Private Interest Foundations are new instruments that are considered as a ‘hybrid’ between a Trust and a company containing the best features of both the bodies. It is one of the preferred modes of forming a legal person particularly in civil law jurisdictions such as Central Europe where a Trust may not be recognized under the legal framework.
In common terms, A Private Interest Foundation is formed to manage a particular defined group of assets and there are no owners of the assets but just managers who manage the assets. It is normally formed out of assets provided by a Founder who then nominates members to manage the assets.
A Private Interest Foundation, however, has a separate legal identity from its owner and he no longer owns the assets. The Foundation normally has a particular goal such as management of the assets and the members work to perform that function. Under normal circumstances, it does not perform any commercial functions.
The main difference between a Trust and a Foundation lies in the fact that while in a Trust, the trustees manage the assets for the beneficiary, in a foundation, there is no beneficiary and the Foundation is the only true beneficial owner of the assets that it owns.
A preferred destination for opening a private Interest Foundation in Panama due to its specialized legislation for the same and the fact that it can be opened from a donation of a minimum of $10,000 by the Founder to the Foundation. The process of incorporation of a Foundation can take about 1 week.
No designation has been made by the Texas Board of Legal Specialization for a Certificate of Special Competence in this area.