Offshore Advantages

General Information

In 2007 the International Foundations Act 2007 was put into effect allowing for the regulation of the International Foundations and related matters.

It is a species of foundation that is a separate legal entity where the founder makes a disposition of property which ceases to be part of his estate irrevocably and becomes the property of the foundation. The foundation is operated by a council which acts for and on behalf of it at all times. The foundation and its endowment act solely for the beneficiaries of the foundation or for the charitable purposes which  a foundation may set out in its charter.  The foundation may be established for a charitable or non charitable purpose or both or a clear purpose set out in the charter.

Establishment of an Antiguan and Barbudan Intenational  Foundation

The Financial Services Regulatory Commission maintains a Register of International Foundations. All International Foundations must be registered on the Register of International Foundations. The Register contains the Name of the Foundation, the name and address of the Antigua and Barbuda member of the foundation council. An application for entry on the Register must be made within forty five days of the execution of the charter of the Foundation.

Information needed for the Registration

An application for entry in the Register must include:

1. 1. Name of Foundation
2. 2. Name and Address of Antigua and Barbuda Member of Foundation Board
3. 3. Name and Address of All Non-Resident Members
4. 4. Name and Address of All Protectors
5. 5. Date of Execution of Charter by Founder
6. 6. Date of Execution of Charter by each Member
7. 7. Date of Execution of Charter by each Protector

The applicant must also attach the following—

The intended Prescribed Fee and a Certificate from the Antigua and Barbuda member which certifies:

(a) The name of the foundation;

(b) The name and address of the Antigua and Barbuda member;

(c) The name and address of each non-resident member;

(d) The name and address of each protector;

(e) The purpose of the foundation;

(f) The date of submission of the Certificate to the Commission; and

(g) If a re-domiciled foreign foundation:

i. The law under which the foundation was created;

ii. Original date of registration of the foundation in its original jurisdiction (or original date of execution if original date of registration is not available); and

iii. Date of amendment to provide for the law of Antigua and Barbuda to be the governing law of the foundation.

Founder and Beneficiaries

The following information has to be submitted to the Corporate Trust Services (Caribbean) Limited prior to incorporation:

1. 1. The name, nationality, home and business address and occupation of the Founder and a copy of his/her passport. If the Founder is a corporation then the information is required from the ultimate beneficial owner of that corporation.
2. 2. The name, address and identification number (passport or local ID) of any beneficiary known at the time of incorporation;
3. 3. A reference letter from a reputable law firm, bank or financial institution confirming the trustworthiness and reliability of the Founder;
4. 4. A statement as to the true purpose of the Foundation being established;
5. 5. A declaration as to the source of the funds the foundation is to be funded with.

The above information and documentation is kept strictly confidential and is solely for Corporate Trust Services (Caribbean) Limited’s records, however the name of the Founder does appear In the Articles of Incorporation of the Foundation and this is public record. Corporate Trust Services (Caribbean) Limited can act as founder in order to preserve the privacy of the client, in which case above information is required for the person on whose behalf the Foundation is to be incorporated.

Foundation  Charter

The charter is the governing document of the foundation.  It is executed by a founder and each member of the foundation council and any protector, either before two witnesses or a notary public of the court.

It must include the name of the foundation, the beneficiaries or purpose of the foundation, it must appoint a foundation council and specify members, set forth the respective rights, duties, responsibilities and beneficial interests of the foundation council and beneficiary, set forth the method of appointing and removing a member of the foundation council, specify the initial endowment and set forth the manner in which the endowment may be maintained and distributed.

The charter may designate a protector and set forth the protectors rights, duties and responsibilities.

The charter can also be used to designate property to the foundation and upon execution by the founder and each member of the foundation council the property is vested in the foundation.

Founders Rights

A founder cannot sit on the Foundation Council but may be a beneficiary or the sole beneficiary of the foundation.  The founder does not possess the power to direct the foundation council, to amend the foundation charter or dissolve the foundation.

Purpose

The foundation and its endowment act solely for the beneficiaries of the foundation or the charitable purposes a foundation may set out in its charter.  The foundation may be established for a charitable or non charitable purpose or both or a clear purpose set out in the charter. The purpose may never be one which is against Antiguan and Barbudan Law or public policy.

Foundation Endowment

The founders may make an initial gift of property to the International Foundation. All profits gain and appreciation of the property are the property of the international foundation.  The foundation can receive any property at any time from any person pursuant to the foundation charter.

The endowment shall be maintained for the benefit beneficiaries or the purposes of the foundation outlined in the charter.

Any assets acquired by the administration of the foundation and its endowment become part of the endowment of the foundation.

Property acquired by right accruing to the foundation is also part of the endowment.

Capital

There is no minimum capital requirement.

Representation

The Foundation Council should consist of at least one domiciliary of Antigua and Barbuda. Corporate Trust Services (Caribbean) Limited can act as such on client’s request. If not Corporate Trust Services (Caribbean) Limited,  Foundation Council Members details are to be provided on the attached application form.

Management and Domiciliary Services

Corporate Trust Services (Caribbean) Limited offers a full range of services to incorporate and maintain a Foundation.  Two significant services rendered by Corporate Trust Services (Caribbean) Limited are:

1. 1) Providing a local registered address and office, and
2. 2) Acting as the local Director of the Foundation. An Antigua and Barbuda based Foundation must have at least one domiciliary on the Foundation Council. Usually Corporate Trust Services (Caribbean) Limited acts as such and takes care of all legal requirements.

The following services are included in our basic service package:

-Providing the registered office.

-Providing one corporate foundation council member.

-Filing the required documents and forms with the Financial Services     Regulatory Commission.

Some other services that are rendered by Corporate Trust Services (Caribbean) Limited, upon clients request are:

. By resolution of the Foundation Council, the domiciliary member can issue Limited Powers of Attorney in favor of third parties for special transactions and services.

Accounting Services

Although there is no legal requirement to have financial statements prepared Corporate Trust Services (Caribbean) Limited recommends doing so for proper administration of the affairs of the Foundation. Those statements should comprise a Balance Sheet, Statement of Income and Expenses and Explanatory Notes and should annually be approved by the Board of Directors.

As all the financial details of the Foundation’s transactions and other financial data are readily available in the Foundation’s records, it is most efficient tat the local foundation council member takes care of the accounting.

By David Jessop

The Doha Round at the World Trade Organisation (WTO) is deadlocked. Although officials and Ambassadors continue behind the scenes to negotiate building blocks for an eventual agreement, there is sense that the political will required to re-energise the process does not exist.

So much so that in Geneva there is a view that so radically has the international trade landscape changed in the nine years since the process was launched,  that  the shape of any final deal will now require many if not all states to reconsider the effect of the offers they were prepared to make previously.

Since the Round began in Doha in 2001 world trading patterns have changed. The economies of advanced developing nations have been growing rapidly while in contrast those of the developed world that came close to systemic collapse in 2008,have since only slowly come out of recession.

Across this period China, India and Brazil have continued to industrialise, grow and trade. They have become members of the G20 and have penetrated developed and developing markets alike. As a consequence many of the eventual trade-offs envisaged by the US, Europe and others to achieve a trade round may no longer be sound, requiring it is suggested the developed world to examine the political implications of this structural change in the global balance of trade and economic power before proceeding; and for Washington and Beijing in particular to first consider when and how it might be possible to move forward again.

The result is that the focus in trade liberalisation is now shifting rapidly to bi-lateral and bi-regional deals such as those that Europe has recently struck with Central America and with Andean nations, or that which the Caribbean is negotiating with Canada. These are likely to multiply, leaving some trade officials to wonder whether a whole new negotiating arena may have to emerge to reconcile such arrangements before any global deal can take place.

At the same time it also seems that many developing nations that were previously comfortable with the general thrust of the Round, if not with its fine detail, may also be having concerns about the rise of China, India and Brazil and the impact they as opposed to the developed world will have as their tariffs are reduced. All of which leads to a privately held view in some parts of the WTO that the only way forwards multilaterally may be through limiting ambition and going for less than a full round.

As for the Caribbean, its position, like that of many developing nations, is to wait and see.

On the whole, the Caribbean’s experience of the way the WTO system works has not been that positive.

The WTO process has been bruising. Other nations, notably in Latin America, have sought to challenge the region’s established preferential arrangements with Europe in respect of bananas, sugar, rum rice and other products; and Caribbean Ministers have until relatively recently found themselves effectively excluded from the key political decisions which  are dominated by OECD nations and more recently the emerging economies of Brazil, China and India.

The one important victory that the region has been able to achieve was the WTO’s decision in 2004 to rule in favour of Antigua and against the United States in a dispute over the provision of internet gaming services. In outline this involved the WTO accepting on appeal Antigua’s claim that the US had damaged its interests by adopting measures which affected its cross-border supply of gambling and betting services. Following a ruling in early 2007 that the US had done nothing to abide by its judgement, Antigua filed a claim at the WTO for US$3.4billion in trade sanctions linked to a request for authorization for the island to ignore US patent and copyright laws.

However, since that time there has been no final resolution of the issue. Speaking recently to the Caribbean media, Antigua’s Prime Minister, Baldwin Spencer, expressed  serious concerns about Washington’s non-compliance, and indicated that it was his intentions that the island would impose sanctions on the US and that he would take the matter to Caricom Heads of Government.

However, Caribbean Heads while expressing ‘strong solidarity’ and concern about the negative economic impact non-resolution was having, coupled this with language that seemingly implied that the region was concerned that any such response might bring the region into conflict with the US Congress in relation to the ten-year extension of the Caribbean Basin Trade Partnership Act to 2020 or the recently launched Caribbean Basin Security Initiative.

What such sanctions might consist of or how they could be imposed without hurting Antigua economically is unclear, but the failure of the WTO process to be able to bring the issue to a conclusion with the US has consequences that go far beyond Antigua’s heated internal politics.

Bringing the case to a successful end is important not just for Antigua but for all small states. If the US requires adherence to a rules based system but then fails to meet its commitments at the WTO it brings the whole concept into disrepute. Worse it means that the Caribbean and other nations are participating in WTO proceedings on a false premise.

If, as seems to be happening, the dynamics of world trade have changed, small states have even more need of proof that that the body’s rules have teeth. While a less ambitious round may be a way forwards in the interim, small states require assurances that cases of the kind Antigua has brought, or that others in the region may be considering, result not in delay but in a just outcome.

David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org

Previous columns can be found at www.caribbean-council.org

July 9^th, 2010