The formalities for creating an Anguilla Foundation are almost as simple as creating an Anguilla Trust, with only a few more formalities for compliance purposes, but essentially not difficult.
An Anguilla foundation is established by a natural or legal person making a declaration of establishment in writing, or by a single founder by will, and an initial property endowment of atleast US$10,000.
The procedure for creating an Anguilla trust is simplicity itself and no different from the procedure for doing so in many Common Law jurisdictions. All that is required is the execution of a trust instrument appointing the trustee(s) and setting out the terms of the trust, coupled with the payment or transfer of a fund (which may be no more than nominal at the outset) to the trustee(s). There are no other formalities.
The establishment of an Anguilla Foundation entails compliance with rather more formalities, but is essentially not difficult.
An Anguilla foundation is established by a natural or legal person making a declaration of establishment in writing, or by a single founder by will, and an initial property endowment of at least US$10,000. There is no requirement for separate articles of the foundation but provisions not required to be included in the declaration of establishment may optionally be included in separate articles or in the by-laws.
A foundation may also have separate by-laws, but their contents are not prescribed. They may be adapted to requirements and deal with any lawful matter compatible with the purposes of the Foundation.
The name of a foundation must end with the word “Foundation” or its abbreviation “Fdn.”, or the foreign language equivalent of the word “Foundation” or its recognised abbreviation in that language. It must not be the same as or similar to the name of any other legal entity registered, deposited or reserved under the laws of Anguilla unless such other legal entity consents in writing to the use of that name. And it must not be a name prohibited by regulations made under the Anguilla Foundation Act or any other law in force in Anguilla.
An Anguilla Foundation must either be registered (which renders it public) or deposited (which maintains its confidentiality). Anguilla Foundations established for estate planning and/or asset protection purposes will normally be deposited, unless they have a commercial purpose, in which case they are required to be registered. The Registrar (who is also the Registrar of Companies) maintains the Register of Foundations.
In the case of a registered foundation, if the Registrar is satisfied that all the requirements of the Act have been complied with, he registers the declaration of establishment, allocates to the foundation a registration number and issues to the registered agent a certificate of registration in respect of the foundation stating the date of registration of the foundation, the name of the foundation and its registration number.
If the Foundation Council has decided not to register the foundation (which is not an option if the foundation has a commercial purpose), the declaration of establishment of the foundation must be deposited with the Registrar, together with the prescribed fees. If the Registrar is satisfied that all the requirements of the Act have been complied with, the Registrar will allocate a deposit number to the foundation and issue to the registered agent a certificate of deposit. In the case of a deposited foundation, the Registrar may only disclose information concerning the foundation in very limited circumstances.
There is no requirement that any member of the Foundation Council must be resident in Anguilla, but if there is no resident member then the foundation must have a Secretary who is a resident registered person.
A foundation only acquires its legal personality and its validity and enforceability once it has been either registered or deposited.
Pros and Cons
If a foundation is the appropriate vehicle through which to achieve a particular objective, the formalities entailed in its establishment are unlikely to be a deterrent; indeed they should engender confidence in the process. One of the more innovative aspects of the Act is that the founder of an Anguilla Foundation may choose between registration or deposit of his foundation. This concept has, until now, been the exclusive preserve of Liechtenstein and one of the main factors responsible for the great success of the Liechtenstein family foundation. As mentioned, however, registration or deposit is a precondition to the validity and enforceability of the Anguilla Foundation.
It should be borne in mind, in the context of the formalities for the formation of Anguilla Foundations, that the procedures for the establishment of Anguilla Foundations can also be used for the purpose of converting trusts, formed either in Anguilla or elsewhere, to foundations. Furthermore, foundations already established outside Anguilla can be migrated or “continued” into Anguilla as Anguilla Foundations and Anguilla Foundations can be continued into a foreign jurisdiction as foundations subject to the laws of the new host jurisdiction.