A Private Foundation is basically the combination of a trust and a corporation. Generally, a Private Foundation is very similar to a corporation.

The assets belonging to a legal entity are the same as is the case with a corporation.
It is constituted in such a manner that fiscal benefits can be obtained and confidentiality on the ownership of assets is maintained.
It also has similar administrative bodies.

A Private Foundation doesn’t have any owner, because of the reason that it doesn’t issue share certificates or any other participation title. Further, a Private Foundation may not be used for conducting a business. These are the ways in which it differs from a corporation.

However, holding activities and portfolio investments are not considered an enterprise as far as these purposes are concerned.

Similarly, it has many things in common with a trust. It is a juridical institution which requires certain specific formalities. A few of the Founder’s assets are transferred, “donated” or contributed to the Private Foundation.

A Private Foundation may or may not be revocable.

A Private Foundation may be created mortis-causa or inter-vivos by means of provisions which are testamentary. It is normally created with the purpose of preserving, managing, investing or administering assets for the benefit of the donor’s near ones, as well as to obtain fiscal benefits and confidentiality. It is different from a trust as far as the question of ownership of assets is concerned. A Private Foundation owns its assets because it possesses its own legal entity and there is no “trustee” but there is just the figure of a “Private Foundation Council” which is a combination of the functions of the Board of Directors (of a corporation) and a trustee (of a trust). A Private Foundation has to be registered at the Registry of Foundations in the Netherlands Antilles. It is important to clarify these differences so that a better understanding of the features of the Private Foundation is obtained. This is the reason for which we will discuss the differences in greater detail in the following section.

At the client’s option a Private Foundation may issue Regulations which need not be registered at the Public Registry. Therefore total confidentiality is ensured. Among various other features these Regulations contain the ranks of the beneficiaries and the nature in which the assets of the Private Foundation should be distributed.