What is a foundation?
In Switzerland, a foundation is a legal entity with assets that are legally independent of its founder, but has no members.
Consequently, the creation of a foundation requires the donation of assets for a specific purpose (article 80 of the French Civil Code).
These assets may include cash, real estate, intellectual property, securities or even claims that the foundation may have against the founder.
The creation of a foundation takes the form of a public deed or a disposition mortis causa. The foundation must be entered in the Commercial Register.
How does a foundation work in Switzerland?
The object of the foundation is determined by the founder, while the assets allocated to the foundation are the means available to legal entities to pursue the foundation's object. The object is the heart of the foundation, as it determines the purpose and objective of the foundation, as well as the beneficiaries of the foundation.
The assets constitute the foundation's capital and are strictly protected; only the profits may be used for the foundation's purpose. Because a foundation has no members, only beneficiaries, and because they are often created for a cause of public interest, they are closely monitored by theSwiss Federal Supervisory Authority for Foundations.
Key figures
Switzerland is one of the countries with the highest ratio of foundations per capita. The country is home to numerous non-governmental organizations, notably in Geneva.
At the end of 2022, there were 13,790 charitable foundations in Switzerland, according to SwissFoundations, the leading umbrella association for charitable grant-making foundations in Switzerland.
Types of foundations in Switzerland
Private/family foundation
This type of foundation must have a recognized useful purpose, such as the protection of a natural site, the preservation of a cultural heritage, or the promotion of the environment. animal protection, support for medical research, and much more.
A family foundation, i.e. one whose beneficiaries are family members or relatives of the founders, is only legal if the foundation's assets are intended to ensure the education, establishment or assistance of family members.
Employee Benefits Foundation
Compulsory occupational benefits in Switzerland can be organized through a foundation, to which employer and employee contributions are transferred.
Public interest foundation
For a foundation to be considered of public interest, it must pursue a disinterested goal (i.e. without a purely economic purpose) that benefits society, and have volunteers (in certain cases).
The public benefit foundation offers numerous tax advantages.
How to set up a foundation
1. Name selection
First and foremost, you'll need to choose a name for your foundation. In general, a foundation will take the name of its founder, but the choice is up to you. You must, however, ensure that the name you choose is free.
2. Deed of foundation
Once you've chosen a name, you'll need to draw up an authentic deed of foundation. To do this, you'll need a notary who can authenticate the deed.
3. Drafting the bylaws
Drafting the articles of association will define the foundation's purpose, name, registered office and governing bodies.
4. Capital contribution
Once these steps have been completed, you will need to make a capital contribution of at least CHF 50,000. The capital must enable the foundation to get off to a good start.
5. Entry in the Commercial Register
Next, you'll need to register the foundation in your canton's Commercial Register. You can only start work once the registration has been published in the Swiss Official Gazette of Commerce (SOGC). It is at this point that the foundation is constituted and given legal personality.
6. Validation by supervisory authorities
The Commercial Register will then forward the above information to the Swiss Federal Supervisory Authority for Foundations. It is this authority that will issue the decision to place the foundation under supervision. If everything is in order, the supervisory authority will communicate its decision to the foundation and to the CR.
Frequently asked questions about foundations in Switzerland
How can I find a foundation?
You can search for a foundation in theFundraiso indexYou can search by name and category.
What is the minimum capital required to set up a foundation?
According to the practice of the Swiss Federal Supervisory Authority for Foundations, the minimum amount to be contributed at inception is CHF 50,000.
How can a foundation benefit from tax exemption?
To qualify for tax exemption, the foundation must be recognized as a charitable organization. To do this, you will need to submit an application to theAFC.
Can a foundation own companies?
A foundation may own companies or shares. It should be noted that a foundation holding companies could obtain the tax status of holding company.
