Eternity Law International News Private Foundation Setup

Private Foundation Setup

Published:
September 21, 2022

With more flexible mechanisms if compared to trusts, charitable or non-profit organizations are getting more and more approval because of their reduced costs, lenient regulative mechanisms, beneficial taxes, and strong security. Many individuals seeking for a structure to keep assets decide on trusts, and it’s particularly the case in Anglo-American legal systems. But private foundations setup, as applied in civil legal systems, has many benefits, and Anglo-American legal systems have recently amended laws to offer them as solutions for asset keeping or for purposes that benefit the community.

Main features of foundations

Contrary to trusts, the foundation has a legal personality and is administrated by a manager, who can often be a non-citizen or even a non-resident. The specter of legal responsibility for a trustee is mostly greater compared to a foundation manager, as the later is itself responsible for its operation. Hence, the core advantages of this vehicle are flexibility, favorable taxes, and a long list of respected jurisdictions.

Preferable jurisdictions

In general, to hold assets, investors decide on one of the below-mentioned territories:

  • The Cayman Islands;
  • Curacao;
  • the Isle of Man;
  • The Republic of Panama;
  • the Channel Islands;
  • Guernsey;
  • Liechtenstein.

Setting up private non-profit organizations: main peculiarities

  • Most above-mentioned countries have enacted and introduced laws aiming to ensure duly operation for structures in the respect of asset keeping or doing charity.
  • In all countries, a founder of a private foundation is required to pass through full Anti-Money Laundering/ Know Your Client processes to ensure a proper operation.
  • Obligations towards capital or assets do not differ a lot from country to country.
  • One of the territories with a reduced cost for formation and simplified administration obligations is Curacao.

When choosing the most suitable country for a private foundation set up, quality, time for responses and personalized, expert support offered should contribute as much to your final choice as the legal system and regulative peculiarities.

Classification of non-profit organizations

In terms of regulatory obligations, there are 2 main classes of non-taxable charitable institutions:

  1. Public charities (financed by a plethora of public sources) and
  2. Private foundations (privately financed or endowed).

Charities are freed from taxation, however, private foundations should pay at least 5% of their net investment assets every year in the form of charitable grants. This type normally directs ore regulative and supervisory regulations from authorities than public charities.

There is a condition that persons may receive tax deductions for making donates to charities to the extent of 60% of their income (AGI) for cash donates and 30% of income for gifts of appreciated assets, covering stocks and real estate. For contributions to private institutions, however, the borders are 30% of income for contributions and 20% of income for appreciated assets.

Please contact us to get more information.

You can see our current offers in the categories “Cryptocoins and licensing of cryptocurrency operations”, “Ready-made companies”, “Banks for sale” and “Licenses for sale”.

You could be interested

AEMI license in Lithuania

Today we will talk about a state that 2 years ago regulated the procedure of getting an AEMI permission. Businessmen who have decided to operate in this area and want to obtain a license for a remittance system in the country will now be able to remotely register accounts for their clients. A license for...

Initial placement of coins or ICO from the point of view of Swiss law

The initial placement of coins, or, as it is also called ICO in Switzerland, just like the launch of a token, is considered an unregulated method of attracting investment into a project. In fact, it is the issue of digital coins or tokens that are used to create a new cryptocurrency or are created based...

Gaming License in Gibraltar

Situated at the southern edge of the Iberian Peninsula, Gibraltar is not only recognized for its iconic Rock of Gibraltar but also for its prominent presence in the global gaming industry. Under the governance of the Gibraltar Regulatory Authority (GRA), gaming activities are regulated to ensure fairness and security. In this comprehensive guide, we embark...

Experience

Our experts in international law, tax planning, banking and payment solutions, who work for more than 10 years, lawyers, tax and bank consultants, know the specifics of their work.

Cryptoasset registration in UK

Cryptoasset businesses can now register with FCA in UK and provide their services to clients in Europe Just like the popular Estonian Crypto licence, the new format will enable fiat to crypto exchange and cryptocurrency being placed in e-wallets All existing UK cryptoasset businesses must register with the FCA by 10 January 2021. New cryptoasset...

Top 8 Best Offshore Jurisdictions for Forex

As a forex trader, you are constantly looking for ways to optimize your trading strategy and increase your profits. A possible way to do this is to consider tax havens for your FX business. For offshore foreign businesses, there are tax advantages, reduced regulations, and increased privacy. Let’s take a look at the best offshore...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

Washington

1629 K St. Suite 300 N.W.

Vilnius

Gediminas Avenue, 44A

Tallinn

Kesklinna linnaosa, Tuukri 19

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Riga

Esplanade, 7 floor

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard

Sydney

20 Martin Place

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7