Luxembourg companies

Foundations in Luxembourg

Foundations in Luxembourg are separate legal entities without members or shareholders, established to reflect the wishes of the founder, who may be an individual or a corporate entity. These wishes are contained within the Foundation's Charter and Regulations. Foundations in Luxembourg can be established for a fixed or indefinite period of time and can be used for charitable, commercial or family purposes.

There are three basic components that make up a Luxembourg Foundation:

Founder– (the person who gifts assets to the Foundation)

Foundation Council–(the officers who manage the Foundation)

Beneficiaries– (the individuals or institutions that benefit from the Foundation assets)

Advantages of setting up a Bahamian Foundation:

The Founder establishes the Foundation for a specific purpose. The purposes are contained within the Foundation Charter and articles. The Founder then appoints a Foundation Council to oversee and manage the Foundations assets in accordance with his/her wishes. From time to time the Foundation Council as directed would distribute the assets, or a proportion thereof to the beneficiaries.

Uses of Bahamian Foundations:

  • Private relationship: For example, the founder’s wishes are not publicly registered
  • Wealth protection
  • Recognized in all common and civil law jurisdictions
  • Holding assets which can be passed on from one generation to the next (estate planning)
  • Inheritance tax planning
  • Avoidance of forced heirship rules
  • Maintenance of corporate control
  • Separation of voting and economic benefits
  • Employee share option schemes
  • Pension funds
  • Art collections
  • Charitable purposes
  • An important tool in international income, capital gains and estate tax planning
  • Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements

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