By Startups.ch, June 20, 2015

Setting up a foundation: What do you need to look out for?

Setting up a foundation is relatively simple in Switzerland. Read about what you need to look out for in this article.

Overview

To set up a foundation, there must be a dedication of funds for a certain purpose, which may not be unlawful or immoral. The foundation has its own legal personality, but it does not have members, only beneficiaries. These are the persons who may receive the services of the foundation (e.g. young entrepreneurs). The foundation may be set up by one or more people. The legal regulations governing foundations can be found in the Schweizerischen Zivilgesetzbuch [ZGB] or Swiss Civil Legislation from Art. 80 ff.

Form of set up

The foundation may be set up either in the form of a public deed or by a will. The founder must define the essential elements of the foundation in a deed of foundation. The deed of foundation must contain the following essential elements:

• The desire of the founder to create a foundation
• Adequate description of the purpose of the foundation (role of the foundation and circle of beneficiaries)
• Description of the funds granted to the foundation

Organisational rules and representation of the foundation are not required at set up, but we recommend defining these points in organisational regulations.

Entry in the commercial register

To complete set up of a foundation, it must be entered in the commercial register (exception: the family foundation and the church foundation may enter the register voluntarily). This entry is made as part of the deed of foundation and contains the members of the foundation’s council, as well as the auditors.

In general, foundations are tax exempt in Switzerland. However, a condition of this is that they have recognised charitable status.

Fundamentally, the purpose can not be changed, but there are exceptions to this regulation (Art. 86 ff. ZGB)

From the point of view of overall liability, foundation law in Switzerland is very liberal and thus enjoys a certain popularity. Post employment provision institutions, i.e. pension companies generally chose this as the legal form for their business.

Would you like to set up a foundation? The lawyers at STARTUPS.CH are at your disposal before and after set up. You can register for an advisory conversation here, or request free documentation.