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Establishing a Swiss Foundation

Setting up a foundation in Switzerland requires precise legal expertise. The process involves adhering to a series of steps and complying with specific legal conditions.

Table of Contents

Definition of the Foundation and the Intentions of Its Establishment

Simply put, a 'foundation' is a legal entity that holds a pool of assets dedicated to specific purposes. Upon establishment, it gains full legal recognition and ownership of the assets allocated for those purposes. The law of foundations is governed by articles 80 et seq. of the Swiss Civil Code.

A foundation is endowed with its own legal capacity, independent of its founder or other parties. It has organs, a registered address, and a designated name. Unlike corporations, it lacks members or shareholders, yet maintains a close relationship with beneficiaries, who benefit from the foundation's objectives.

Founders, who can be Swiss, foreign individuals, legal entities, or even states or international organizations, can establish a foundation through a public deed or testamentary disposition.
The decision to create a foundation typically stems from the founder's various intentions, which may include:
  • 1
    Accumulation of inherited or acquired assets (accumulation effect)
  • 2
    Protection of assets from external influence (protection effect)
  • 3
    Obtaining tax benefits (tax effect)
  • 4
    Ensuring financial security for family members
  • 5
    Ensuring financial security for the founders themselves (e.g., in case of bankruptcy)
  • 6
    Providing financial security for close third parties
  • 7
    Safeguarding business continuity and preventing share fragmentation
  • 8
    Avoiding inheritance disputes
  • 9
    Engaging in family estate planning

Legal Prerequisites for Establishing a Foundation in Switzerland

Setting up a foundation in Switzerland necessitates adherence to specific legal prerequisites. Below are the primary conditions that must be considered:
  • The foundation must serve a non-profit objective

    Its purpose must be charitable, devoid of profit-seeking intentions.
  • The foundation must possess initial capital

    Adequate initial funding is essential for the foundation to function effectively and realize its goals. The minimum requirement is CHF 50,000.
  • The foundation must have its headquarters in Switzerland

    The foundation's official address must be within Switzerland.
  • The foundation must establish a foundation council

    Serving as the governing entity, the foundation council holds responsibility for delineating the foundation's goals and strategies, as well as overseeing its management. Comprising a minimum of three members, who may be individuals or legal entities, the council ensures effective governance.
  • The foundation has the option to appoint a management team

    Tasked with the foundation's daily operations, the management oversees the execution of decisions made by the Foundation Board. Comprising one or more individuals or legal entities, the management facilitates efficient administration.
  • The foundation is required to engage an auditor

    Responsible for scrutinizing the foundation's annual financial records, the auditor ensures compliance with auditing standards. This role may be fulfilled by a certified auditor.
  • The foundation is obligated to adhere to Swiss legislation

    The foundation must comply with Swiss Civil Code, tax and accounting regulations within Switzerland.

Steps to Create a Swiss Foundation

Outlined below are the necessary steps to establish a foundation in Switzerland:
  • Select a name for your foundation

    The chosen name must be distinct and not currently in use by another entity. It is crucial to verify that the selected name has not already been registered with the relevant authorities.
  • Prepare the foundation's articles of association

    These legal documents, also known as bylaws, define the foundation's objectives and operational guidelines. They should clearly outline:

    · The foundation's purpose
    · Its registered office
    · The organizational structure
    · Operational procedures
  • Ensure the foundation possesses a minimum capital of CHF 50,000

    The capital can be in cash or assets. This initial capital must adequately support the foundation's operations and goals.
  • Establish the foundation's governing bodies

    These include the foundation board, management, and auditors. The foundation council oversees overall management, while the management handles day-to-day operations. Auditors are responsible for examining the foundation's annual accounts.
  • Validate the articles of association with the Swiss Foundation Supervisory Authority and register the foundation

    After drafting and verifying the articles of association and accumulating the initial capital, you must register the foundation with the commercial register. This entails submitting required documents such as the articles of association, a roster of founders and board members, and proof of initial capital.

Benefits of Setting Up a Foundation in Switzerland

Numerous advantages come with establishing a foundation in Switzerland. Here are several of them:
  • Switzerland offers a favorable legal environment for foundations.
  • Foundations in Switzerland benefit from advantageous tax treatment.
  • Donations and legacies received by Swiss foundations are tax-exempt.
  • Swiss foundations are instrumental in safeguarding and administering family assets.
  • Swiss foundations can be utilized for charitable, cultural, or scientific initiatives.


Establishing a foundation in Switzerland involves navigating a precise legal framework and adhering to specific conditions. The process entails careful consideration of the foundation's objectives, governance structure, and financial requirements. While the steps may seem complex, the advantages of setting up a foundation in Switzerland are substantial. With a favorable legal environment, advantageous tax treatment, and flexibility in asset management, Swiss foundations serve as powerful vehicles for philanthropy, asset protection, and family planning. Overall, Switzerland's robust foundation laws and tax benefits make it an attractive jurisdiction for those looking to establish a foundation with enduring impact and effectiveness.

Frequently Asked Questions

A Swiss foundation is a legal entity that holds assets dedicated to specific purposes. Its purpose is typically non-profit and may involve asset accumulation, protection, tax benefits, and ensuring financial security for various parties.