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Swiss foundation glossary of terms

Glossary

Swiss Foundation Glossary

Plain-English definitions of 57 key Swiss foundation terms, both the German originals and the English equivalents. Each entry links to the in-depth article where the concept is explored further.

By Hansruedi Mueller, Swiss foundation lawyer — published 4 June 2026

Jump to: The Foundation Itself Types of Foundation Governance Formation and Registration Supervision and Compliance Tax Trusts and Cross-Border Structures Key Legal Articles Other Frequently Used Terms
Disclaimer. The definitions below are general information, not legal or tax advice. Swiss law is precise; the same word can carry different weight in different statutory contexts. Always seek qualified advice before acting.

Entries are grouped by theme. German terms appear in italics, as is the convention across this site.

The Foundation Itself

Foundation Stiftung
An autonomous legal entity created by irrevocably dedicating assets to a defined purpose. Under the Swiss Civil Code (Zivilgesetzbuch, ZGB), Article 80, a foundation has no owners, members or shareholders, only a purpose and the assets committed to it. It acquires legal personality on entry in the Commercial Register. See → Swiss foundation complete guide
Foundation Charter / Foundation Deed Stiftungsurkunde
The founding document executed before a Swiss notary by public deed (or by will). It defines the foundation's purpose, governing bodies, seat, initial endowment and rules. Once filed and registered, the charter may only be altered by the supervisory authority on grounds prescribed in the Swiss Civil Code. See → Swiss foundation law (ZGB Articles 80–89c)
Foundation Purpose Stiftungszweck
The lawful objective to which every franc of the foundation's assets is dedicated. The purpose must be stated with enough precision to guide the board and the supervisory authority. Everything the board does must serve the purpose; it cannot be changed at will. See → Swiss foundation law
Foundation Capital / Endowment Stiftungskapital
The assets irrevocably transferred to the foundation at establishment. Swiss law sets no statutory minimum capital in the Civil Code; the supervisory authority typically expects at least CHF 50,000 for a charitable foundation in practice. Capital may be contributed in cash, securities or other assets. See → Swiss foundation cost, fees and capital requirements
Legal Personality Rechtspersönlichkeit
A foundation's status as a separate legal person, distinct from its founder, board and beneficiaries. A Swiss foundation acquires legal personality only on entry in the Commercial Register (Handelsregister), not at the moment the deed is signed.
Irrevocability Unwiderruflichkeit
The defining feature of every Swiss foundation: once assets are endowed, the founder cannot reclaim them. The foundation becomes the legal owner. This irrevocability is the foundation of asset protection and of charitable tax-exempt status.
Beneficiary Begünstigte/r
A person or class of persons who may receive benefit from the foundation in accordance with its charter and purpose. A foundation has no "owners", calling a beneficiary an "owner" is legally incorrect and always to be avoided.
Founder Stifter/in
The natural or legal person who establishes a foundation by irrevocably dedicating assets to it. Any person, Swiss or foreign, resident or non-resident, may be a Swiss foundation founder. Once the charter is signed and assets contributed, the founder holds no further ownership rights over those assets. See → Setting up a Swiss foundation as a foreigner

Types of Foundation

Charitable Foundation / Public-Utility Foundation Gemeinnützige Stiftung
A foundation whose purpose serves the general public interest: education, science, culture, health or social causes. It may qualify for exemption from profit and capital tax once the cantonal tax authority approves the application. It is supervised by the Federal Supervisory Authority for Foundations (ESA) or a cantonal authority. See → How to set up a tax-exempt Swiss charitable foundation
Family Foundation Familienstiftung
A private-purpose foundation that holds assets for the benefit of one or more families. Under Swiss Civil Code, Article 335, its purpose is limited to the education, endowment (Ausstattung) or support (Unterstützung) of family members in defined situations. Pure maintenance foundations, funding general living costs, are not currently permitted. Family foundations are generally not tax-exempt and are exempt from ordinary state supervision (ZGB Article 87) though they must still be entered in the Commercial Register. See → Swiss family foundation: definition and how to establish one
Ecclesiastical Foundation kirchliche Stiftung
A foundation serving religious or spiritual purposes. Like family foundations, ecclesiastical foundations are exempt from ordinary state supervision under ZGB Article 87.
Corporate / Employee-Benefit Foundation Betriebliche Stiftung / Personalfürsorgestiftung
A foundation established by a company for the benefit of its employees, including occupational pension (second-pillar) foundations. These follow a distinct regulatory regime and are not the focus of this site.
Umbrella Foundation Dachstiftung
An established, tax-exempt charitable foundation that hosts multiple smaller sub-foundations (dependent foundations) under its single legal personality. A donor creates a named fund within the umbrella without forming a separate legal entity, no notary, no Commercial Register entry, no minimum capital. See → Swiss umbrella foundation: cost-efficient setup
Dependent Foundation / Sub-Foundation
A charitable fund created inside an umbrella foundation. It has no legal personality of its own, is not entered in the Commercial Register, and benefits from the umbrella's tax-exempt status and administration. The trade-off is reduced control: the umbrella's board holds ultimate legal authority. See → Swiss umbrella foundation
Enterprise Foundation / Holding Foundation Unternehmens- oder Holdingstiftung
A foundation whose assets consist principally of a shareholding in a company. Allows families to keep a business intact across generations while removing it from personal estates. A family foundation cannot serve as a general holding substitute under Article 335, but a charitable or mixed foundation may hold equity where the purpose permits. See → Swiss foundation vs holding company

Governance

Foundation Board Stiftungsrat
The supreme governing body of a Swiss foundation, also called the "foundation council" or "board of trustees". Under ZGB Article 83, its composition and powers are set by the foundation charter. The board administers the assets for the purpose, manages investments, and is personally liable for culpable breaches of its duties. A board of at least three members is established practice (though not a statutory requirement). See → Swiss foundation board: duties, structure and governance
Fiduciary Duty Treuepflicht
The board member's obligation to act in the foundation's sole interest and to pursue its purpose faithfully. Board members must avoid conflicts of interest and may not benefit from the foundation unless the charter specifically provides for it.
Duty of Care Sorgfaltspflicht
The board member's obligation to act with the diligence of a reasonable person in the same role: implementing decisions, overseeing management, maintaining accounts, filing annual reports and managing assets prudently.
Swiss Foundation Code 2021
A voluntary governance framework published by SwissFoundations, built on four principles: Effectiveness, Checks and Balances, Transparency and Social Responsibility. It contains 28 recommendations and is widely followed by charitable foundations, but it is not binding law. Its recommendations are distinct from Civil Code requirements throughout this site.
Foundation Secretary / Foundation Management
The administrative function that supports the board in running day-to-day operations: correspondence, minutes, filings, accounting and third-party liaison. May be delegated to a professional fiduciary or management company; ultimate responsibility remains with the board.

Formation and Registration

Notarial Public Deed öffentliche Urkunde
The formal instrument executed before a Swiss notary that brings a foundation into being. The notary records the founder's declaration, the charter text and the initial endowment. Formation by will (testamentary foundation) is also possible under ZGB Article 81.
Commercial Register Handelsregister
The official public register maintained by each Swiss canton (with a central federal portal) in which legal entities are recorded. A Swiss foundation acquires legal personality only on its entry here. The entry is public and shows the foundation's name, seat, purpose and board.
Registered Seat Sitz
A Swiss foundation must have a seat in Switzerland, registered in the canton where it is domiciled. This determines which supervisory authority and cantonal tax office applies. Foreign founders must arrange a Swiss domiciliation address as part of setup.
Domiciliation Domizil
The provision of a registered office address in Switzerland for a foundation. A common service offered by Swiss fiduciaries to foreign founders who have no physical Swiss presence.
Source-of-Funds Check Herkunftsnachweis
The due-diligence requirement by Swiss banks and notaries to verify the lawful origin of the assets being endowed. Foreign founders typically face more detailed checks; delays at the bank-account-opening stage are common.

Supervision and Compliance

Supervisory Authority Stiftungsaufsicht
The state body, federal, cantonal or communal, assigned to ensure the foundation uses its assets for their declared purpose. Which authority applies depends on the foundation's territorial scope. Family and ecclesiastical foundations are exempt from ordinary supervision under ZGB Article 87. See → Swiss foundation supervisory authority requirements
Federal Supervisory Authority for Foundations (ESA) Eidgenössische Stiftungsaufsicht
The federal regulator, attached to the General Secretariat of the Federal Department of Home Affairs (Eidgenössisches Departement des Innern, EDI), that supervises foundations of national or international reach. As of early 2024, the ESA supervised approximately 5,281 foundations. See → Swiss foundation supervisory authority
Annual Report Jahresbericht
The package of documents filed each year by a supervised foundation with its supervisory authority: audited financial statements, an activity report, the board's approval minutes and the audit report. Family foundations are not subject to this filing requirement but must still keep accounts.
Audit Body Revisionsstelle
The licensed external auditor appointed by the foundation board under ZGB Article 83b. Conducts a limited audit (the norm) or an ordinary audit (for larger foundations meeting the Code of Obligations size thresholds). The supervisory authority may waive the audit for foundations with a balance-sheet total below CHF 200,000 for two successive years that do not raise public funds. See → Swiss foundation audit and reporting requirements
Supervisory Complaint Aufsichtsbeschwerde
A formal complaint mechanism available since 1 January 2024 under ZGB Article 84(3), by which a defined group of interested persons (beneficiaries, donors, board members) may ask the supervisory authority to investigate alleged breaches of the charter or the law by the board. See → Swiss foundation law (Art. 80–89c)
Dissolution Auflösung
The formal ending of a foundation's legal existence. Under ZGB Articles 88–89, dissolution requires a legal ground, unattainable or unlawful objects, and is ordered by the supervisory authority (or a court, for family and ecclesiastical foundations). There is no general right to close a foundation "at will". See → How to dissolve a Swiss foundation
Asset Lock Vermögensbindung
A mandatory charter clause for tax-exempt foundations requiring that, on dissolution, remaining assets pass to another tax-exempt entity with a similar purpose. Without this clause, tax exemption cannot be granted or maintained.

Tax

Public Utility Gemeinnützigkeit
The standard a foundation must meet to qualify for tax exemption: it must serve the general public interest with an open, indeterminate circle of beneficiaries, act altruistically, and dedicate its assets exclusively and irrevocably to that purpose. The legal basis is Federal Direct Tax Act (Direkte Bundessteuer, DBG), Article 56 letter g. See → Charitable foundation tax exemption requirements
Tax Exemption Steuerbefreiung
Release from profit and capital tax granted by the cantonal tax authority on application, once a foundation meets the public-utility criteria. The exemption is never automatic. It must be applied for separately from foundation registration, can be revoked, and requires ongoing compliance. See → Swiss charitable foundation tax-exempt setup guide
Cantonal Tax Authority Kantonales Steueramt
The cantonal body that grants and monitors tax-exempt status. Both the cantonal and federal exemption are decided by the seat canton's tax authority under the Tax Harmonisation Act (Steuerharmonisierungsgesetz, StHG), Article 23.
Donor Deduction Spendenabzug
The deduction available to individuals and companies who donate to a tax-exempt Swiss foundation. At federal level, donations to qualifying foundations are deductible up to approximately 20% of net income; cantonal limits vary. Donations to non-exempt foundations do not qualify.
Capital Tax Kapitalsteuer
An annual cantonal tax on a company's or foundation's net assets. Tax-exempt foundations are also exempt from cantonal capital tax. Taxable foundations (including most family foundations) pay capital tax in addition to income tax.

Trusts and Cross-Border Structures

Trust
A fiduciary relationship, not a separate legal entity, in which a settlor transfers assets to a trustee to hold and manage for beneficiaries or a purpose. Switzerland has no domestic trust law (a 2022 draft bill was shelved in 2023). Foreign trusts governed by English, Jersey or another common-law system are recognised in Switzerland under the Hague Convention. See → Swiss trust law: status and alternatives
Hague Convention
The Hague Convention on the Law Applicable to Trusts and on their Recognition, in force in Switzerland since 1 July 2007. It provides conflict-of-laws rules for trusts and requires Switzerland to recognise validly created foreign trusts, but does not create domestic Swiss trust law. The Federal Act on Private International Law (PILA), Articles 149a–149e, and the Debt Enforcement and Bankruptcy Act (SchKG) implement the Convention domestically. See → Hague Convention and trust recognition in Switzerland
Settlor
The person who creates and funds a trust by transferring assets to a trustee. The equivalent role in a Swiss foundation is the founder (Stifter). Unlike a foundation founder, a settlor can sometimes reserve powers over the trust.
Trustee
The person or entity that holds trust assets and manages them for the benefit of the beneficiaries or for the trust's purpose. Switzerland has no "Swiss trustee" licence as such; anyone providing trustee services commercially from Switzerland requires a FINMA licence under the Financial Institutions Act (FinIA), Article 17(2), in force since 1 January 2020.
Liechtenstein Foundation Liechtensteiner Stiftung
A civil-law foundation created under Article 552 of Liechtenstein's Persons and Companies Act (PGR). Its key difference from a Swiss family foundation: Liechtenstein permits a "maintenance foundation" that funds the general living costs of family members, currently prohibited in Switzerland under ZGB Article 335. Minimum capital is CHF/EUR/USD 30,000. See → Swiss foundation vs Liechtenstein foundation
Common Reporting Standard (CRS)
The OECD's Automatic Exchange of Financial Account Information standard. Swiss financial institutions, including banks holding foundation accounts, report account data to the Swiss Federal Tax Administration (ESTV), which exchanges it with the tax authorities of the account holders' countries of residence. Switzerland joined CRS in 2017 (first exchange 2018). Neither Swiss nor Liechtenstein foundations are anonymous.
FATCA
The US Foreign Account Tax Compliance Act, requiring Swiss financial institutions to report accounts held by US persons (citizens and residents) to the IRS under the US–Switzerland Intergovernmental Agreement. Applies where a US person is the founder of, or a beneficiary with a reportable interest in, a Swiss foundation. See → Swiss foundation for US citizens

Other Frequently Used Terms

Asset Protection
The legal consequence of irrevocably dedicating assets to a Swiss foundation: once contributed, those assets are owned by the foundation, not the founder, and are in principle beyond the reach of the founder's personal creditors. The protection is not absolute, transfers made to defeat existing or foreseeable creditors can be challenged under Swiss law. See → Swiss family foundation asset protection
Forced Heirship Pflichtteil
The reserved share of an estate to which a child (and, before the 2023 succession reform, a surviving spouse and parents) is entitled under Swiss inheritance law. A Swiss foundation that receives assets more than five years before the founder's death is generally outside the estate, but transfers within five years that impair reserved shares may be contested. See → Swiss family foundation estate planning
Succession Planning
Structuring wealth so that assets pass efficiently and according to the founder's wishes to the next generation, typically across multiple family members and sometimes across borders. A Swiss foundation provides a long-lived legal vehicle that can carry out succession without triggering probate on each generation's death.
Perpetual Duration
A foundation, unlike a company or trust, has no fixed term: it continues until it is formally dissolved by the supervisory authority. This makes it a suitable vehicle for long-term charitable or generational wealth purposes.
KYC (Know Your Customer)
The due-diligence process by which Swiss banks and fiduciaries verify the identity and source of funds of the founder and beneficial owners before opening accounts or providing services. Foreign founders typically face more extensive KYC checks, including proof of the lawful origin of contributed assets.
Participation Deduction Beteiligungsabzug
A Swiss corporate tax relief on qualifying dividends and capital gains from significant shareholdings (at least 10%). Relevant to foundations that hold equity stakes in operating companies, where the foundation is taxable rather than exempt.
Land Register Grundbuch
The official cantonal register recording ownership of Swiss real estate. Where a foundation owns property, it is entered as owner on the Grundbuch, making the separation from the founder's personal estate visible and legally certain.

Want to know more?

This glossary supports all articles on foundation-switzerland.com. For a full introduction to the topic, start with our complete guide to Swiss foundations. For the legal framework, see Swiss foundation law (ZGB Articles 80–89c). If you are ready to take next steps, contact us, we are happy to answer questions specific to your situation.

General information only, not legal or tax advice. Swiss law is complex; always obtain qualified professional advice before establishing a foundation or making any related financial decisions.

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