The Bahamas Foundations Act, 2004 (later amended in 2007)
relating to the appointment of a foundation agent, foundation
council and the rights of a beneficiary, is a relatively
little-known private wealth vehicle. Over the years, we have seen
that certain instruments originating from common law jurisdictions
may not be recognized in civil law jurisdictions, but foundations
are a dependable option due to their non-recognition, meaning
they're not subject to forced heirship statutes applied by
civil law countries.
Foundations are often referred to as a "hybrid," a term
used because this instrument has attributes of a trust as well as a
company.
Here are the similarities of a foundation to a trust:
Trust |
Foundation |
|
Has a settlor |
The founder is similar to the settlor |
|
Settlor can have reserved powers |
Founder can have reserved powers |
|
Can be revoked |
Can be revoked |
|
Can be amended |
Can be amended |
|
Must have objects (assets) |
Must have objects (assets) |
|
Must have beneficiaries |
Must have beneficiaries |
|
No perpetuity period |
No perpetuity period |
|
May have a protector |
May have a protector |
|
After death of the settlor, probate is not necessary |
After death of the founder, probate is not necessary |
And here are the similarities of a foundation to a company:
Company |
Foundation |
| Is a legal entity | Is a legal entity |
| Incorporated at the Registry | Established at the Registry |
| May have Officers | May have Officers |
| Board of Directors | Council Members are similar to Directors |
| Can be audited | Can be audited |
| Memorandum & Articles of Incorporation | Charter is the equivalent to the Memorandum & Articles of Incorporation |
Coupled with the Bahamas' stable regulatory framework, foundations are an untapped and practical private wealth option. Get in touch with an expert below to learn more.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.