Foundations in Bahamas
A foundation is a legal entity on its own. It is a fundamental tool in estate planning. The Bahamas is the first premier Common Law jurisdiction to introduce foundations. Foundations are great tools for tax planning, asset protection, preservation of family wealth and confidentiality, segregation of assets and establishing charities.
Foundations combines several features of trusts and companies; like a trust, a foundation is established by a will or charter, and its executed by a founder, a natural person or a corporate body. Like a company, a foundation is a independent legal entity, has limited liability and unlimited duration.
Advantages of setting up a Bahamian Foundation:
- Can be used for several purposes; commercial, private or for charity
- The Bahamas has a strong asset protection law, which benefits foundations formed within the territory
- No requirements for external audits, unless the charter instructs it
- Founders can be nominee
- No residence requirements for the foundation council
- The foundation can have a protector, whom is a supervisory person over the foundation council
- The founder may assign his/her preserved powers
- The Bahamas allows redomiciliation of a foundation formed elsewhere, and viceversa
- No direct taxes in The Bahamas, ideal for international transactions, estate and inheritance planning.
Uses of Bahamian Foundations:
- To invest in family companies
- To own a private trust company
- To provide for the philanthropic purposes
- To separate voting and economic benefits
- To provide for an employee share option scheme
- To perpetuate a particular corporate governance philosophy
- To hold the benefit of warranties collateral
- To hold assets off balance sheet in connection with the securitization of mortgages, etc.
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