Why Retain or Keep a Foundation?

Are you wondering whether you really need to keep/retain a Private Interest Foundation (“PIF”) as part of your Corporate structure?


In terms of why have/keep your Foundation you may recall a PIF serves two purposes:


(a)  It gets you around Controlled Foreign Corporation (“CFC”) laws (most countries have CFC laws)

(b)  In the event of a law suit or tax investigation or regulatory inquiry, if you have a valid Foundation in place to own/hold the shares of your Company, you can swear under oath “I am not the legal owner or beneficial owner of this Company”.


Retaining a Foundation to own your Offshore Company will do two things in effect:


  1. It should enable you to avoid having to report/pay tax on any income earned by the Foundation and any assets/Companies it owns, (ie assuming you are not the Councillor of the foundation and assuming the Company is seen to be managed and controlled from Offshore)
  2. In the event of a tax evasion investigation it gives you wriggle room. That is, it (ie having a valid PIF in place to hold the shares of/own your Offshore Company) gives you the chance to argue I’m not liable to report any income earned by the Foundation (or any Company it owns). Without a Foundation in place (ie in the event of a tax investigation) if you have an Offshore Company – and you haven’t declared that Company’s income where you live – you will almost certainly be found guilty of tax evasion and sent to jail… (call it a get out of jail free card in the game of life, if you like that’s what a Foundation is or should be, bottom line)


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