Foundations
Foundation
Setting up a Foundation in The Gambia provides an ideal solution for family succession/ estate planning, asset protection and flexible taxation management.
Foundations can be set up for a number of reasons such as charitable, specific purpose or to protect assets as part of succession/estate planning. Many jurisdictions allow the formation of Foundation companies however The Gambia is the most efficient foundation jurisdiction as it offers the clearest legal structure for Foundations, Zero tax on movable and immovable assets held in the Foundation (when not located in The Gambia) and a closed registry for a high level of anonymity.
What is a Foundation?
A Gambia Foundation is a separate legal entity (similar to Limited company) but with beneficiaries instead of shareholders. Assets (both movable and immoveable such as property, shares and money) can be donated to the Foundation by its Founder and becomes the legal property of the Foundation.
Structure of a Foundation
There are 3 primary parties required to structure a foundation
- The Founder: An individual or corporate body who will assign ownership of the assets to the Foundation.
- Councillor: a minimum of 1 councillor is required. The councillor may be an individual/s (but not a sole individual if also the founder) or a corporate body (which may be owned or managed by the Founder). The Councillor is appointed by the Founder to manage the business and affairs of the Foundation. Councillors are often referred to as the Foundation Board.
- Beneficiary: This may be an individual, organisation or corporate body (and may be the Founder) that benefits from the proceeds of the foundations assets. When incorporating the Foundation, the Founder must outline its purpose and objects. This will include the management and distribution of its assets and income to the beneficiaries and the purpose of the foundation (does not have to be charitable).
The Foundation must also outline its Charter. This charter will contain the purpose and objects of the Foundation and may be publically filed as a constitutional document in The Gambia Business Registry. Details of the Charter are stored securely within the Foundation Office.
Requirements
- Accounting – The Gambia Foundations are obliged to file annual accounts to the Registry. The accounts should detail all income and donations received, all sales and purchases and any assets and liabilities of the Foundation.
- Registered Office must be maintained in The Gambia.
- All Due Diligence documentation of the Founder.
What you get
The process to incorporate a Foundation takes 10 minutes, once incorporated you will receive:
- Certificate of Registration
- Registry stamped Foundation Charter Document
- Foundation Regulations
- Appointment of the 1st Councillors by the Founder
- First Resolution of the Councillors
- Additional Certified Copy documents where required
Compare Foundation to Trust Company
Trusts Summary: A trust is simply a legal concept using common laws and principles between two parties, the Settlor and the Trustee for the benefit of a third party, the beneficiary. This is a private arrangement and there is no requirement to register the trust.
Trusts are commonly used as an alternative to Foundations; however there are several key differences, most primarily the Legal structure, asset ownership and governing laws. Below is an outline of the key differences between a Trust and a Foundation.
Legal Structure & Ownership |
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| A Trust is created as an agreement to transfer the assets of one party to another party for the benefit of a third party. | A Foundation is a corporate entity whereby assets are transferred for ownership and management for the benefit of specific beneficiaries. |
| This is a Private Agreement that need not be registered | This is a Legal entity governed by statutory laws in the jurisdiction |
| Legal ownership of the assets are split where the Trustee legally owns the asset but for the sole benefit of the individuals or institutions detailed in the Trust Deed. | Assets are donated by the Founder to the Foundation and become legally owned by the Foundation. The beneficiaries receive proceeds based upon on the purpose of the Foundation and its management obligations. |
Control & Administration |
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| Control and administration of trust assets is exercised by one or more trustees in accordance of the trust deed. | Control and administration under the power of the foundation board, as appointed by the founder. The board may comprise of individuals or corporate bodies and maybe be the Councillor. |
| After the trust is settled, the settlor no longer has any rights in respect of the trust unless clearly expressed in the Trust Deed. | The founder may maintain control of the Foundation via a written mandate. This mandate may state the Founder as a principal to instruct the foundation board. However the foundation board must still act in the interests of the founder and the beneficiaries. |
| The trustee, as the legal owner of the assets, has a fiduciary duty to act in the best interests of the beneficiaries | A foundation may grant a proxy to any person. |
Assets |
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| The trustee is legally responsible for the management of the assets and must act in the best interests of the beneficiary. This includes investments and commercial activities which affect the underlying value of the assets. The trustee is liable to the beneficiaries if it fails to carry out it duties, this is typically deemed as gross negligence or wilful default. | Management of the foundation assets is restricted to those on the foundation board (the Councillors). Directors of the foundation do not own a direct fiduciary duty to the beneficiaries but must act in accordance with the by-laws. |
| Distributions made by the trustees must comply with the conditions set by the trust deed and take into account the wishes of the settlor. | Distributions are made in accordance with the management instructions set by the founder and regulated through the by-laws. |
Anonymity |
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| A trust is a private arrangement between the settlor and the trustee and the trustee may be subject to a duty of confidentiality. Beneficiaries are only known internally through the Trust Deed. Commonly the assets are held in the name of an underlying company owned by the trustees. | Foundation companies guarantee complete confidentiality and anonymity for the Founder and its beneficiaries. Although the statutes are registered, the regulations and Foundation Charter need only to be maintained internally. |
| The beneficiaries’ typically have the right to the view the trusts documents and accounts. | The beneficiaries’ rights to information can be limited or in some case excluded. |
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