How to set up a Swiss foundation

This guide explains how a foundation is set up and where it fits: what it is, the charitable-versus-family distinction that decides almost everything, each step to establishment, the cost and endowment, the tax exemption, the ongoing supervision, and the cases where a foundation is the wrong vehicle. Where you want the structure built rather than explained, the Swiss foundation service page describes the partner-led route; the family-specific route is covered in the Swiss family foundation guide.

What is a Swiss foundation?

A foundation is governed by Art. 80 and following of the Swiss Civil Code and rests on three elements: a dedicated asset (the endowment), a purpose, and an organisation to pursue it (the foundation board). Unlike a company it has no shareholders or members and no one who owns it; the assets belong to the foundation itself and may only be used for the stated purpose. The founder's role ends at establishment — the dedication is irrevocable, and this permanence is exactly what a foundation offers and what disqualifies it where control must be retained.

Swiss law recognises three kinds. The ordinary (usually charitable or public-benefit) foundation is the common vehicle for philanthropy, research funding, employee-benefit schemes and asset dedication in the general interest. The family foundation (Art. 335 ZGB) is tightly restricted. The ecclesiastical foundation serves a religious purpose. The charitable foundation is the one most founders mean, and the one this guide focuses on.

Charitable or family foundation — the distinction that decides everything

The single most consequential decision is which kind of foundation you are creating, because the two are governed and taxed on entirely different terms. A Swiss family foundation may only be established for defined family costs, and foundations for the general maintenance or enjoyment of family members are prohibited under long-standing case law — which is why a family wealth-holding need usually goes to a trust or a foreign family foundation instead.

The practical consequence is that the Swiss foundation is a strong instrument for genuine philanthropy and public-benefit purposes, and a weak one for keeping family wealth under family control. Founders who reach for a foundation to hold and pass on a family estate are usually better served by a trust, examined at the end of this guide, or by a family foundation in a jurisdiction such as Liechtenstein whose law permits it.

How is a foundation established?

Establishment runs through a fixed sequence, and two of its stations sit after the register entry rather than before it — which is why a foundation takes longer than a company.

The drafting is where the outcome is decided. A purpose written to secure both supervisory acceptance and the tax-exemption ruling clears in weeks; a purpose that mixes public benefit with private interest, or leaves the board too much discretion, invites questions from both authorities and stretches the timeline. Registration itself is the quick part.

What does a foundation cost, and what endowment is needed?

The Civil Code sets no minimum endowment, but a foundation must hold enough to pursue its purpose, and in practice the supervisory authorities expect around CHF 50,000 for an ordinary foundation to be viable as of 2026. A larger endowment is usual where the foundation is meant to fund activity from its returns rather than spend down its capital. The endowment is not a fee: it becomes the foundation's own assets, dedicated to the purpose.

Set-up costs are separate. Notary fees for the deed, the commercial-register fee, and advisory drafting of the purpose and governance typically place a charitable foundation's establishment cost above a company formation, because the deed must be built to pass supervision and secure tax exemption at once. Ongoing costs follow: the audit (unless the small-foundation exemption applies), the annual report to the supervisor, and board and administration. Those recurring duties are the reason a foundation suits a lasting purpose rather than a short-term plan.

Supervision and ongoing duties

State supervision is a defining feature of the Swiss charitable foundation and a mark of its credibility. Every ordinary foundation is placed under the appropriate authority (Art. 84 ZGB): the Federal Supervisory Authority for Foundations for nationally or internationally active foundations, and the cantonal authority for those confined to one canton. The supervisor verifies that the assets are used according to the purpose, approves amendments to the deed, and receives the annual accounts and report.

The foundation board runs the foundation and carries fiduciary duties to the purpose, not to the founder or any beneficiary. An auditor examines the accounts unless the foundation is small enough to be exempted. Changes to the purpose are deliberately hard: the supervisory authority can alter it only where the original purpose has become unattainable or unlawful, and the founder can reserve a right to change it no earlier than ten years after establishment (Art. 86a ZGB). Rigidity is the design, not a defect.

When a foundation is the wrong vehicle

A foundation is the wrong choice in three recognisable situations, and each points to a different structure.

When you need to keep control. The dedication is irrevocable and the founder gives up ownership. Anyone who wants to retain control of the assets, draw on them, or reverse the arrangement should use a trust or hold the assets in a company, not a foundation.

When the real aim is family wealth holding. The Swiss family foundation may only meet defined family costs and cannot be a general wealth vehicle. That need is met by a trust or by a family foundation in a jurisdiction whose law permits general support, not by a Swiss foundation stretched to fit.

When the purpose is commercial. A foundation may hold a business, but it cannot exist to run one for private profit; a purpose that is really a trading operation belongs in a company. Where philanthropy sits alongside an operating group, the two are usually separated — the company trades, the foundation holds and gives.

Where the purpose is genuinely public-benefit and meant to last, though, the Swiss foundation is one of the most respected structures in the world for it, and the supervision and tax exemption are features rather than burdens.