    There is ability for:

    • Two or more Jersey foundations to merge; and
    • One or more Jersey foundations to merge with one or more Recognised Entities.
  • Liechtenstein

    GMT +1

    Continuation

    A Liechtenstein foundation may redomicile to/ continue in, a foreign jurisdiction. There is a charge of CHF700.

    Mergers

    There is no ability for a Liechtenstein foundation to merge with any other entity, although it may be converted into an Anstalt or a Treuunternehmen with legal personality.

  • Panama

    GMT -5

    Continuation

    A Panama foundation may redomicile to/continue in, a foreign jurisdiction.

    Mergers

    There is no ability for a Panamanian foundation to merge with any other entity.

  • Guernsey

    GMT

    Beneficiaries’ right to information

    Generally beneficiaries have a right to information. However this can be restricted such that the beneficiaries are "disenfranchised". If a Guernsey Foundation has disenfranchised beneficiaries a guardian is required.

    Publicly available information

    Only "Part A" of the register is publicly available. This records the name and registered number of the foundation, the name and address of the councillors and the guardian (if any) and the details of the registered office. As part of the registration process the charter must also be filed with the registrar but may only be disclosed in certain circumstances (eg as part of criminal investigations).

  • Jersey

    GMT

    Beneficiaries’ right to information

    No, unless the charter or regulations explicitly provide otherwise.

    A "person of standing" (which includes a beneficiary) may however, make an application to the Royal Court for the terms of a foundation to be properly enforced.

    Publicly available information

    The charter is the only document that is publicly available.

  • Liechtenstein

    GMT +1

    Beneficiaries’ right to information

    In the case of a revocable foundation, the beneficiaries have no information rights. In addition, the Liechtenstein Law contains possibilities to restrict the information rights of beneficiaries by transferring those rights to other bodies such as an internal controlling body (similar to a protector) to carry out supervisory duties.

    In such cases, the rights of the beneficiaries can be limited to an indefeasible minimum (their own rights, the foundation’s purpose, the organisation of the foundation). In the case of charitable foundations, which are generally subject to the supervision of the authorities, the beneficiaries have no information rights.

    Publicly available information

    The charter of a private foundation is not a public document (unless the foundation requests to be registered).

  • Panama

    GMT -5

    Beneficiaries’ right to information

    The rights of the beneficiaries are set down in the foundation charter or By-Laws, or by resolutions passed by the foundation’s council.

    Publicly available information

    The charter is the only document that is publicly available.

  • Guernsey

    GMT

    Charitable / Philanthropic purposes permitted

    Yes

  • Jersey

    GMT

    Charitable / Philanthropic purposes permitted

    Yes

  • Liechtenstein

    GMT +1

    Charitable / Philanthropic purposes permitted

    Yes

  • Panama

    GMT -5

    Charitable / Philanthropic purposes permitted

    Yes

  • Guernsey

    GMT

    Time period

    None

  • Jersey

    GMT

    Time period

    None

  • Liechtenstein

    GMT +1

    Time period

    None

  • Panama

    GMT -5

    Time period

    None

  • Guernsey

    GMT

    Corporate body as founder / protector / council member

    A corporate body may act as a founder, councillor or guardian.

  • Jersey

    GMT

    Corporate body as founder / protector / council member

    A corporate body may act as founder, council member (whether Qualified Member or not) and Guardian.

  • Liechtenstein

    GMT +1

    Corporate body as founder / protector / council member

    A corporate entity may act as a Founder, Protector or a Council member.

  • Panama

    GMT -5

    Corporate body as founder / protector / council member

    A corporate body may act as a Founder or as a Council member.

  • Guernsey

    GMT

    Reservation of powers

    Subject to the terms of the constitution, certain powers can be reserved i.e. to amend, revoke or vary the terms of the constitution including its purposes and to terminate the foundation – limited to the duration of a founder’s life, or where a corporate founder, 50 years from creation of the foundation.

  • Jersey

    GMT

    Reservation of powers

    In principle there is complete flexibility – the terms of the charter and regulations can provide that any particular power or powers of the foundation may either be reserved to or subject to the veto of the founder or any other person.

  • Liechtenstein

    GMT +1

    Reservation of powers

    Subject to the terms of the charter, an individual (as opposed to corporate) founder may reserve certain powers i.e. to amend, revoke or vary the terms of the constitution including its purposes and to terminate the foundation – limited to the duration of the founder’s life.

  • Panama

    GMT -5

    Reservation of powers

    No express provisions contained in the law.

  • Guernsey

    GMT

    General duties

    Councillors have a duty to the foundation to act in good faith in the exercise of their functions. Guardians owe a duty to the founder and beneficiaries to act in good faith and en bon père de famille to enforce the constitution and the purpose and in the exercise of their functions.

  • Jersey

    GMT

    General duties

    The members of the council have no fiduciary duties to the beneficiaries of the foundation. Their duty is to administer the foundation in accordance with its objects (as set out in the charter). The role of the Guardian is to ensure that the council performs its role properly. The role of the Qualified Member involves ensuring that the foundation is not used for criminal purposes, such as money laundering.

  • Liechtenstein

    GMT +1

    General duties

    The members of the council owe no fiduciary duties to the beneficiaries of the foundation. Their duties are owed to the foundation. Their duty is to administer the foundation in accordance with its objects (as set out in the charter). Professionals may not limit their liability.

  • Panama

    GMT -5

    General duties

    Subject to the terms of the charter, the foundation council is accountable to the beneficiaries and any protector/supervisory body. A beneficiary may challenge any acts of the foundation that may damage the rights conferred upon him/her, either by applying to the protector/supervisory body (if any) or the court.