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11 key facts about non-profit foundations in Switzerland
- Switzerland has 13,169 foundations with a total capital of almost CHF 100 billion. Half of the Swiss non-profit foundations were established in the last 20 years. In 2018, 301 new foundations were established.
- With a density of 15.5 foundations per 10,000 inhabitants, Switzerland has six times more foundations per capita than the USA or Germany.
- A foundation is legally defined as an asset that is dedicated to a specific purpose and managed by a foundation board on a fiduciary basis. A foundation belongs to itself, so to speak. It has no owners or members and can only be liquidated by the supervisory authorities.
- Foundations are the only forms of public benefit organization, are tax-exempt and are controlled by two public authorities - the supervisory authority and the tax authority. They are also subject to a legal auditing obligation.
- Anyone can establish a foundation, including legal entities and public authorities. Most supervisory authorities require a minimum initial capital of CHF 50,000.
- Anyone who sets up a foundation permanently disposes of the assets he has invested for this purpose. These funds cannot be returned to the founders. Therefore, a public utility foundation cannot be conceived as a tax saving model.
- The founder of a tax-exempt foundation receives the same tax breaks as donors. They can generally deduct up to 20% of their taxable income.
- A donor foundation is a charitable foundation that does not rely on donations or co-grants to fund its activities. Consumable foundations carry out their support activities from the income of their assets themselves.
- A foundation can be created for very different purposes. It may be for the management of an enterprise, or it may have an ecclesiastical character, or it may be of public utility. The founders are free to define the purpose of their foundation. However, only charitable purposes can be exempted from taxation.
- Like donations or voluntary work, foundations are a commitment to civil society. They complement, but do not replace, government action. Foundations support a wide variety of projects, initiatives, and organizations whose diversity reflects our society in its plurality.
- In Switzerland, there are also so-called family foundations, whose sole purpose is to pass on the family assets to other family members, under certain management rules. They are similar to the Trust.
The creation of a foundation, the allocation of assets to this foundation and the status of the foundation have a decisive impact on the tax consequences of such a step. We can assist you in all stages of such process, from the feasability examination to the final implementation, including negotiations with the tax authorities.
