Offshore Companies Vs. Offshore Foundations
1. The main difference between the two legal figures is that while IBC / Companies / Limited Liability Companies are form to carry out commercial activities in a habitual and direct manner, Private Interest Foundations cannot carry out commercial activities in a habitual or direct manner, except through IBC / Companies / Limited Liability Companies. Private Interest Foundations, must be established for the purpose of patrimonial protection, holdings of shares, holders of any kind of assets (including real state).
2. IBC / Companies / Limited Liability Companies they are compose by a share capital divided into shares, while in the Private Interest Foundation there is patrimony but it is not composed of shares, but of contributions from the founder.
3. IBC / Companies / Limited Liability Companies they must be form by a Board of Directors that must be three (3) natural persons of any nationality (President, Secretary, Treasurer). The Private Interest Foundation must be composed of a Foundational Council that can be form by one (1) legal person or three (3) natural persons of any nationality (President, Secretary and Treasurer).
4. In IBC / Companies / Limited Liability Companies the shareholders are considered the owners of the and will respond according to the percentage of their shares. The shareholders are not registered in any public document. There are no shareholders in the Private Interest Foundation; there is the figure of the beneficiaries who are not considered the owners of the foundation, however they are legally entitled to receive the patrimony of the Private Interest Foundation in accordance with what is established in founding regulations/ foundation wishes an in the foundation act.
5. In the Private Interest Foundation the protection has the control of all acts of the founding council, in the S.A. there is no such figure.
6. In the Private Interest Foundation, a document called the founding regulation or foundation wishes is issued once the foundation is formed. This is a private document on which is appointed the principal and secondary beneficiaries, and what would happen in the event of the death of the principal beneficiary.
In the S.A. there is no such document, only share certificates either nominative or bearer. In the case of bearer shares, the owner is the holder of the shares, in the case of nominative shares, to be transferred they must be endorsed. In this case, if the shareholder does not endorse the certificate and for example cease to exist, a trial succession must be impose accordingly.
This is avoided with the figure of the Private Interest Foundation. This is why it is advisable that when the client operates through an In IBC / Companies / Limited Liability Companies. also constitute a Private Interest Foundation.