A foundation is a legal entity that holds and manages assets for a specific purpose, often charitable or philanthropic, and its concepts shares the characteristics of both a company and a trust. The core characteristic of a foundation is it has a separate legal personality but has no shareholder, but instead have a council or board of council and sometime with a guardian or a protector.

The concept of a private interest foundation began in 1926 when the Principality of Liechtenstein enacted laws enabling the setting up of foundations for the benefit of persons and families. Liechtenstein is a small independent, neutral country nestled between Switzerland and Austria and for many years had a monopoly in the field.

With the increasing mobility of high net worth individuals, the concept of foundation is becoming more attractive as offshore jurisdictions continue to enhance their offering. For example, Panama provides greater flexibility compared to Liechtenstein, making it a popular choice. Belize, on the other hand, does not recognise foreign judgments, which can be advantageous for privacy. Additionally, the UAE offers the possibility to convert companies into foundations, while also emphasising high confidentiality. These developments demonstrate the evolving landscape of offshore foundations, catering to the diverse needs of wealthy individuals seeking flexible, confidential, and jurisdictionally advantageous structures.

Today, foundations are increasingly utilised globally for estate planning, asset protection, philanthropic initiatives, and confidential wealth management. Their hybrid nature provides both the structured management of corporate entities and the flexibility of trusts, appealing broadly across various jurisdictions.

As with any offshore situation it is important to consider the full legal and regulatory background of the jurisdiction chosen to host the structure. As mentioned earlier Liechtenstein was a pioneer in legislating the use of private interest foundations and that country has an exceptionally robust confidentiality regime.

Inspired by the Liechtenstein foundation model, Panama mirrored the concept and in 1995, they enacted Law No. 25 to allow and offer the hybrid structure combining features of trust and corporations. In 2010 Belize also introduced legislation modeled by the experience of other jurisdictions in the field of foundations, particularly, Antigua, the Bahamas, Isle of Man and Anguilla to allow foundations. The relatively new private foundations in the Dubai International Financial Centre (DIFC) in the United Arab Emirates under the DIFC Foundations Law No. 3 of 2018 was enacted and came into effect in that year.

The following table gives comparisons of major elements of foundations in the three leading jurisdictions, Liechtenstein, Belize and St Kitts.