Swiss foundation — endowment, supervision and tax status

A Swiss foundation is dedicated wealth with legal personality: the founder transfers assets irrevocably to a new entity that pursues the purpose written into its deed — philanthropy, research, culture, or the narrow family purposes Swiss law allows. It has no owners and no shares; a foundation board governs it, and for most foundations a state supervisory authority watches over purpose compliance. Formation runs through a public deed (or a will), takes effect with the commercial register entry, and supervisory practice expects an initial endowment of CHF 50'000 (as of July 2026).

Setting up a Swiss foundation, step by step

1. Define the purpose and deed

   The purpose clause is close to immutable — later changes need supervisory approval and, without a reserved amendment right under Art. 86a CC, are rarely granted. Draft it with the end state in mind.

2. Appoint the foundation board

   Practice expects at least three members, with at least one Swiss-resident signatory — the same residence logic as for companies, solvable through a fiduciary mandate.

3. Notarise the deed and prove the endowment

   A notary records the foundation deed; the dedicated assets are evidenced. Alternatively the foundation arises from a will on death.

4. Enter the foundation in the commercial register

   The entry is constitutive — the foundation exists from registration. Since 2016 this applies to family and ecclesiastical foundations as well. The process mirrors the commercial register entry for companies.

5. Supervision and tax exemption

   ESA or the cantonal authority takes the foundation under supervision; charitable foundations apply to the cantonal tax administration for exemption in parallel.

Foundation, company or association — which vehicle?

The foundation competes with two neighbours. Against the association (Verein): the Swiss verein is member-governed, free to set up and flexible to change — but it belongs to its members' will, while a foundation locks purpose and assets beyond anyone's later control. Against the company: a holding company distributes profits to shareholders, a foundation has none — it can hold participations, but every franc must ultimately serve the purpose. The practical selector: recurring member activity → association; permanent dedicated wealth → foundation; profit and investors → GmbH or AG.

Running costs and obligations

A foundation keeps accounts and prepares annual statements, appoints an auditor (small foundations can request exemption from the supervisory authority), reports annually to its supervisor, and — without tax exemption — pays profit and capital taxes. Budget CHF 3'000–6'000 per year for a lean charitable foundation's administration, audit and reporting (as of July 2026). Board members carry fiduciary duties comparable to company directors, which is why professional Swiss-resident board members are common in founder-abroad structures.

When a Swiss foundation is the wrong choice

• You may want the assets back. The dedication is irrevocable — once endowed, the wealth is no longer yours. Founders who need reversibility should keep assets in a company or give through existing charities.
• The budget is below CHF 50'000. Supervisors routinely reject undercapitalised classic foundations; an association or a sub-foundation under an umbrella foundation achieves the purpose at a fraction of the cost.
• Ongoing family maintenance is the goal. Art. 335 CC limits Swiss family foundations to education, equipment and hardship support — regular living allowances are not permitted, which pushes such projects towards foreign foundations or trusts, each with its own tax consequences.
• You need an operating business. Trading belongs in a company; a foundation may own the company's shares, but it is not built to run operations.

We support the full set-up — purpose drafting, deed, register entry, supervision and the tax-exemption application — and provide Swiss-resident board members where needed. Outline the endowment and purpose through the contact form for an initial assessment within one working day.