Introduction

Origins and Legal Background

The concept of a Jersey Foundation finds its legislative roots in the Foundations (Jersey) Law 2009, enacted to fill a legal and structural gap between common law trusts and civil law foundations. Jersey, already a world-renowned jurisdiction for trusts and company law, introduced this hybrid structure to accommodate international clients, especially those from civil law countries who required the familiarity of a foundation structure with the protections and pedigree of Jersey law.

Unlike trusts, which are relationships rather than legal persons, Jersey Foundations are independent legal entities. They can hold assets, sue or be sued, and enter contracts in their own name. This distinct legal personality is what often appeals to clients seeking a more defined and autonomous structure compared to the discretionary and sometimes confusing nature of trusts.

The structure combines elements from both civil and common law systems, making it attractive to global clients. It also caters to the rising demand for structures that can satisfy rigorous economic substance, transparency, and governance requirements without sacrificing confidentiality or operational flexibility, such as founder or family participation in governance.

Key Features and Distinctions from Trusts

What sets Jersey Foundations apart? Several core features distinguish them from traditional trusts and companies:

• Legal Personality: A Jersey Foundation is a legal person, unlike a trust, which is a fiduciary relationship. This offers a clear chain of title, which is particularly useful for holding certain assets, including real estate, shares, or IP rights.
• Founder Control: The individual or legal entity establishing the foundation (the “Founder”) can maintain significant influence through reserved powers or by appointing themselves to the Council, the body managing the foundation. Such control would not usually be possible with a trust.
• No Beneficial Ownership Register: While compliant with international transparency norms, Jersey Foundations are not subject to public registers of beneficial ownership, preserving confidentiality, a key requirement for many ultra-high-net-worth families.
• Purpose or Beneficiary-Based: They can be established for the benefit of specific individuals, groups, or charitable purposes, offering greater flexibility than many traditional civil or common law structures.
• Council-led Governance: Foundations are governed by a Council, which operates similarly to a board of directors but without shareholders. This adds a layer of institutional governance, aligning with family office standards and professional trustee expectations.
• Guardian Role: In all Jersey Foundations, a Guardian must be appointed to ensure the Council adheres to its objectives. This guardian serves a crucial checks-and-balances function.

Ultimately, the Jersey Foundation provides a solution to the common-law/civil-law mismatch that can complicate cross-border estate and wealth planning. It gives clients from diverse jurisdictions a clear, adaptable, and enforceable vehicle for preserving family wealth, promoting philanthropic endeavors, and managing assets in perpetuity, whilst providing greater flexibility and familiarity for clients, particularly those in the Middle East.

Establishing a Jersey Foundation

Formation Process and Required Documents

Setting up a Jersey Foundation involves a clearly defined legal process that reflects both the formality of incorporation and the flexibility of private wealth planning. The process is overseen by the Jersey Financial Services Commission (JFSC) and must comply with the Foundations (Jersey) Law 2009.

At its core, the process consists of the following steps:

1. Selection of a Qualified Person: A Jersey-regulated service provider (usually a trust company like Cavenwell) must act as the qualified person to file the necessary documents with the JFSC and ensure all requirements are met.

2. Preparation of the Charter: This is the foundation’s constitutional document, similar to a memorandum of association. It includes:

• The foundation’s name
• Its objects (i.e., purpose)
• Information on the initial endowment of assets
• Rules regarding the appointment and removal of Council members and Guardian
• Provisions for amendment or dissolution

3. Drafting of the Regulations: Separate from the charter and typically private, these internal rules govern how the foundation operates. They set out decision-making protocols, Council roles, governance procedures, and other practical mechanisms.

4. Appointment of Council Members and Guardian: The Founder selects at least one Council member and one Guardian. At least one Council Member must be a Jersey regulated trustee, such as Cavenwell. The Guardian may be the same person as the Founder.

5. Initial Endowment: While there’s no statutory minimum, a nominal endowment is typically made to establish the foundation’s standing as a legal entity.

6. Registration with the JFSC: Once the documents are filed and approved, the JFSC issues a Certificate of Establishment. The foundation becomes a registered legal person under Jersey law.

7. Maintenance of Records: The foundation must maintain proper records of its activities, including Council minutes, resolutions, and financial transactions. It must also file an annual confirmation statement.

The whole process can be completed in as little as 2-3 weeks when coordinated by experienced service providers.

Roles: Founder, Council Members, Guardian

Founder:
The Founder initiates the creation of the foundation and typically endows it with assets, however other parties may also contribute to the foundation without being “founders”. While the Founder’s powers can be extensive, they may also be limited or relinquished by the Charter or Regulations to preserve the independence of the structure, especially for asset protection or succession purposes.

Council Members:
These individuals or corporate entities are the governing body of the foundation. They perform functions akin to directors of a company. Their primary duty is to act in accordance with the foundation’s Charter and Regulations.

• Must act in the best interests of the Foundation, but do not have the same duties as the trustees in a trust, which can provide greater flexibility with regards to the types of assets held within a foundation
• Can be residents or non-residents of Jersey
• Are subject to oversight by the Guardian

Guardian:
A Guardian must be appointed to all Jersey foundations, however the Founder can also be the Guardian. The Guardian’s function is supervisory, ensuring the Council upholds the objectives of the foundation.

This multi-tiered governance framework allows for clear control mechanisms, accountability, and succession planning, which is particularly valuable for family offices managing intergenerational wealth or entrepreneurs seeking to formalise or institutionalise their legacy.

Strategic Uses of Jersey Foundations

Wealth Planning and Succession

The most prevalent use of Jersey Foundations lies in long-term wealth structuring and succession planning. Unlike traditional trusts that may be limited by perpetuity rules or subject to jurisdictional inconsistency, Jersey Foundations offer perpetual existence, allowing wealth to be preserved and governed across generations under a single, consistent legal framework.

For high-net-worth families, a foundation allows centralised control over diverse assets such as private company shares, intellectual property, real estate, and investment portfolios held in a tax-neutral, confidential, and strategically governed vehicle. The Founder can customise the Charter and Regulations to reflect their legacy intentions, values, and governance preferences.

Succession is greatly simplified. Foundations do not rely on probate or testamentary processes, and control is passed through the internal rules established by the Founder. This appeals to families with global footprints who seek to avoid fragmentation, disputes, or the burdens of local inheritance law by consolidating global assets into a Jersey foundation.

Additionally, where families are spread across common law and civil law jurisdictions, Jersey Foundations offer a culturally neutral, legally robust solution that resonates with both legal systems.

Philanthropy, Family Governance, and Investment Holding

Philanthropy:
Foundations can be structured exclusively for charitable purposes or as hybrid models that serve both family benefit and charitable ends. They provide a transparent, formalized platform for global giving, complete with internal governance, accountability, and legacy alignment. Moreover, foundations enhance credibility and regulatory compliance for cross-border philanthropic activities.

Family Governance:
Many families use Jersey Foundations not only to hold wealth but also to formalize their internal governance systems around that wealth, how it should me managed and who should benefit. Charters or Regulations can be tailored to include family constitutions, voting protocols, dispute resolution procedures, and education mandates for next-generation members. This institutionalizes family unity and helps avoid common pitfalls of informal, personality-driven wealth transitions.

Investment Holding Vehicles:
A Jersey Foundation may serve as a holding entity for a family’s private investments  including operating businesses, venture capital interests, and passive portfolios. This centralization facilitates unified risk management, enhanced reporting, and operational continuity. It also helps with ring-fencing liability and ensuring a cohesive investment strategy across family branches.

Moreover, they can be used in multi-jurisdictional tax planning, provided appropriate legal and tax advice is taken to reduce exposure to withholding tax, estate taxes, and reporting burdens.

Their utility also extends to corporate structuring. Entrepreneurs often use foundations to anchor their pre-IPO shares, joint ventures, or special purpose vehicles (SPVs) to ensure continuity, asset protection, and alignment with long-term governance objectives.

By offering this multi-dimensional flexibility combining family values, strategic governance, and legal resilience, Jersey Foundations empower clients to think generationally while acting institutionally.

Regulatory and Tax Landscape

Jersey’s Legal Environment and FSC Oversight

Jersey’s status as a premier offshore jurisdiction owes much to its independent legal system, robust regulatory standards, and a consistent track record of cooperation with international regulatory bodies. Jersey Foundations, though private in character, are governed by a formal statutory framework under the Foundations (Jersey) Law 2009, which ensures legal certainty and enforceability.

The Jersey Financial Services Commission (JFSC) serves as the regulatory body overseeing foundations, both in its role as the registry for foundations, and through its authorisation and supervision of regulated firms required to establish and administer a foundation. While the JFSC does not interfere with internal governance, it ensures foundational integrity through:

• Registration Requirements: Every Jersey Foundation must be registered with the JFSC registry and maintain a Jersey-regulated service provider as a Qualified Person.
• Annual Compliance: Foundations must file an annual confirmation statement, pay an annual registration fee, and maintain up-to-date registers and records.
• Regulatory Oversight: Foundations must operate within the anti-money laundering (AML), counter-terrorist financing (CTF), and beneficial ownership guidelines consistent with Jersey’s standing as a well-regarded international finance centre.

Importantly, while Jersey Foundations maintain privacy including no public access to the names of beneficiaries or the Founder,  the JFSC retains the right to access and review documents to ensure lawful operation and risk-based supervision.

Tax Treatment and International Reporting Compliance

One of the primary reasons for the popularity of Jersey Foundations among HNWIs and international families is their tax neutrality. Jersey operates a zero percent standard corporate income tax regime for most entities including foundations, provided they do not conduct regulated financial services or local trading activity in Jersey.

Key tax considerations include:

• No Jersey Tax on Income: Foundations are typically exempt from income, capital gains, or inheritance tax in Jersey (unless it is Jersey sourced).
• Beneficiary Taxation: While the foundation itself is tax-neutral, beneficiaries may be liable for tax in their own jurisdictions upon receiving distributions. Hence, coordination with onshore tax advisors is essential.
• No Withholding Tax: Jersey does not levy withholding tax on distributions from foundations.
• OECD Compliance: Jersey has implemented Common Reporting Standard (CRS) and FATCA regimes. Although there is no public register of beneficial ownership, foundations are required to disclose relevant financial information to the Jersey authorities for international exchange where applicable.

Jersey’s proactive alignment with OECD, EU, and FATF standards reassures clients and their advisors that the foundation structure does not operate in secrecy, but within a compliant and reputable financial ecosystem. This enables greater access to financial institutions such as banks and investment managers.

These elements make Jersey Foundations particularly appealing to clients who require global legitimacy while protecting privacy, optimizing tax outcomes, and maintaining operational flexibility.

Choosing and Maintaining a Jersey Foundation

Selecting the Right Service Providers

Establishing and operating a Jersey Foundation effectively hinges on partnering with experienced and regulated service providers. The law requires a “Qualified Person”,  a licensed fiduciary services provider based in Jersey, such as Cavenwell, to handle registration and ongoing compliance. However, beyond fulfilling regulatory obligations, a good provider adds strategic value across legal, fiduciary, and family governance dimensions.

Key qualities to look for:

• Track Record and Expertise: The provider should have demonstrable experience in structuring and managing foundations for HNWIs, family offices, and international clients.
• Jurisdictional Sensitivity: Given the cross-border nature of many family assets, the provider should be adept in working across multiple legal systems and coordinating with international counsel.
• Regulatory Standing: Always verify that the provider is regulated by the JFSC and in good standing.

Once a foundation is established, ongoing collaboration with advisors is essential to ensure the structure continues to meet the Founder’s goals and adapts to legal or family changes.

Governance, Amendments, and Termination Procedures

Governance Structure:
Governance is central to the success of a Jersey Foundation. The Council is responsible for managing the foundation’s affairs. Council members may be individuals or corporations, and while they do not have the same fiduciary duties as trustees, they must act within the parameters of the foundation’s Charter and Regulations.

Good governance practices often include:

• Periodic review of the foundation’s objectives, asset allocations and investment performance
• Transparent decision-making and minute-keeping
• Involvement of independent professionals where appropriate

Amendments:
The Charter may provide for amendments, but any change must follow the procedures defined within. This can range from simple Council resolutions to more stringent protocols involving Founder or Guardian consent.

Termination:
 A Jersey Foundation may be dissolved if:

• Its purpose is fulfilled or becomes impossible
• The term defined in the Charter expires
• The Council and Guardian (if any) decide to wind it up
• Court-ordered dissolution occurs due to illegality or insolvency

Upon termination, remaining assets are distributed according to the Charter or, absent such instruction, under the default provisions of Jersey law.

Proactive maintenance of a Jersey Foundation ensures it remains compliant, strategically relevant, and reflective of the evolving needs of the Founder and beneficiaries. It also reinforces confidence among family members, co-investors, and regulatory stakeholders.

Conclusion

Jersey Foundations stand at the intersection of tradition and innovation in global wealth structuring. Designed to combine the privacy and control of a civil law foundation with the trust law sophistication of Jersey, they offer a uniquely flexible, secure, and reputable solution for families, entrepreneurs, and advisors seeking permanence, protection, and purpose.

Well-known among Middle Eastern clients who may already be familiar with foundation structures in the DIFC or ADGM, the Jersey foundation offers an ideal alternative, or often compliment, for those seeking to benefit from Jersey’s internationally respected regulatory environment, political stability, and robust private wealth infrastructure.

Whether serving as a succession tool, a philanthropic vehicle, or an investment holding entity, the Jersey Foundation excels by offering formal governance, legal clarity, and structural independence. Its ability to accommodate complex family dynamics, multijurisdictional assets, and evolving tax and compliance demands makes it an indispensable component of a future-proof wealth strategy.

As international scrutiny rises and global families seek greater alignment between purpose, protection, and prosperity, Jersey Foundations offer an answer, trusted, adaptable, and enduring.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

While these documents are accurate as of the date of issue, they may be subject to change in the future should the JFSC update its guidance or requirements.

Frequently Asked Questions

What is a Jersey Foundation?
A Jersey Foundation is a legal entity established under Jersey law that blends features of a trust and a company. It holds assets independently and is commonly used for wealth preservation, succession planning, philanthropy, and asset protection.

How does a Jersey Foundation differ from a trust?
Unlike a trust, a Jersey Foundation has its own legal personality and can hold assets in its own name, sue, and be sued. It is governed by a Council instead of trustees, with greater flexibility for the assets that can be owned.

Who can establish a Jersey Foundation?
Any individual or legal entity, regardless of residency, can establish a Jersey Foundation. A licensed Jersey service provider must be engaged to handle registration and regulatory compliance.

Are Jersey Foundations tax efficient?
Yes. Jersey Foundations benefit from Jersey’s zero percent corporate income tax regime and are not subject to withholding taxes or capital gains taxes in Jersey. However, tax advice should be sought in the Founder’s and beneficiaries’ home jurisdictions.

Can Jersey Foundations be used for philanthropy?
Absolutely. They are an excellent choice for charitable or mixed-purpose goals, providing a formal structure to manage donations, measure impact, and ensure compliance across jurisdictions.