In December 2017 Hassans International Law Firm, Line Group’s associated company, scored yet another first by setting up Gibraltar’s first ever Foundation.
Foundations enjoy having a separate legal personality and are able to hold and manage property in their own name. These entities are brand new to Gibraltar following April’s enactment of the Private Foundations Act 2017.
A Foundation is set up by a Founder following an initial, irrevocable endowment. The operation, administration and purpose, of the Foundation, as well as its exact relationship with its beneficiaries, is laid out in detail by the Foundation Rules and Foundation Charter, a copy of the latter must also be submitted to Companies House.
Although generally associated with charities, Foundations can be set up for a broad number of purposes and offer considerable advantages when compared with more traditional Trusts. One major advantage being the complete separation of ownership and administration of assets within a Foundation. This makes a Foundation the perfect entity to use to shield assets during uncertain times, or for estate planning.
Though not a company per se, a Foundation can still take advantage of Gibraltar’s 10% corporate tax rate, however this rate only applies to income generated from inside Gibraltar. Beneficiaries who are resident in Gibraltar, meanwhile, are taxed based on income derived through the Foundation.
In regards to tax and accountancy, Foundations are treated in a similar manner to companies; this means proper financial records must be kept, detailing income and expenditure, and assets and liabilities for 5 years and full financial statements must then be filed with Companies House.