How do I set up a foundation in Switzerland?

There may be many different reasons for setting up your own non-profit foundation. The absence of any heirs, experiences that have left a deep impression on you, the desire to preserve your own art collection for the long term or the wish to give something back to society out of gratitude for leading a financially successful life yourself are just some of the possible reasons.

Before setting up a foundation in Switzerland, you should first give some thought to its purpose. What do you want to achieve with the foundation and what impact do you want it to have on society and the environment? This is important for when you define the purpose in the foundation statutes, as these provide guidelines that are decisive for the long-term execution of the purpose. Once the statutes have been notarised, amending them at a later date is a very time-consuming and costly process.

Duties of the Foundation Board

The Foundation Board is the highest body of a non-profit foundation. For this reason, it is important to appoint independent people with the necessary knowledge and skills who share your philanthropic goals and wishes. The Foundation Board is responsible for defining the strategy and organising the foundation’s management. An independent foundation usually has three to five Foundation Board members.

What it costs to set up a foundation

One of the first questions concerns the funding of the foundation. The one-off start-up costs are around CHF 10,000. The annual administrative costs for accounting, auditing, the foundation supervision fees, etc. are roughly the same amount or higher. Accordingly, it is important to pay careful consideration to whether there are sufficient foundation assets for the foundation’s purpose and the costs. The Rütli-Foundation recommends capital of CHF 10 million to set up an independent foundation. This amount can be funded over a certain period of time. Alternatively, non-cash assets can also be used. However, the supervisory authority stipulates minimum start-up capital of CHF 50,000.

Sequence of the main steps to be completed:

• The deed of foundation and the set of regulations are drawn up.
• The registered office of the foundation and the competent supervisory authority are determined.
• The competent authority performs a preliminary examination of the deed of foundation.
• The competent authority performs a preliminary examination to satisfy itself of the foundation’s tax-exemption status.
• The deed of foundation is notarised.
• An application is lodged for supervision by the competent authority.
• An application for tax-exemption status is lodged with the tax authorities.

Would you like to receive preliminary advice on setting up a foundation in Switzerland? We look forward to hearing from you.