A private foundation was created pursuant to the laws of the Netherlands Antilles and governed by Articles of Foundation. Its capital consists of assets contributed by the Founder, as well as other assets acquired from others, it may make distributions out of its assets (mostly securities) to such persons and entities as the Foundation Council may determine with the written consent of the Founder (but, in fact, the beneficiaries are listed in the Foundation’s Administrative Rules) and its Foundation Council members who commission its management are appointed by the Founder. Is the foundation a trust or corporation? The Directorate responded:
[T]he private foundation created pursuant to the laws of the Netherlands Antilles is similar, in some respects, to the civil law trust.
In order to characterize a Netherlands Antilles private foundation that displays both corporate and trust attributes, it will be necessary to determine what the distinguishing characteristics of a Canadian corporation are, as compared to a Canadian trust, and the weight that should be attached to each… . Once that is done, a characterization determination can be made by comparing those characteristics with the attributes of the Netherlands Antilles Private Foundation.
…[T]he Foundation possesses a separate legal existence from the beneficiaries of the Foundation...possesses its own capacity to acquire rights and to assume liabilities…[and t]he beneficiaries of the Foundation also are not personally liable for any of the debts incurred by the Foundation. In th[ese] respect[s], the Foundation is similar to a corporation. … [However] the Foundation does not issue share capital or something else which serves the same function… the beneficiaries do not pay for their interests in the foundation… the beneficiaries of a private foundation cannot transfer their beneficial interest in the foundation to someone else…[and] the beneficiaries of the Foundation never have the right to participate in the decisions of the Foundation. … [Accordingly] the attributes of a private foundation created pursuant to the laws of the Netherlands Antilles more closely resemble those of a trust under our common and civil law than a corporation. As such, the Foundation should be treated as a trust… . [T]he existence of a separate legal entity clause contained in the Netherlands Antilles legislation governing private foundations would not...preclude an arrangement from being considered as a trust.