Create a foundation in Switzerland: the basics
A foundation is a legal entity constituted by the assignment of assets for a stated special objective. In Switzerland, to create a foundation, founders must submit notarized legal documents.
Swiss law: Foundation charter
The foundation charter is a deed poll by the founder(s) and contains:
- The name of the founders
- Attributed funds or property
- The goal of the foundations
- A designated board of the foundation
As a legal entity, a Swiss foundation must conform to a relatively strict definition.
Once the purpose has been set out in the charter, it cannot be changed without the approval of the supervisory authority.
In order to acquire legal personality, the foundation must be listed on the Swiss Commercial Registry.
Types of Swiss foundations
- Private foundations and family foundations
This type of foundation must have a “noble goal” for the protection of nature or fighting illness, for example. Family foundations, meaning that the beneficiaries are family members or people close to the founders, is lawful if the assets of the foundation are designated for the education, establishment or assistance of family members.
- Pension fund for staff
Switzerland's mandatory pension funds can be channeled through a foundation to which employer and employee contributions are paid.
- Public benefit foundation
If a foundation is recognized for the benefit of people, it enjoys certain tax benefits.
It should be noted that some foundations which own large commercial enterprises obtain the tax status of a holding company.
According to the Federal Supervisory Board for Foundations, the minimum amount of initial capital required to start a foundation is 50,000 CHF ($55,000).
Administration of a Swiss foundation
The board of trustees is the governing body of the foundation. Its objectives are the objectives of the founders which are described in the foundation mission statement.
Family foundations are not subject to monitoring controls by local authorities. Other foundations are subject to controls by the local authorities which depend on the achievement of the foundation's goals.
The Board of Trustees of the foundation is required to submit a report of their activities along with a financial annual report approved by auditors.