Are foreign trusts, private foundations, etc recognised?
Please refer to our answers to questions 18 and 19.
Foundations are not recognised by Irish law. If a foundation was established outside of Ireland, the relevant law of the civil law jurisdiction where the foundation was established would need to be examined.
Foreign trusts are accepted in Ireland, provided that they comply with certain formalities and contain the essential elements of a trust recognised in Ireland. Real property in trust must be evidenced in writing, signed by a person able to declare the trust. As referred to in Question 19, the three certainties must exist for the trust to be valid.
Foreign trusts are recognized but are disfavoured. There is a heavy reporting burden for US Persons who establish or are beneficiaries of a foreign trust. Foreign private foundations are recognized, but are taxed differently depending on whether they are charitable foundations or are privately-owned.
Although it is impossible to create a trust under French law and France has not ratified the Hague convention on the recognition of trusts, French courts recognise the effects in France of common law trusts, provided they comply with the mandatory provisions of French law.
However, because there is no distinction in French law between legal and equitable ownership acquiring an asset located in France by a trustee may entail difficulties.
The real estate registry (“registre cadastral”) cannot register the acquisition of a French real estate by an individual or a corporate acting in her/his/its capacity as trustee. This can be achieved by interposing at least one company between the French real estate properties and the trust represented by its trustee.
The ownership of French movable assets may also entail difficulties as the trustee is treated as the apparent owner of any trust’s assets located in France. This is the additional reason why the authors strongly recommend to interpose at least one company between the French movable assets and the trustee representing a foreign trust.
Foreign law trusts are recognised pursuant to the Hague Convention on the Law Applicable to Trusts and on their Recognition (hereinafter “the Hague Convention”), which was ratified by Italy in 1989. Foreign family foundations are recognised too.
Yes. Under Israeli tax law the following entities are considered 'Trust' for the Israeli tax law:
- Foundation established under the law of Netherlands, Lichtenstein, Panama, Bahamas Islands or Netherlands Antilles;
- Establishment under the Lichtenstein's laws;
- Registered Trust under the Lichtenstein's laws.
For the legal and tax treatment of foreign trusts, see Question 18 and 20.
Foreign trusts and private foundations, as analyzed in question 18 above, are recognized in Greece via primary [Laws] as well as secondary [Circulars etc] pieces of legislation.
It is worth noting, that the Greek set of tax rules on foreign trusts and private foundations is currently going through an active and dynamic process to become aligned to internationally approved tax practices.
Foreign trusts are not recognised by German law. Furthermore, Germany did not ratify the HCCH Convention on the Law applicable to Trusts and on their Recognition 1985. As a consequence, German property law does not recognise the transfer of assets located in Germany to a foreign trust. It depends on the terms of the trust whether those assets are considered to remain the property of the settlor or the trustee for German civil law and tax law purposes.
Foreign private foundations are recognised in Germany if their structure is comparable to the structure of a German foundation as provided for in the German civil code.
Although Belgium does not have its own trust law, foreign trusts are recognised. Trusts will be governed by the law of choice of the settlor. When no choice of law is made, or if that choice is invalid, the trust will be governed by the law of the state where the trustee has/had his habitual residence at the time it was created.
Unlike trust law, Belgium does have its own legislation regarding private foundations. A foreign foundation will be recognised in Belgium and will be governed by the law of the state where its main establishment is located.
British Virgin Islands
The provisions of the Hague Trusts Convention have been extended to the BVI and most of the provisions of the (English) Recognition of Trusts Act 1987 form part of BVI law, with the result that the vast majority of foreign trusts would be recognised.
We are aware of no decided case dealing with the recognition of foreign foundations but they feature in many BVI structures and it is generally considered that these would normally be recognised.
Whilst there is no concept of trusts and foundations under local law, in practice, many local assets are capable of being held by offshore holding companies and in turn, are owned by offshore trusts and foundations.
In 2007, Monaco has acceded to the 1985 Hague Convention on the Law Applicable to Trusts and on their Recognition. The Code on Private International Law confirms the recognition of foreign trusts in accordance with the Hague Convention on the Law Applicable to Trusts and on their Recognition.
Foreign trusts are therefore fully recognised in Monaco.
Foreign private foundations are also recognised in Monaco.
Please see answers in question 18 above.
English law recognises trusts (§19.1) and private foundations established under non-English law.