The island of Jersey is about to legislate to enable foundations to be established there for the first time. They will be available in Jersey alongside existing vehicles such as companies, trusts and limited partnerships, for use in financial planning and private wealth management strategies.

A foundation is a distinct legal entity similar to a company, though with no shareholders. The powers of the foundation will be exercised by a council, one of whose members must be registered under the Financial Services ( Jersey) Law 1998 to conduct financial services business of this type. The foundation’s charter must be lodged with the registrars department of the Jersey Financial Services Commission, setting out the name and broad objectives of the foundation.

While similar in design to foundations available in o ther territories, Jersey has introduced the new concept of a guardian who will sit on the council that administers the foundation.

It will be the guardian’s role to ensure that the foundation achieves the broad objectives outlined in its charter. Under the Jersey legislation, it is proposed that the founder would be able to hold the post of guardian and council member, therefore permitting a greater level of control over the assets if required.

Geoff Cook, chief executive of Jersey Finance, said: “We anticipate that the foundation vehicle will appeal to clients based in civil law territories where they are less familiar with the trust concept and it will also be an effective financial planning vehicle for those clients who want to maintain more personal control of the assets. It has some of the attractions of a trust vehicle and some of the benefits of a company structure including separate legal status, which will enhance its appeal to private clients and their advisers who may not previously have considered Jersey as a location to shelter assets.” 

The new Foundations Law is subject to the approval of the States of Jersey Parliament in October before it can be formally enacted.