Foundations were introduced approximately 100 years ago in Western Europe. Their use for estate and asset planning started in Liechtenstein in the early part of the 20th Century. Foundations have since become popular across the globe, especially in civil law jurisdictions where the concept of 'Anglo Saxon Trusts' is less well known. Foundations can be established in many countries including Panama, The Netherlands Antilles, the Bahamas and the Isle of Man - who introduced foundation legislation in 2004 and 2011 respectively to make them the leading common law jurisdictions for the domicile of foundations. A foundation is a separate legal entity, without members or shareholders, and is generally established to reflect the wishes of the founder, who may be an individual or a corporate entity. These wishes are contained within the Foundation's Charter and Regulations. Foundations can be established for a fixed or indefinite period of time and can be used for charitable, commercial or for family purposes.

Foundations are a very important component when structuring the ownership of family and corporate assets and are particularly important where trusts are not generally recognised. They are in many respects similar to corporate entities but afford the protection and continuity derived from the use of trusts.

• Private relationship: For example, the founder's wishes are not publicly registered
• Wealth protection
• Recognised in all common and civil law jurisdictions
• Holding assets which can be passed on from one generation to the next (estate planning)
• Inheritance tax planning
• Avoidance of forced heirship rules
• Maintenance of corporate control
• Separation of voting and economic benefits
• Employee share option schemes
• Pension funds
• Art collections
• Charitable purposes
• An important tool in international income, capital gains and estate tax planning
• Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements

• Shares and stocks in both quoted and private companies
• Investment portfolios
• Real and intellectual property
• Bank deposits
• Life assurance policies
• Most other types of asset

• Want to preserve their wealth against uncertainty; either political, economic or family related
• Want to transfer wealth to their heirs in a tax-efficient manner. They want to plan their estate to maximise the benefits of their wealth for family members and others
• Want to transfer wealth to their heirs in accordance with their wishes and not in accordance with the laws of the country where they live
• Want to consolidate the ownership of assets owned throughout the world in one location
• Want centralised reporting
• Want to minimise or eliminate estate taxes arising on the death of the founder

When a foundation is established in a suitable offshore jurisdiction, provided that residents of the offshore jurisdiction are excluded from receiving benefit from the foundation, then there will be no local taxes applicable to the assets and income of the foundation.