Isle of Man foundations are mainly used for private wealth and charitable purposes although there is no reason why they cannot be used in a commercial context.
A foundation can be the equivalent of a family trust, used to benefit successive generations of family members; or as a charitable foundation operating in a similar way to a charitable trust. Or a foundation could be the equivalent of a purpose trust and could have as its objects the ownership of assets. A foundation might for example be preferred instead of a trust (a) to own assets which are wasting or risky (b) to hold “orphan” assets, for example the shares in an SPV in a financing structure or in a private trust company or (c) where the client is more familiar with civil than common law jurisdictions and thus understands a foundation better than a trust.
Foundation uses may include:
1. Philanthropy – A foundation can be particularly useful for those interested in philanthropy. The law allows for the creation of foundations for purposes which are charitable, non-charitable or a combination of the two. It is, therefore, possible to establish a foundation for a particular purpose which although philanthropic may not qualify as being strictly charitable. Also, a foundation’s existence and its instrument are registered and a matter of public record, this can be important to those keen to maintain an open profile.
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