Foundations

The Establishment & Administration of Jersey Foundations, Private Family Foundations, Corporate Foundations, Charitable Foundations & more.

A foundation is a popular entity for use in estate planning and wealth structuring, especially for individuals resident in civil law jurisdictions which do not recognise or may be unfamiliar with, the concept of trusts.

Foundations are a relatively recent addition to Jersey’s wealth structuring toolkit, introduced under the Foundations (Jersey) Law 2009. While they share similarities with civil law foundations, Jersey foundations are increasingly favoured by international families seeking a robust and flexible vehicle for holding wealth across generations. They are particularly well suited to long-term succession planning, philanthropic initiatives, and bespoke governance arrangements.

At Fiduchi, our director-led teams provide expert support with the drafting of the foundation’s constitutional documents, as well as its establishment, asset transfers, and ongoing administration.

Establishment of a Jersey Foundation - How Fiduchi can help

The formation process of incorporating a Jersey Foundation is similar to that of a Jersey company, as a foundation in Jersey is also an incorporated body. It requires an application to Jersey’s Registrar of Companies for incorporation / registration. Applying to form a foundation is a regulated activity, requiring a person holding a Jersey trust company business licence to act as formation agent.

Fiduchi is a regulated provider of trust and company services, and therefore experts in being able to assist you in the incorporation of your Jersey Foundation.

Incorporation of a Jersey foundation requires an application to Jersey’s Registrar of Companies. As the formation of a foundation is a regulated activity under Jersey law, only a licensed trust company business may act as the formation agent.

Fiduchi is a regulated provider of trust and company services with extensive experience in the formation and administration of Jersey foundations.

We will take a pragmatic, personalised approach—assessing your specific needs to ensure your interests are protected at every stage. From support with the initial structuring advice to incorporation and ongoing administration, we provide expert, tailored support throughout.

What is a Private Foundation?

The term “foundation” is often associated with charitable organisations, but its meaning varies across jurisdictions. In Jersey, a foundation is a distinct legal entity introduced by the Foundations (Jersey) Law 2009. It combines features of both trusts and companies - like a trust, it is used to hold assets for specific purposes or beneficiaries, but like a company, it has separate legal personality. A Foundation is managed by a council rather than by trustees or a board of directors. This hybrid structure makes Jersey foundations particularly attractive for succession planning, philanthropy, and private wealth management.

Private foundations are intended to preserve family assets which have already been acquired, and in many jurisdictions, including Jersey, they are prohibited from engaging directly in commercial trading activities unless those activities are incidental to the attainment of its objects. The objects may be charitable, non-charitable or both, and may benefit a person or class of persons and/or be set up for a specific purpose. As soon as a foundation is established it becomes independent from its founder and has its own legal personality. In a corporate context, a foundation offers many interesting possibilities, and the range of structuring options are extensive. Companies and foundations from certain other jurisdictions can migrate and convert to a Jersey foundation.

Unlike a company a private foundation has no equivalent to subscribers or shareholders and, unlike a trust, beneficiaries have no equitable interest in the foundation’s assets. The foundation’s guardian serves a somewhat similar oversight function to a trust’s protector (or a Jersey purpose trust’s enforcer), and the role of founder is similar to that of a trust’s settlor – the founder being the originator of the foundation.

The management functions of a Jersey foundation is performed by its Council. The foundation council must include a qualified member – a person licenced by Jersey’s financial services regulatory authority.

Why use a Foundation?

The flexibility of a private foundation and the protection it can provide against external claims represent distinct advantages over a traditional trust. The following are some of the principal uses of a foundation:

  1. A general holding vehicle for valuable assets, including traded securities, shares in family businesses and rental property;

  2. To hold assets to avoid forced heirship claims;

  3. Asset protection;

  4. To act as settlor or trustee of a trust, or be a substitute for a private trust company; and

  5. Charitable purpose.

Foundations in Jersey and other jurisdictions

There are several jurisdictions which have their own law on private foundations and, although similarities exist when considering setting up a foundation the law of the chosen jurisdiction must be reviewed in detail as there are differences between them.  

In most jurisdictions, the law merely provides the facility for setting up a private foundation, and it is the constitutional documents (the charter and regulations) that contain the particular provisions required by the founder. This allows for an extremely versatile and flexible vehicle to be created to suit the specific needs of an individual.

Careful professional drafting of these documents is required to ensure the founder’s wishes are clear and that the council fully understand the founder’s intentions.

Things to consider before establishing a Jersey Private Foundation

Before incorporating a Jersey Private Foundation, you should consider the following points to ensure that it conforms to the Foundations (Jersey) Law 2009:

  • A foundation may not directly acquire, hold or dispose of immovable property in Jersey or engage in commercial trading that is not incidental to the attainment of its objects;

  • On incorporation of the foundation, the qualified person becomes the qualified member of the council; and

  • Any questions that arise in respect of a Jersey foundation must be determined by Jersey Law without reference to the law of any other jurisdiction.

Foundation terminology explained

The Founder:

A person who instructs the qualified person to apply for the incorporation of the Foundation, typically this is the client. There is no requirement for the foundation to be endowed with assets when it is initiated, and the provider of any future additions of assets does not necessarily become a founder.

Qualified Person:

A person registered under the Financial Services (Jersey) Law 1998 to carry on a trust business who applies to the Registrar for incorporation of a foundation.    

Guardian:

The guardian may share with the foundation council the responsibility for the control of the foundation and they must act in good faith and the best interests of the beneficiaries. Overall the role is supervisory to ensure the foundation council follow the requirements of the charter and regulations. The founder can also be the guardian.

Beneficiaries:

The objects of a foundation may be to benefit a person or class of persons, or the regulations may prescribe for discretionary appointment by the foundation council. A beneficiary has no interest in the foundation’s assets until they are distributed even if the constitutional documents specify the beneficiary by name and his entitlement. Beneficiaries are not entitled to receive information unless the foundation documents provide otherwise. If a beneficiary becomes entitled to a benefit under the charter or the regulations and the benefit is not provided, the beneficiary may seek an order of the Royal Court ordering the foundation to give the benefit. A founder can be a beneficiary.

Foundation Council:

The council must consist of one or more members (individuals or corporate bodies) one of which must be a qualified person (the qualified member). It has powers of management similar to the powers of a board of directors of a company. The members of the Council owe their fiduciary duty to the foundation itself. The founder can be a member of the foundation council.

The Charter:

The charter is a public document. It specifies the name, the objects for which it has been established (which may be charitable, non-charitable or both), details of any initial assets endowed to the Foundation, a statement of the establishment of a council, how the charter may be amended in the future and details of what happens to the assets on winding up.

The Regulations:

The full version of the Regulations is private and is the equivalent of a company’s articles of association, however and abridged version is made publicly available. The abridged version typically excludes any information which could identify individuals, such as the Foundation or beneficiaries. The regulations must establish the council to administer the assets and set out how decisions are to be made.

Foundations in Dubai - How Fiduchi can help

The Dubai International Finance Centre implemented a Foundation Law in 2018 providing an alternative for clients with family businesses and other assets in the Middle East. A DIFC foundation has an unlimited lifespan and must be registered with the DIFC Registrar of Companies. Its constitutional documents comprise the foundation charter and its by-laws (if issued). Although the foundation must have a registered office in the DIFC at all times, its actual administration may take place elsewhere.

Although similar to other jurisdictions, a couple of features are unique to the DIFC foundation regime. The law contains exceptional asset-protection and firewall provisions to safeguard assets from forced heirship or creditor claims based on foreign law, as long as the disposition of the assets was valid under DIFC laws. It may issue securities, including depositary receipts concerning the assets of the foundation.

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