3. Foundations

a. General

On 17 July 2009, the concept of foundations was introduced into Jersey law by the coming into force of the Foundations (Jersey) Law 2009. For clients and authorities originating in civil law jurisdictions where the concept of a trust may be less familiar, a foundation can be a more acceptable vehicle. It has different qualities and attributes that may appeal to certain investors. For example, unlike a trust, a foundation is established by incorporation and becomes a distinct legal entity although, unlike a company, it is an ‘orphan’ entity without the presence of shareholders. As well as being used for wealth management and estate planning, foundations may have applications in more specialist areas such as long-term charitable objectives or capital structuring arrangements, where it is desirable that property be given to a legal entity and applied for specific purposes.

As with companies and trusts, the use of foundations will be subject to compliance with the regulatory standards established by the Jersey Financial Services Commission. In this regard it is a statutory requirement for all Jersey law foundations to appoint a Qualified Person to sit on the foundation council. The Qualified Person is defined as a person who is registered under the Financial Services (Jersey) Law 1998. It will be the responsibility of the Qualified Person not only to incorporate the foundation but also in practice to maintain the records of the foundation at its business address. A further legal requirement is the appointment of a Guardian whose role will be to take such steps as are reasonable in all the circumstances to ensure that the council of the foundation fulfils its functions of administering the assets of the foundation and carrying out the objects of the foundation.

The Foundations (Jersey) Law 2009 has been supplemented by regulations that deal with such matters as the winding up of foundations, mergers of foundations and the continuance of foreign law foundations into Jersey.

b. Resources

i. Legislation

Foundations (Jersey) Law 2009

Foundations (Continuance) (Jersey) Regulations 2009

Foundations (Amendment) (Jersey) Regulations 2009

ii. Website

Jersey Legal Information Board

© 2012 Society of Trust & Estate Practitioners