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Opening a charity foundation in 2022: benefits

10. 01. 2022
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A charitable foundation for private firms is an opportunity to build a positive reputation, save on taxes, and put money where it will make a profit. Keep reading to find out about the benefits of opening a charitable foundation in 2022 and where it's best to register.

Benefits of a charitable foundation

A charitable foundation is created and funded by a single legal entity. The money, which is the main source of income, is under the control of the company that disposes of these finances at its discretion.

A charitable trust provides many benefits to the company that created it:

  • Tax savings. The state provides foundations with quite a few tax benefits; 
  • The assets you give to your foundation are often exempt from inheritance and gift taxes, but remain under your control indefinitely. You can decide where to invest your money;
  • A trust is an opportunity to build a positive image in different circles. If you run a business, it will have a positive impact on its operations;
  • An opportunity to strengthen your family. Foundations are often created to get your family members involved. Working together brings different generations together, which strengthens their bond. Working together allows for more frequent communication, discussion of cases, and teaching of vital skills;
  • The opportunity to invest in a profitable business. The person who controls the trust can put the money where it will make a profit. For example, you can award a scholarship to a promising but poor programmer, and in a few years it will pay off many times over;
  • Opportunity to promote innovation. If you are interested in a certain field, you can stimulate its development through charitable contributions;
  • Give loans instead of grants. Foundations may make low-interest loans to charitable projects (such as a bakery that employs homeless people). Such a loan can be seen as an investment, which then allows you to make a profit on the interest.

What is the best country to set up a charitable trust

Most organizations set up a trust in the country where the money will come from. If this option is not suitable, register it in the country where the beneficiary lives. In some cases, preference is given to countries where the business registration process is as simple as possible.

When choosing a country to create a trust, experts advise focusing on the following points:

  • ease of registration;
  • absence of restrictions on foreign funding (the less the better);
  • developed infrastructure for non-profit organizations.

An example is Jemebel Ali, a free trade zone in the UAE, which positions itself as the world's largest humanitarian aid center. Among the pluses, there are free transactions, the proximity of the port, the absence of export and import duties, and VAT. There are several offices of the United Nations and many charitable foundations that provide various forms of assistance. For example, some support people at a standstill, while others actively develop economic innovations or else.

How to register a charity

Contact IT-OFFSHORE experts and we will help you to choose your country and register your charity in 2022.

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