Kiran Patel's recent interview on Jersey Foundations with TaxLinked
15 January 2019
Our Board Director Kiran Patel was recently interviewed by Tax Linked on the topic of Jersey Foundations. You can read the interview below:
Taxlinked (TL): What are the main characteristics of the Jersey foundation?
A Foundation is an entity of great flexibility, which both compliments and offers an alternative to trusts and companies, as well as having a valuable role to play in its own right for wealth planning and commercial structuring.
Foundations have existed in civil law jurisdictions for many centuries where they were developed for non-profit aims and charitable or religious objectives. The Foundation is very much a civil law invention and hitherto usually only existed in jurisdictions where the concept of equity is alien. In the past century, the modern concept of the “private foundation" has been developed allowing for wealth planning, as well as commercial transactions.
Jersey law has its roots in ancient Norman customary law, which is derived from Roman law, and was thus originally a civil law jurisdiction. Although today due to the increasing influence of English law concepts it is very much a mixed law jurisdiction. Jersey has had a form of foundation for over 150 years, the fidéicommis, introduced in 1862, some 100 years before Jersey imported the trust from English law.
The procedure for establishment is very similar to that of incorporating a company in that, just as subscribers file a Memorandum and Articles of Association, a founder will file a charter with the registrar at the Jersey Financial Services Commission which, when registered, will establish a foundation capable of exercising all the functions of an incorporated body. Unlike some other jurisdictions, Jersey does not require a minimum level of capital, or an initial endowment of assets, for establishment.
A foundation will be managed by a council whose members may be individuals or corporate entities, but which must include at least one person registered under the Financial Services (Jersey) Law 1998 and licensed to carry out trust company business. The law stipulates that any question arising in respect of a foundation or an endowment of a foundation must be determined by Jersey law without reference to the laws of any other jurisdiction. In addition, the law makes it clear that a judgment or order of a court outside of Jersey concerning a question shall not be recognised, enforced or otherwise given effect or give rise to a right, obligation or liability or raise any estoppel if the court giving the judgment or order fails to comply with the foundations (Jersey) law.
The introduction of foundations into Jersey law has strengthened Jersey’s successful financial services armoury and has allowed companies such as Whitmill to market a vehicle with appealing characteristics, but with the strength of Jersey’s reputation of stability, excellence and expertise behind it.
TL: Are there any tax benefits associated to the Jersey foundation?
TL: Who should consider setting up a Jersey foundation and why?
TL: How successful has the Jersey foundation been since its implementation back in 2009?
TL: How will the push by the UK and EU to set up public registers of beneficial ownership affect the Jersey foundation?
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