Charitable Foundations

How to Create a Charitable Foundation in Switzerland

A charitable foundation in Switzerland is an autonomous legal entity in which assets are irrevocably dedicated to a public-utility purpose. You create one in four core steps, drafting the foundation deed, notarising it as a public deed, registering it in the commercial register, and applying for tax exemption. This guide explains each step, the capital and audit requirements, and what it actually takes to qualify as tax-exempt.

Key takeaways

• A charitable foundation serves a public-utility purpose (education, science, culture, social or humanitarian causes) for an open circle of beneficiaries, not a single family or company.
• Swiss foundations are governed by the Swiss Civil Code (ZGB), Articles 80–89c. A foundation is created by public deed and acquires legal personality on entry in the commercial register.
• Practice expects a minimum endowment of roughly CHF 50,000, though sustainable operation usually requires considerably more.
• Tax exemption is not automatic. You must apply to the cantonal tax authority and meet strict public-utility criteria.
• Foundations are subject to audit, annual reporting and ongoing supervision by the Federal Supervisory Authority for Foundations (ESA) or a cantonal authority.

What is a charitable (public-utility) foundation?

A charitable foundation, known in German as a gemeinnützige Stiftung (public-utility foundation), is a legal entity established to pursue a non-profit purpose that benefits the general public. Unlike a Familienstiftung (family foundation), which supports a defined family, a charitable foundation must serve an open, indeterminate circle of beneficiaries. That distinction is what makes tax exemption possible; it is set out in detail in our Swiss charitable foundation tax-exemption requirements guide.

Both individuals and companies can establish one. Typical purposes include education, scientific research, arts and culture, healthcare, environmental protection, and social or humanitarian work. Many international donors also use the structure for NGO and relief work, see our note on setting up a Swiss foundation for NGO and humanitarian purposes.

The foundation has no owners. Once you dedicate assets to it, those assets belong to the foundation and must be used for the stated purpose. This irrevocable dedication is the defining feature of the Swiss model, and the reason the structure carries weight with regulators, banks and grant partners.

Two practical consequences follow from this. First, you cannot later take the assets back or redirect them to a private benefit; the dedication is permanent. Second, the purpose is fixed at formation and can be amended only with the consent of the supervisory authority, and, where the foundation is tax-exempt, the tax authority, and only for serious reasons. That is why the drafting stage carries so much weight: the purpose clause shapes every decision the foundation can make for the rest of its life. Switzerland’s appeal as a seat reflects this stability. The country hosts a large and respected charitable-foundation sector, home to more than 13,500 nonprofit organisations and charitable organisations active in philanthropy, and the combination of legal certainty, professional infrastructure and international recognition is a central reason donors choose it over less established jurisdictions.

The legal basis: Swiss Civil Code Articles 80–89c

Swiss foundations are governed by the Swiss Civil Code (Zivilgesetzbuch, ZGB), Articles 80–89c. The two articles that matter most at the formation stage are Articles 80 and 81. For the full framework, see our explainer on Swiss foundation law and Civil Code Articles 80–89.

Swiss Civil Code, Article 80 “A foundation is established by the endowment of assets for a particular purpose.”

Article 80 sets the substance: assets plus a defined purpose. Article 81 sets the form, a foundation is created either by public deed (a notarised charter) or by testamentary disposition. A foundation set up during the founder’s lifetime (inter vivos) requires notarisation.

A Swiss foundation acquires legal personality only on entry in the commercial register (Handelsregister). Until that entry, the foundation does not legally exist as a separate entity. Since 1 January 2016, all foundations must be registered to obtain legal personality.

How to create a charitable foundation: step by step

Creating a charitable foundation in Switzerland involves six stages. Here is what each one requires.

1. Define the purpose and draft the foundation deed. The deed (charter) sets out the foundation’s purpose, its initial assets, the foundation board, the registered office and the name. The purpose governs everything that follows and is difficult to change later, so it is worth drafting with care. If you intend to seek tax exemption, the deed must already contain the mandatory public-utility clauses described below.
2. Request a preliminary review (optional but recommended). Submitting a draft to the competent supervisory authority, and, where exemption is sought, to the cantonal tax office, surfaces problems before notarisation and avoids costly amendments.
3. Notarise the foundation deed. Under Article 81 ZGB, an inter vivos foundation is established by public deed before a Swiss notary, who confirms the founder’s identity and the lawfulness of the purpose.
4. Register in the commercial register. Filing the notarised deed with the Handelsregister gives the foundation its legal personality. From this point the foundation exists as an autonomous entity.
5. Apply for tax exemption. If the foundation genuinely serves a public utility, you apply to the cantonal tax authority for exemption (see the next section). Read our Swiss charitable foundation tax-exempt setup guide for the practical workflow.
6. Set up auditing, reporting and supervision. Appoint an auditor (unless waived), establish annual financial reporting, and confirm whether the foundation falls under federal (ESA) or cantonal supervision.

For a broader view of the whole process and how charitable setup fits alongside family and corporate structures, see our complete guide to Swiss foundations.

Tax exemption: criteria and process

This is the section most founders care about, and the one where honesty matters most. Tax exemption for a charitable foundation is neither automatic nor unconditional. It must be applied for, and it is granted by the competent cantonal tax authority after a substantive review.

The legal basis is Article 56, letter g of the Federal Direct Tax Act (DBG/LIFD), mirrored in the cantonal Tax Harmonisation Act (StHG). Practice follows the Federal Tax Administration (ESTV) Circular No. 12 of 8 July 1994.

The criteria

To qualify, a foundation must meet all of the following:

• Public utility / general interest. The activity must benefit an open, indeterminate circle of beneficiaries. A foundation that benefits a family, its own members, or a single profession does not qualify. Geographic limits (for example, a specific region) are permitted.
• Altruism / no self-interest. The foundation and its members must subordinate their own interests; the activity must be genuinely disinterested.
• Irrevocable and exclusive dedication. The assets must be dedicated exclusively and irrevocably to the public-utility purpose, and this must be enshrined in the statutes.
• Actual activity. The purpose must be genuinely pursued. A purpose mentioned only in the statutes, without real implementation, is not sufficient.

Mandatory statutory clauses

The articles of association must include three clauses that tax authorities treat as essential:

1. A prohibition on distributing profits to founders, board members or related parties.
2. The irrevocable allocation of funds to the stated purpose.
3. On liquidation, the transfer of any remaining assets to another tax-exempt entity pursuing a similar purpose.

In borderline cases, it is prudent to obtain a formal tax ruling before proceeding, to secure certainty. For the exemption rates and the wider tax picture, see Swiss foundation tax benefits and exemption rates.

Cost and capital

Swiss law sets no statutory minimum capital for a foundation. In practice, however, supervisory authorities expect an endowment that is adequate for the purpose, and around CHF 50,000 is the figure most commonly cited as a working minimum. The endowment need not be cash, real estate, securities or other assets are accepted, subject to valuation and liquidity checks. A foundation intended to make regular grants will typically need substantially more to operate sustainably without eroding its capital.

For detailed figures and ongoing-cost estimates, see our Swiss foundation cost, fees and capital requirements page.

Choosing a canton

Although foundation law is federal, the canton of the registered office affects which authority supervises the foundation and how the local tax office handles exemption. Zug, Zurich, Geneva and Basel are common seats, each with its own administrative culture and processing practice. Cantonal practice also evolves: in February 2024, for example, the canton of Zurich amended its tax-exemption practice to expressly permit entrepreneurial funding models.

We compare the leading options in detail in the best Swiss cantons for a charitable foundation: Zug, Zurich and Geneva.

Governance and ongoing compliance

A foundation is run by its foundation board (Stiftungsrat), which is responsible for pursuing the purpose and managing the assets. The foundation needs a registered office in Switzerland, and Swiss practice expects at least one Swiss-resident board member (two where collective signatory rules apply).

Supervision depends on scope. The Federal Supervisory Authority for Foundations (ESA, Eidgenössische Stiftungsaufsicht) oversees foundations active nationally or internationally; a cantonal authority supervises those active within a single canton. You can read more in our guide to Swiss foundation supervisory authority requirements.

Foundations must keep proper accounts and, under Article 83b ZGB, generally appoint an auditor. The supervisory authority may waive the audit requirement for small foundations whose balance sheet stays below CHF 200,000 over two successive years and which do not solicit public donations. Larger foundations face an ordinary audit once they exceed two of three thresholds (total assets CHF 20 million, revenue CHF 40 million, 250 full-time employees). Our Swiss foundation audit and reporting requirements guide sets out the obligations in full.

Beyond the statutory minimum, the Swiss Foundation Code 2021 is the recognised good-governance benchmark. First published in 2005 and now in its fourth, fully revised edition, it frames effective foundation governance around four principles, effectiveness, checks and balances, transparency, and social responsibility, supported by a set of practical recommendations. The Code is a self-regulatory instrument rather than binding law, but supervisory authorities, banks and grant partners increasingly treat adherence to it as a marker of a well-run foundation. Building its principles into your statutes and board procedures from the outset is far easier than retrofitting them later.

In day-to-day terms, ongoing compliance means keeping proper accounts, filing an annual report with financial statements to the supervisory authority, submitting board and statute changes for approval, and ensuring the foundation continues to pursue its purpose in practice, the same “actual activity” that underpins its tax exemption. Where supervision or audit is involved, it is worth coordinating those obligations from the first year rather than treating them as an afterthought.

How long does it take?

A straightforward charitable foundation can typically be established in around four to eight weeks, depending on drafting, any preliminary review, and how quickly the commercial register and tax authority respond. Seeking a preliminary review adds time at the front end but reduces the risk of rejection or rework later.

If you are planning a charitable foundation in Switzerland, our Zug-based team can guide you from purpose definition through registration and tax exemption. Speak to a Swiss foundation lawyer.

Frequently asked questions

How do I start setting up a charitable foundation in Switzerland? You begin by defining the foundation’s public-utility purpose and drafting the foundation deed, which sets out the purpose, assets, board and registered office. The deed is then notarised as a public deed and filed with the commercial register, after which you apply for tax exemption.

What is the minimum capital for a charitable foundation in Switzerland? Swiss law sets no statutory minimum, but supervisory authorities in practice expect an endowment that is adequate for the purpose, with around CHF 50,000 commonly cited as a working minimum. The endowment may consist of cash or suitable in-kind assets, and grant-making foundations usually need considerably more.

Is a Swiss charitable foundation automatically tax-exempt? No. Tax exemption is neither automatic nor unconditional. You must apply to the competent cantonal tax authority and demonstrate that the foundation serves a genuine public utility, acts altruistically, and dedicates its funds exclusively and irrevocably to the purpose.

How long does it take to create a charitable foundation? A straightforward charitable foundation can usually be set up in around four to eight weeks, covering drafting, notarisation, commercial-register entry and the tax-exemption application. A preliminary review with the supervisory authority can add time but reduces later risk.

Can a foreigner create a charitable foundation in Switzerland? Yes. Both individuals and companies, Swiss or foreign, can establish a charitable foundation. The foundation needs a registered office in Switzerland, and Swiss practice expects at least one Swiss-resident board member.

What is the difference between a charitable foundation and a family foundation in Switzerland? A charitable foundation (gemeinnützige Stiftung) must serve an open, indeterminate circle of beneficiaries and may qualify for tax exemption. A family foundation (Familienstiftung) is restricted to supporting a defined family and cannot obtain charitable tax-exempt status under Article 56(g) of the Federal Direct Tax Act. The distinction in beneficiary class is what determines eligibility for tax exemption.

Does the foundation deed need to be notarised? Yes. Under Article 81 of the Swiss Civil Code, a foundation established during the founder’s lifetime (inter vivos) must be created by public deed, that is, a notarised charter signed before a Swiss notary. Notarisation confirms the founder’s identity and the lawfulness of the purpose before the deed is filed with the commercial register.

Can the purpose of a charitable foundation be changed after it is established? In principle yes, but only for serious reasons and only with the consent of the competent supervisory authority, and, where the foundation is tax-exempt, the tax authority as well. The strict rules on purpose amendment under Articles 85–86a ZGB reflect the fact that the purpose is fixed at formation; this is why careful drafting at the outset matters so much.

Which authority supervises a Swiss charitable foundation? Supervision depends on the geographic scope of the foundation’s activities. The Federal Supervisory Authority for Foundations (ESA, Eidgenössische Stiftungsaufsicht) oversees foundations that operate nationally or internationally. A cantonal supervisory authority handles foundations whose activities are confined to a single canton.

Must a charitable foundation appoint an auditor? Generally yes. Under Article 83b ZGB, foundations are required to appoint an auditor. The supervisory authority may waive this requirement for small foundations whose balance sheet remains below CHF 200,000 over two successive years and that do not solicit public donations. Larger foundations that exceed two of three statutory thresholds (total assets CHF 20 million, revenue CHF 40 million, 250 employees) must undergo an ordinary audit.

Can a charitable foundation solicit donations from the public? Yes, provided this is consistent with the foundation’s stated purpose and the applicable fundraising rules. However, if a small foundation does solicit public donations, it loses the ability to obtain a waiver from the audit requirement under Article 83b ZGB, regardless of the size of its balance sheet.

What statutory clauses must appear in a charitable foundation’s deed to secure tax exemption? Swiss tax authorities require three core clauses: a prohibition on distributing profits or assets to founders, board members or related parties; an irrevocable allocation of funds exclusively to the stated purpose; and a provision ensuring that on dissolution any remaining assets pass to another tax-exempt entity pursuing a similar purpose. Missing or poorly drafted clauses are a common reason for delays or refusals.

Can a charitable foundation be set up by will rather than by public deed? Yes. Article 81 ZGB provides that a foundation may be created either by public deed (inter vivos) or by testamentary disposition. A foundation established by will takes effect on the testator’s death and must still be registered in the commercial register to acquire legal personality. Testamentary foundations require careful drafting in the will, as the founder will not be present to clarify the purpose after death.

Is the Swiss Foundation Code legally binding? No. The Swiss Foundation Code 2021 is a self-regulatory governance benchmark, not a binding statute. First published in 2005 and now in its fourth edition, it sets out principles and recommendations on effectiveness, checks and balances, transparency and social responsibility. Supervisory authorities, banks and grant partners increasingly treat adherence as a marker of a well-governed foundation, but non-compliance carries no direct legal sanction.

This article is general information about Swiss foundation law and is not a substitute for formal legal or tax advice. Tax-exemption outcomes depend on the specific facts of each case and the review of the competent authorities.

Sources

• Swiss Civil Code (ZGB), Articles 80–89c, Fedlex SR 210: https://www.fedlex.admin.ch/eli/cc/24/233_245_233/en
• Establishing Foundations in Switzerland: A Guide, Kendris (4 Dec 2024): https://www.kendris.com/en/news-insights/2024/12/04/establishing-foundations-in-switzerland-a-guide/
• Federal Supervisory Authority for Foundations (ESA), Federal Department of Home Affairs (EDI): https://www.edi.admin.ch/edi/de/home/das-edi/organisation/fachstellen/eidgenoessische-stiftungsaufsicht.html
• Swiss Audit and Reporting Obligations, Grant Thornton Switzerland: https://www.grantthornton.ch/globalassets/1.-member-firms/switzerland/services/audit/audit-industries/swiss-audit-and-reporting-obligation-en.pdf
• Tax Exemption for Associations and Foundations, RSM Switzerland: https://www.rsm.global/switzerland/en/news/tax-exemption-associations-and-foundations-opportunity-governed-strict-regime
• Tax Exemption of Charitable Institutions (Art. 56 lit. g DBG; SFTA Circular No. 12), Reichlin Hess (12 Sep 2022): https://www.reichlinhess.ch/en/2022/09/12/tax-exemption-of-charitable-institutions/
• Charitable Foundations in Switzerland, Centro Law: https://www.centrolaw.ch/en/insights/detail/charitable-foundations-in-switzerland
• Swiss Foundation Code 2021, SwissFoundations: https://www.swissfoundations.ch/publikationen/swiss-foundation-code-2021/