Like a trust, a foundation is a separate legal entity; however, it has no members or shareholders and is not administered by a trustee. They are usually set-up to reflect the demands of the founder, who may be an individual or a corporate entity. A foundation has a founder, protector, beneficiary and council members. Foundations can be established for a fixed or perpetual period of time and can be used for commercial, individual or charitable purposes.
Foundations are generally used where trusts are not recognised by a particular jurisdiction (i.e. non common law jurisdiction) and are popular vehicles to structure asset ownership by individuals or corporations. Foundations are similar corporate entities but derive the same protections and perpetuity that offshore trusts provide, without the requirement to appoint a trustee. They are governed in a similar fashion to corporate entities however they cannot conduct direct commercial activity and the founders identities can remain anonymous.