As specialists in finance, accounting, and taxes, we understand how important it is to be knowledgeable about the various legal forms available for starting a business in Switzerland. One of the most significant options is the foundation, a legal entity with distinct features that can offer various advantages depending on the nature of your business.
Key Features of a Foundation
A foundation is a legal entity created through the endowment of assets by a founder. Unlike other legal structures, a foundation does not have members or shareholders; instead, it operates based on a specific purpose defined by the founder. The foundation’s assets are irrevocably dedicated to achieving this purpose.
Advantages:
- Asset Protection: Once assets are transferred to the foundation, they are protected from personal liabilities.
- Long-term Purpose: Foundations are ideal for ensuring that a specific purpose or mission is pursued over the long term.
- Tax Benefits: Depending on the foundation’s purpose, it may benefit from tax exemptions, especially if it is of a charitable nature.
Disadvantages:
- Rigidity: The purpose of a foundation is generally fixed and can be challenging to change.
- Complex Administration: Foundations require careful management and adherence to strict regulatory standards.
Establishing a Foundation in Switzerland
- Drafting the Foundation Deed:
- The foundation deed is the founding document, which must clearly state the foundation’s purpose, initial assets, and the rules governing its operations.
- The deed must be in writing and signed by the founder or founders.
- Endowment of Assets:
- The founder must transfer assets to the foundation at the time of its creation. These assets can be in the form of cash, securities, real estate, or other valuables.
- The initial endowment must be sufficient to achieve the foundation’s purpose.
- Registration:
- The foundation must be registered in the Commercial Register. Registration involves submitting the foundation deed, proof of asset transfer, and any additional required documentation.
- Upon registration, the foundation gains legal personality.
- Management and Supervision:
- A foundation is managed by a board of trustees, responsible for ensuring that the foundation’s purpose is pursued effectively.
- Swiss law requires that foundations be supervised by a regulatory authority, ensuring compliance with the law and the foundation’s deed.
- Compliance and Reporting:
- Foundations are subject to ongoing compliance obligations, including regular financial audits, reporting to regulatory authorities, and maintaining accurate records.
- Charitable foundations may have additional reporting requirements to maintain their tax-exempt status.
Conclusion
Choosing to establish a foundation in Switzerland is a decision that requires careful consideration of your business goals, the assets involved, and the long-term mission you wish to achieve. With proper planning and professional guidance, a foundation can be a powerful tool for achieving specific objectives while benefiting from the legal and tax advantages offered in Switzerland.
Table: Key Steps in Establishing a Foundation in Switzerland
| Step | Description |
| Drafting the Foundation Deed | Defining the purpose, rules, and initial assets of the foundation. |
| Endowment of Assets | Transferring sufficient assets to the foundation. |
| Registration | Registering the foundation in the Commercial Register. |
| Management and Supervision | Appointing a board of trustees and ensuring regulatory compliance. |
| Compliance and Reporting | Ongoing obligations, including financial audits and reporting to maintain legal status. |
