Family Foundations

Swiss Family Foundation (Familienstiftung): Definition & How to Establish One

A Swiss family foundation (Familienstiftung) is an autonomous legal entity in which assets are irrevocably dedicated to supporting members of one or more families. Unlike a charitable foundation, it serves a private rather than a public-utility purpose. Under Article 335 of the Swiss Civil Code its purposes are tightly limited, it may fund the education, endowment or support of relatives, but not their general living costs, and, with limited exceptions, it is generally not tax-exempt.

This guide explains what a Familienstiftung is, the law that governs it, what it can and cannot do, how to establish one, and where the 2024 reform may lead.

By Hansruedi Mueller, Swiss foundation lawyer, Foundations in Switzerland. Published 4 June 2026 · Last updated 4 June 2026.

Key takeaways

• A Swiss family foundation is a private legal entity that dedicates assets to one or more families, governed by the Swiss Civil Code, Article 335 and Articles 80–89.
• Article 335 permits only education, endowment and support of family members. Distributions for general maintenance (ongoing living expenses) are not allowed under current law.
• Family foundations are generally not tax-exempt, unlike charitable foundations.
• They are exempt from ordinary supervision by the Federal Supervisory Authority for Foundations (ESA) under Article 87, but since 2016 they must be entered in the commercial register to acquire legal personality.
• Establishment follows six steps: define a permitted purpose, endow assets, draft the deed and statutes, notarise, register, and appoint the foundation board.
• The Family Foundation Reform 2024 has been adopted as a mandate to Parliament, but it is not yet law; the Article 335 restriction still applies.

What is a Swiss family foundation (Familienstiftung)?

A family foundation (Familienstiftung) is an autonomous legal entity created when a founder irrevocably dedicates assets to a defined family. The assets are no longer owned by the founder or by the beneficiaries, a foundation has no owners or members, only a purpose and a governing body, the foundation board (Stiftungsrat). Under the Swiss Civil Code, Article 80, a foundation is an autonomous legal entity in which assets are irrevocably dedicated to a particular purpose.

What distinguishes a family foundation is that its purpose is private: it benefits a closed circle of relatives rather than the public. This sets it apart from a charitable foundation, which must serve a public-utility purpose and which can, in turn, qualify for tax exemption.

Families typically consider a Familienstiftung to:

• hold and preserve assets across generations within one structure;
• support relatives’ education and development in a disciplined, rules-based way;
• separate family assets from personal estates and business liabilities;
• give cross-border families a recognised Swiss legal vehicle.

It is a structuring and continuity tool, not, as we explain below, a tax-saving one.

Legal basis: Article 335 and Articles 80–89 ZGB

Two parts of the Swiss Civil Code (Zivilgesetzbuch, ZGB) matter here.

General foundation law sits in ZGB Articles 80–89. These articles define what a foundation is, how it is created, how it is governed, and how it is supervised and dissolved. They apply to every Swiss foundation, family foundations included. For the full picture, see our guide to Swiss foundation law (ZGB Articles 80–89).

The special rule for family foundations is ZGB Article 335. It is short, but it is the single most important provision for anyone weighing a Familienstiftung.

Article 335 of the Swiss Civil Code (paraphrased). Assets may be dedicated to a family by establishing a family foundation to meet the costs of the upbringing and education, the endowment, or the support of family members, or for similar purposes. The creation of family entails (Familienfideikommisse, perpetual settlements binding assets to a lineage) is prohibited.

We deliberately paraphrase rather than present a verbatim quotation; the substance above is consistent across the leading legal sources. For a clause-by-clause analysis, read our dedicated explainer on Article 335 of the Swiss Civil Code.

Permitted purposes and the key limitation

This section is where most misunderstandings arise, so we set out both sides plainly.

What a family foundation may fund

Article 335 allows three categories of purpose, and Swiss courts treat the list as exhaustive:

• Education and upbringing, schooling, university, vocational training, professional advancement of family members.
• Endowment (Ausstattung), a one-off provision at a defining life event, for example to help a relative start out.
• Support (Unterstützung), targeted assistance in hardship, illness or special need.

A “similar purpose” must stay close to these three. The beneficiary circle is limited to a defined family, blood relatives, spouses and adopted members. Within these permitted purposes, distributions are discretionary: the foundation charter defines the criteria, and the Stiftungsrat decides whether and how much to allocate to each beneficiary.

What it cannot do (the Article 335 restriction)

Here is the limitation that surprises many founders. A Swiss family foundation may not distribute funds for general maintenance, that is, the ordinary, ongoing living expenses of family members. The Swiss Federal Court reads Article 335 restrictively. A family foundation may not operate as an unconditional “family bank”, may not simply raise the family’s standard of living or prestige, and may not replace a parent’s financial responsibility. It also may not be used to create a perpetual entail (Familienfideikommiss), which is expressly prohibited.

Because of these limits, classic family foundations are comparatively rare in Switzerland today. Families seeking broader flexibility often compare a foundation with a trust, a choice we examine in our foundation versus trust comparison.

How to establish a Swiss family foundation

Setting up a Familienstiftung follows six steps. Each one rewards careful legal drafting, because the purpose and statutes govern everything that follows.

1. Define a permitted purpose. The purpose must fit within Article 335, education, endowment or support, and must not contravene the law or public morals. Get this wrong and the foundation can be challenged.
2. Endow the assets. The founder irrevocably dedicates assets to the foundation. They should be adequate for the stated purpose; a foundation with too little capital to serve its purpose may not be confirmed.
3. Draft the foundation deed and statutes (the foundation charter). These set out the purpose, the beneficiary circle, the distribution rules, and the composition and powers of the foundation board (Stiftungsrat). Board duties are explained in our guide to the Swiss foundation board.
4. Notarise the foundation deed. A family foundation is created by public deed before a notary, or by testamentary disposition (a will or inheritance contract).
5. Register in the commercial register. Since 2016 this step is constitutive: the foundation acquires legal personality on entry. Name, seat, purpose and board become matters of public record.
6. Appoint the board and begin administration. The Stiftungsrat takes office, keeps proper accounts, and makes only statute-compliant distributions.

Unlike a charitable foundation, a family foundation does not need approval from the ESA, and it is generally exempt from the statutory audit requirement. Instead, the civil courts handle any complaints brought by beneficiaries. For timelines and budgets common to all Swiss foundations, the costs and process in our wider setup material are a useful benchmark.

Privacy and confidentiality, with the registration caveat

Family foundations are often described as “private”, and in important respects they are: there is no ESA supervisory file, generally no audit, and no public register of beneficiaries or distributions. The statutes are not broadly published.

That said, the common claim that a family foundation involves “no registration” is out of date. Since 1 January 2016 every new family foundation must be entered in the commercial register to exist as a legal person, and foundations established earlier had until 31 December 2020 to register. The register entry, name, seat, purpose and board members, is public. Privacy here means a low public profile and limited disclosure, not invisibility. We unpack this fully in our analysis of family foundation privacy and confidentiality.

Asset protection and succession across generations

A core reason families establish a Familienstiftung is to hold wealth in a structure that outlives any single individual. Because the assets belong to the foundation, they are separated from the founder’s and beneficiaries’ personal estates, which can reduce exposure to private disputes and business liabilities. This is asset protection in the proper sense, orderly separation and continuity, not concealment, and it does not licence schemes that improperly defeat creditors or Swiss forced-heirship rights.

Used well, a family foundation supports a long-term wealth management and generational planning strategy: disciplined distributions for education and support, and a stable vehicle for succession across generations. For the detailed mechanics, see our pages on asset protection through a family foundation, wealth planning and estate planning and wealth transfer, as well as real family foundation case studies.

Tax treatment: the honest reality

Tax is where expectations must be managed carefully. A Swiss family foundation is generally not tax-exempt. The exemption available to genuine charitable foundations does not extend to a private family vehicle.

In practice, this means:

• The foundation is taxed as a separate legal entity, corporate income tax on its net income and, in most cantons, capital tax on its net assets.
• Funding the foundation can trigger gift or inheritance tax at cantonal level, with rates depending on the canton and the relationship between founder and beneficiaries.
• Distributions to beneficiaries are generally taxed as income in the recipient’s hands, which can produce economic double taxation, the foundation is taxed, and then the beneficiary is taxed.

The sensible conclusion is that a Familienstiftung is chosen for structure, governance and continuity, not for tax savings. For how Swiss foundation taxation works across vehicles, see Swiss foundation tax benefits and exemption rates. Tax outcomes are always case-specific, and we assess them individually before any structure is recommended.

The 2024 family foundation reform: what may change

Swiss lawmakers have recognised that the Article 335 restriction makes the family foundation uncompetitive against foreign trusts and Liechtenstein structures. In response, Parliament adopted Motion 20.4445, tabled by Councillor of States Thierry Burkart, to “strengthen the Swiss family foundation” by lifting the ban on maintenance distributions. Both chambers approved it in early 2024, the National Council on 27 February 2024, and the Federal Council has been tasked with drafting a bill to amend Article 335.

The aim is to let family foundations make maintenance distributions and serve genuine estate and asset planning. We should be precise about status, though: this is a mandate to legislate, not yet enacted law. As of mid-2026, no amended statute is in force and the existing Article 335 limitation still applies. We track developments in our update on the 2024 family foundation reform.

Frequently asked questions

What is a Swiss family foundation (Familienstiftung)?

It is an autonomous private legal entity in which a founder irrevocably dedicates assets to support a defined family. It is governed by the Swiss Civil Code, Article 335 and Articles 80–89, and it serves family rather than public purposes.

What purposes are allowed under Article 335 ZGB?

Only three: the education and upbringing, the endowment (Ausstattung), and the support (Unterstützung) of family members, or similar purposes. Swiss courts treat this list as exhaustive.

Can a Swiss family foundation pay family members’ living expenses?

No. Under current law, distributions for general maintenance, ordinary, ongoing living costs, are not permitted. Distributions must serve education, endowment or support. The 2024 reform aims to change this, but it is not yet in force.

Are Swiss family foundations tax-exempt?

Generally no. Unlike charitable foundations, family foundations do not qualify for tax exemption. They pay corporate income and capital tax, funding can attract gift or inheritance tax, and distributions are usually taxed as income to the beneficiary.

Do family foundations have to be registered and supervised?

They are exempt from ordinary supervision by the Federal Supervisory Authority for Foundations (ESA) under Article 87, with the civil courts handling beneficiary complaints. However, since 2016 every family foundation must be entered in the commercial register to acquire legal personality.

What is changing with the 2024 family foundation reform?

Parliament adopted a motion in 2024 directing the Federal Council to allow maintenance distributions, making the vehicle suitable for estate and asset planning. It is a legislative mandate; the amended law is not yet enacted.

Who can be a beneficiary of a Swiss family foundation?

Beneficiaries must be members of the defined family circle, blood relatives, spouses, and adopted members as identified in the foundation charter. Unrelated third parties and the general public cannot be beneficiaries. The charter must define the family circle with sufficient precision; an imprecise or open-ended beneficiary clause can be challenged on the ground that it extends beyond the private family purpose permitted under Article 335.

Can a foreign national establish a Swiss family foundation?

Yes. Swiss foundation law imposes no nationality requirement on founders. A foreign national may establish a Familienstiftung provided the foundation is duly constituted under Swiss law, notarised deed, registration in the Swiss commercial register, and a defined permitted purpose under Article 335. Cross-border founders should also consider whether their home country’s laws impose tax or reporting obligations when assets are transferred to a foreign foundation, and should take advice in both jurisdictions.

How much does it cost to set up a Swiss family foundation?

There is no statutory minimum capital for a family foundation, but the endowed assets must be adequate to fulfil the stated purpose. One-off establishment costs include notary fees, commercial-register fees, and legal drafting. Ongoing costs include foundation-board administration and, where applicable, accounting. Because a family foundation is generally exempt from the statutory audit obligation, recurring compliance costs are lower than for a supervised charitable foundation. Overall budgets vary considerably with asset complexity and legal scope.

What assets can be transferred into a Swiss family foundation?

A founder may endow a Familienstiftung with cash, securities, real estate, business shares, intellectual property rights, or other property of value. There is no restriction on asset class under Swiss foundation law, but the practical fit of an asset type must be assessed: real estate held by a foundation remains subject to cantonal property taxes and transfer duties, and illiquid assets must be compatible with the foundation’s ability to make permitted distributions. The foundation acquires legal title on endowment; the assets are no longer part of the founder’s estate.

Can a Swiss family foundation hold a family business?

A family foundation may hold shares in an operating company, which is a common reason families choose the structure, it keeps a business together after the founder’s death rather than splitting it among heirs. However, the foundation’s permitted purpose under Article 335 still governs how income or sale proceeds are distributed: they must serve education, endowment or support, not general maintenance. If the primary goal is business succession rather than family support distributions, specialist advice is needed on whether a foundation, a holding company, or a combination is the more appropriate structure.

Can beneficiaries also serve on the foundation board?

Swiss law does not expressly prohibit a beneficiary from serving on the Stiftungsrat, but it creates a significant governance concern: a board member who can influence their own distributions faces an obvious conflict of interest. Good practice, and the Swiss Foundation Code, strongly recommends that the board maintain decision-making independence from beneficiaries, and many charters restrict or prohibit beneficiary membership. Where a founder-beneficiary also sits on the board, the conflict risk is heightened and should be addressed explicitly in the statutes or by reserving distribution decisions to independent board members.

Can a Swiss family foundation be dissolved?

Yes. A Familienstiftung may be dissolved if its purpose has been achieved or can no longer be achieved, if its assets are exhausted, or in other circumstances specified in the charter or provided by law. Because family foundations are exempt from ESA supervision, dissolution is handled by the civil courts on application rather than by an administrative authority. On dissolution, the remaining assets are distributed according to the charter; they do not revert to the founder’s estate automatically. The founder should address the dissolution scenario when drafting the charter.

How does a Swiss family foundation differ from a Liechtenstein family foundation?

Both are private-law foundations dedicated to family purposes, but they differ in important respects. A Liechtenstein family foundation (Liechtensteinische Familienstiftung) under the Liechtenstein Persons and Companies Act permits broader distributions, including general maintenance, which Article 335 of the Swiss Civil Code currently forbids. Liechtenstein also offers a more flexible governance framework and, in some cases, different tax treatment. The 2024 Swiss reform mandate aims to narrow this gap, but until the amendment is enacted, Liechtenstein remains more flexible in scope. Swiss-connected families should weigh legal certainty, banking infrastructure, and regulatory reputation when choosing between the two jurisdictions.

Speak to a Swiss foundation lawyer

If you are weighing a Swiss family foundation for your family’s wealth and succession, our Zug-based team can confirm whether a Familienstiftung fits your situation and structure it correctly under Swiss law. Book a consultation.

This article is general information and not a substitute for formal legal advice. Foundation, tax and succession outcomes depend on your specific circumstances; please consult us before acting.

Sources

1. Natalie Peter, “Family Foundations in Switzerland”, University of Zurich / Trusts & Trustees (2020), Article 335 permitted purposes; prohibition of family fideicommissa. https://www.ius.uzh.ch/dam/jcr:a1562aba-eb57-4f34-9fde-39eed8176fa2/Trusts&Trustees%206.%20Juli%202020.pdf (accessed 4 June 2026)
2. Swiss Civil Code (ZGB), Articles 80 and 87, definition of a foundation; “family foundations … not subject to the supervisory authority” (WIPO Lex). https://www.wipo.int/wipolex/en/legislation/details/20030 (accessed 4 June 2026)
3. PwC Switzerland, “Opportunities for the Swiss family foundation”, Article 335 maintenance ban; tax treatment; 2024 reform. https://www.pwc.ch/en/insights/regulation/new-opportunities-for-the-swiss-family-foundation.html (accessed 4 June 2026)
4. Global Law Experts, “Family Foundations Switzerland”, exhaustive permitted purposes; restrictive Federal Court reading; no tax exemption. https://globallawexperts.com/family-foundations-switzerland/ (accessed 4 June 2026)
5. Deloitte Switzerland (Tax & Legal blog), “Registration of family foundation with the Commercial Register by 31 December 2020”, 2016 registration obligation and transitional deadline. https://blogs.deloitte.ch/tax/2020/10/registration-of-family-foundation-with-the-commercial-register-by-31-december-2020.html (accessed 4 June 2026)
6. Online Kommentar zum Schweizerischen Privatrecht, “Art. 87 CC”, family and ecclesiastical foundations exempt from supervisory authority; audit exemption. https://onlinekommentar.ch/en/kommentare/zgb87 (accessed 4 June 2026)
7. STEP Lausanne, “Taxation in Switzerland of Trusts and Foundations”, income and capital tax on family foundations; distributions taxed as income; gift/inheritance tax on funding. http://www.step-lausanne.org/wp-content/uploads/pdfs/handouts/21%20April%202015.pdf (accessed 4 June 2026)
8. Reichlin Hess / Mondaq, “No Swiss Trust – But Liberalisation Of The Family Foundation”, Motion 20.4445 (Burkart); chamber approval in 2024; Federal Council mandated to draft a bill. https://www.mondaq.com/trusts/1471212/no-swiss-trust-but-liberalisation-of-the-family-foundation (accessed 4 June 2026)
9. SwissFoundations, “Swiss Foundation Code 2021”, governance principles and recommendations. https://www.swissfoundations.ch/wp-content/uploads/2021/06/9783727206849.pdf (accessed 4 June 2026)