Perhaps it is best to first start by defining the Private Foundation. One of the most comprehensive definitions of Private Foundation comes from John Goldsworth, founding editor of "Trusts and Trustees" and an internationally renowned expert on Trusts and Private Foundations:
"A Private Foundation" is an independent self-governing legal entity, set up and registered or recorded by an official body within the jurisdiction of where it is set up, in order to hold an endowment provided by the Founder and/or others for a particular purpose for the benefit of Beneficiaries and which usually excludes the ability to engage directly in commercial operations, and which exists without shares or other participation."
A Foundation is a corporate body with a separate legal entity, usually established by the founder to hold assets with the objective of managing these assets for the benefit of a class of persons on a contractual basis. It is deemed a separate legal entity from its managers (i.e. its officers and its council) and is typically used for private wealth management and charitable purposes. The best way of describing a foundation is as a trust enveloped in a corporate shell.
All aspects of Labuan Foundation are governed by the Labuan Foundations Act 2010 (“LFA”). Islamic Foundations are provided for in Labuan and are required to ensure its aims and operations comply with Shariah principles.
The LFA provides for asset protection, wealth distribution and estate planning, allowing you to create a legacy of philanthropy or to preserve your wealth for future generations.