Types of Offshore Foundations

Popular types of Offshore Foundations

When a foundation is established in an offshore jurisdiction, no local taxes are applied on income, capital gains or inheritance, provided that domiciled residents of the jurisdiction of choice are not recipients of the foundation's income or assets.

Private foundations differ from offshore companies because they cannot engage directly in commercial activity, however, they can own investments such as property, stocks bonds and companies. There are several important offshore foundation types:

Lichtenstein 'Steiftung' Foundation:

Is the oldest offshore foundation structure and has traditionally been used for family tax planning purposes. The owner's identities can remain anonymous and once the assets are placed within the foundation they are property of the foundation and therefore they cannot be claimed by debtors.

Panamanian Private Interest Foundation (PPIF):

Is a type of private foundation based on the Lichtenstein 'Steiftung' foundation. Like the Lichtenstein foundation, it has no owners and therefore the assets of the PPIF cannot be claimed if the founder, council members, protector and beneficiaries have unpaid debts outstanding. Panamanian law also states that the assets of a foundation are non-freezable if they have been in the foundation for more than three years.

Foundations based on the Panamanian Foundation are available across the globe. Jurisdictions such as Nevis, St Kitts, and the Bahamas have recently introduced foundations into their legal systems to reflect their popularity.