Our procedures, in detail

How exactly is a Sheltered Foundation set up and managed?

A Sheltered Foundation has no legal personality. By definition, it adopts the legal personality of the Fondation de Luxembourg. In practice, this involves the following procedure:

• A Sheltered Foundation is established through the signing of a contract between the donor and the Fondation de Luxembourg. This contract represents the statutes of the foundation. It covers the purpose, the name and the duration of the foundation as well as the amount to be donated and the role of the Fondation de Luxembourg.
• Before signing the agreement, a separate bank account is opened at the bank of choice of the founder. It should be noted that the Fondation de Luxembourg complies with Know Your Customer (KYC) regulation and, as a rule, may only accept a direct transfer of funds if it is transferred from a bank with activities in the EU/EEA area and therefore subject to EU anti-money laundering regulations.
• Prior to the creation of the sheltered foundation, the founder will be asked to sign a conformity letter assuring that all relevant legal and regulatory obligations have been complied with in relation to the funds that will be donated. 
• The Founder transfers his donation to the designated account held by the Fondation de Luxembourg. 

• Once the foundation has been created, a Management Committee (equivalent to a Board of Directors) is set up. This Committee consists of the founder (possibly several persons in the case of a corporate foundation) who will be assisted and advised in decisions relating to the management of his foundation by a representative of the Fondation de Luxembourg and at least one independent member, generally an expert in the particular activity area of the Sheltered Foundation.
• This Management Committee validates the decisions related to the management, investment policy and projects to be supported by the Sheltered Foundation.
• The assets of the Sheltered Foundation are retained and managed by a bank of the donor’s choice.
• The donor may at any time call upon the expertise of the Fondation de Luxembourg for advice about his foundation.
• The Fondation de Luxembourg can provide media and marketing services for the Sheltered Foundation.
• It may also call upon experts in the sector supported by the Sheltered Foundation who may exchange views with the founder and help to optimize his approach to the supported projects.