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Swiss Foundation Wealth Management: Banking, Investments & Strategy

A Swiss foundation manages wealth by holding assets it owns as an autonomous legal entity and investing them under a strategy set by its board. Under the Swiss Civil Code (ZGB), Article 80, those assets are irrevocably dedicated to the foundation’s purpose. Wealth management inside a foundation is therefore a question of governance and fiduciary duty, not personal preference.

This guide explains how a Swiss foundation holds, banks and invests its assets: the board’s investment duties under Swiss law and the Swiss Foundation Code 2021, how an investment strategy is set, how banking and custody work in Switzerland, and how assets are taxed and reported. It is written for founders, family offices and advisers weighing a Swiss structure.

Key takeaways

• A Swiss foundation owns and banks its assets in its own name, separate from the founder.
• The foundation board (Stiftungsrat) sets and oversees the investment strategy under ZGB Article 83.
• The Swiss Foundation Code 2021 asks for an investment strategy aligned to the foundation’s purpose and risk-carrying capacity.
• Bank deposits are protected up to CHF 100,000 per depositor and bank; custody securities are segregated and bankruptcy-remote.
• Charitable foundations may be tax-exempt; family foundations are generally taxed.
• This is general governance information, not investment or legal advice.

How a Swiss foundation holds its assets

A Swiss foundation (Stiftung) is an autonomous legal entity created by dedicating assets to a particular purpose. Under Swiss Civil Code, Article 80, that dedication is the defining act: the assets leave the founder’s estate and become the foundation’s own. A foundation has no shareholders and no owners, only beneficiaries, and the founder cannot simply reclaim the assets later.

In practice this means the foundation holds and manages wealth in its own name. It is the account holder, the registered owner of securities and, where relevant, the owner on the land register. A foundation can hold a broad range of assets, including:

• Cash and bank deposits
• Securities (equities, bonds, funds)
• Real estate
• Shares in private companies
• Intellectual property

How those assets are held and invested is governed by the foundation’s purpose and by Swiss foundation law, not by what any single individual wants in a given year. This separation is the source of the foundation’s strength as a wealth-holding vehicle: because the assets belong to the foundation, they are insulated from the founder’s personal circumstances and outlive any single generation of board members. It is also the source of its discipline, because the same separation removes the day-to-day discretion an individual would have over their own portfolio.

For the wider picture of what a foundation is and how it is established, see our complete guide to Swiss foundations. For property specifically, see our guide to holding real estate through a Swiss foundation.

The board’s investment duties and the Swiss Foundation Code

The foundation board, or Stiftungsrat, is the supreme governing body. Under Swiss Civil Code, Article 83, the foundation’s governing bodies and the manner in which it is administered are determined by the foundation deed. The board is responsible for administering the foundation’s assets so that they serve the stated purpose over the long term.

That responsibility is not left unsupervised. Under Swiss Civil Code, Article 84, foundations are supervised by the state authority to which they are assigned, and the supervisory authority must ensure that the foundation’s assets are used for their declared purpose.

Swiss Civil Code, Article 84: Foundations are supervised by the state authority (Confederation, canton or commune) to which they are assigned, which must ensure that the foundation’s assets are used for their declared purpose.

Beyond the statute, the Swiss Foundation Code 2021, published by SwissFoundations and made up of four principles and 28 recommendations, sets the recognised good-governance benchmark for charitable foundations. On managing assets, its Recommendation 22 is the anchor: the foundation’s assets should be invested pursuant to an investment strategy consistent with the foundation’s purpose and its risk-carrying capacity, independent of the personal preferences of individual board members. Investment decisions are taken in the foundation’s interest, and the Code stresses an internal governance system that protects against conflicts of interest and misconduct.

For more on the board’s broader obligations, see our guide to Swiss foundation board duties and governance, and for the statutory framework, our explainer on Swiss foundation law under Civil Code Articles 80–89.

Reviewing performance and strategy

Good investment governance is continuous, not one-off. The Swiss Foundation Code recommends that the board review the investment strategy every two to three years and review investment results twice a year. It also asks foundations to coordinate their investment policy with their spending or grant-making policy, so that the way assets are invested supports, rather than works against, the foundation’s purpose.

Setting a foundation investment strategy

A foundation investment strategy translates the foundation’s purpose into a disciplined approach to its assets. It is a governance document, not a forecast, and the steps below describe how Swiss foundations typically build one with professional advice.

1. Define purpose-driven objectives. Start from the foundation deed. A perpetual charitable foundation that funds annual grants has different needs from a family foundation preserving capital across generations.
2. Assess risk-carrying capacity. Establish how much volatility and drawdown the foundation can absorb without endangering its purpose. The Foundation Code makes this assessment the basis of the strategy.
3. Set an asset allocation. Decide the long-term split across asset classes in line with that risk capacity and the foundation’s time horizon, which for many foundations is indefinite.
4. Document the investment policy. Record objectives, constraints, allocation ranges and reporting cadence so the board can be held to them.
5. Delegate management where appropriate. The board may mandate a regulated bank or independent portfolio manager to implement the strategy, while retaining oversight and accountability. An independent portfolio manager that manages the foundation’s assets on a discretionary mandate is licensed and supervised under the Financial Institutions Act (FinIA), Article 17, the single-client regime, distinct from the separate “portfolio manager for collective assets” licence (FinIA Article 24) that applies only to collective investment schemes and pension funds.
6. Monitor and review. Measure results against the policy and revisit the strategy on the cadence above.

We do not promise returns, and neither should any adviser. A foundation’s appropriate strategy depends on its purpose, time horizon and risk capacity, and the balance between capital preservation and growth is a board decision taken on the facts.

Banking and custody in Switzerland

Because a Swiss foundation is a legal entity, it opens bank and custody accounts in its own name. Foundation banking in Switzerland is, in that sense, ordinary corporate banking: the foundation is the client, and the founder and board members act for it rather than holding the assets personally.

Switzerland’s framework for protecting those assets rests on two distinct mechanisms:

The distinction matters for a foundation that holds substantial securities: those holdings remain the foundation’s property and are not exposed to the bank’s own creditors. Switzerland strengthened the rules with effect from 1 January 2023, requiring custody assets to be segregated at the sub-custodian level for the Swiss leg of the custody chain. Deposit protection, by contrast, is capped at CHF 100,000 per depositor and bank, which is one reason boards rarely hold large balances purely as cash.

The foundation is simply the bank’s client. It is not itself a FINMA-regulated entity for holding and investing its own assets, the regulated, supervised parties are the bank (a licensed deposit-taker under the Banking Act) and any portfolio manager the board mandates (licensed and supervised under the Financial Institutions Act). When opening a foundation account, a Swiss bank applies the same onboarding and anti-money-laundering due-diligence checks it applies to any corporate client, obligations imposed by the Federal Act on Combating Money Laundering and Terrorist Financing (AMLA / GwG). As part of that KYC duty it will typically review the foundation deed, the register extract, the identity of the board members and authorised signatories, and the source of the dedicated assets. Setting up banking is therefore part of establishing the foundation rather than an afterthought, and it pays to plan the banking relationship alongside the structure itself. Our guide to Swiss foundation costs and capital requirements sets out what to budget for at this stage.

Risk, diversification and governance controls

Diversification and a sober view of risk are governance expectations, not tips. The Swiss Foundation Code frames investment around the foundation’s risk-carrying capacity, which in practice points boards towards diversified portfolios rather than concentrated positions, a standard often described as the prudent investor principle, sized to what the foundation can bear.

The controls that support this are organisational:

• A written investment policy that the board approves and monitors.
• Clear separation between setting strategy (the board’s role) and implementing it (often a regulated manager mandated under FinIA Article 17).
• Conflict-of-interest rules, so investment decisions serve the foundation rather than any board member’s private interest.
• Regular reporting back to the board and, ultimately, to the supervisory authority.

Where the foundation’s purpose is asset protection across a family, the structure itself does part of the work, because the assets are owned by the foundation rather than by individuals. See our guide to Swiss family foundation asset protection for how that operates.

Tax and reporting on foundation assets

How a foundation’s assets and investment income are taxed depends on the type of foundation. Charitable, public-utility foundations can apply for tax exemption, but only where the beneficiary circle is open and no private benefit flows to particular individuals. Family foundations are generally not tax-exempt and are taxed in the ordinary way. Exemption is reviewed by both the cantonal tax authority and, where relevant, the Federal Tax Administration (ESTV); it is never automatic.

On reporting, the duties are concrete. Under Swiss Civil Code, Article 83a, the foundation keeps proper business records in line with the Code of Obligations; under Article 83b, it appoints an auditor, although the supervisory authority may exempt smaller foundations. The foundation’s assets and investment results appear in its annual financial statements, which are reviewed by the auditor and overseen by the supervisory authority.

For the detail, see our guides to Swiss foundation tax benefits and exemptions and Swiss foundation audit and reporting requirements.

If you are considering how a Swiss foundation would hold and invest your assets, our Zug-based team can talk you through the governance, banking and tax questions specific to your case. Book a consultation.

Frequently asked questions

Can a Swiss foundation hold investments and a bank account? Yes. A Swiss foundation is an autonomous legal entity under Swiss Civil Code, Article 80, and holds bank accounts, securities and other assets in its own name, separate from the founder.

Who decides how a Swiss foundation’s assets are invested? The foundation board (Stiftungsrat) decides, under Swiss Civil Code, Article 83. The Swiss Foundation Code 2021 asks the board to invest according to an investment strategy aligned with the foundation’s purpose and risk-carrying capacity, not individual board members’ preferences.

Are a Swiss foundation’s assets protected if its bank fails? Bank deposits are protected up to CHF 100,000 per depositor and bank under the esisuisse scheme. Custody securities are segregated from the bank’s own assets and are bankruptcy-remote, so they fall outside the bank’s bankruptcy estate.

Does a Swiss foundation pay tax on investment income? It depends. Charitable, public-utility foundations may qualify for tax exemption, subject to cantonal and federal review. Family foundations are generally not tax-exempt and are taxed in the ordinary way.

How often should a foundation review its investment strategy? The Swiss Foundation Code recommends reviewing the investment strategy every two to three years and reviewing investment results twice a year.

What law governs the foundation board’s investment duties in Switzerland? The foundation board’s core duty to administer the foundation’s assets for its declared purpose flows from Swiss Civil Code, Article 83 (governing bodies and administration) and Article 84 (state supervision and purpose-conformity). The Swiss Foundation Code 2021, Recommendation 22, gives practical content to those duties by requiring an investment strategy that is consistent with the foundation’s purpose and its risk-carrying capacity, independent of the personal preferences of individual board members.

Does a Swiss foundation need a licensed portfolio manager to invest its assets? The foundation itself is not required to be FINMA-regulated for managing its own assets. However, if the board mandates an external manager to run a discretionary portfolio on the foundation’s behalf, that manager must hold a portfolio manager licence under the Financial Institutions Act (FinIA), Article 17, the single-client regime for discretionary mandates. A separate licence category under FinIA Article 24 applies only to managers of collective investment schemes and pension funds and is not the relevant licence for a foundation’s private portfolio.

What is the esisuisse deposit protection limit, and how does it apply to a foundation? The esisuisse deposit-insurance scheme protects bank deposits up to CHF 100,000 per depositor and per bank. A Swiss foundation counts as a single depositor, so if it holds cash at one bank, up to CHF 100,000 is covered in the event of that bank’s insolvency and the remainder ranks as an unsecured claim. This is one reason boards with substantial liquidity typically hold it across multiple banks or convert excess cash into custody securities, which are protected differently.

Are a foundation’s securities at a Swiss bank protected in the same way as its cash? No, the protection mechanism is different and generally stronger for securities. Custody assets (equities, bonds, funds held in a securities account) are legally segregated from the bank’s own assets under the Federal Act on Intermediated Securities and the Banking Act. If the bank fails they fall outside the bank’s bankruptcy estate and are returned to the foundation; they are not subject to the CHF 100,000 cap that applies to cash deposits. Since 1 January 2023, Swiss law also requires segregation at the sub-custodian level for the Swiss leg of the custody chain.

What anti-money-laundering checks does a Swiss bank apply when a foundation opens an account? When a foundation opens a bank or custody account, the bank applies standard corporate Know Your Customer due diligence under the Federal Act on Combating Money Laundering and Terrorist Financing (AMLA / GwG). In practice this means reviewing the foundation deed and commercial register extract, identifying and verifying the board members and authorised signatories, establishing who the beneficial owner and controller are, and satisfying itself as to the source of the assets being dedicated to the foundation. Banking documentation is therefore part of the foundation-establishment process, not an afterthought.

Can a Swiss foundation invest in real estate or private company shares? Yes. A Swiss foundation can hold a broad range of assets in its own name, including real estate, shares in private companies, equities, bonds, funds and intellectual property. The board’s duty is to ensure the investment strategy is consistent with the foundation’s purpose and risk-carrying capacity; a large or illiquid holding that endangers the foundation’s ability to pursue its purpose would conflict with that duty. For foundations holding property specifically, our guide to holding real estate through a Swiss foundation sets out the governance and registration requirements.

Is a charitable Swiss foundation exempt from tax on rental income or dividends from its investments? A charitable, public-utility foundation that has obtained tax exemption under Article 56, letter g of the Federal Act on Direct Federal Taxation is generally exempt from cantonal and federal taxes on profit and capital, which includes investment income such as dividends, interest and rental income from assets held for its purpose. The exemption is not automatic, it requires a formal grant by the cantonal tax authority, and certain taxes such as VAT can still apply depending on the activities. Family foundations are generally not tax-exempt and are taxed on their investment income in the ordinary way.

Can a foundation board delegate day-to-day investment management, and does it remain accountable? The board may mandate a regulated bank or licensed portfolio manager to implement the investment strategy on a discretionary basis, and this is common practice for foundations with sizeable portfolios. Delegation does not transfer accountability: the board retains ultimate responsibility for setting and monitoring the strategy, selecting and reviewing the mandated manager, and ensuring that investment decisions continue to serve the foundation’s purpose. The Swiss Foundation Code calls for clear separation between setting strategy (the board’s role) and executing it (the manager’s role), supported by regular reporting back to the board.

This article is general information on Swiss foundation governance and is not investment advice or a substitute for formal legal advice. Tax and regulatory outcomes depend on your specific circumstances.

Author: Hansruedi Mueller, Swiss foundation lawyer, /author/hansruedi-mueller/. Published 4 June 2026.

Sources

• Swiss Civil Code (ZGB), Article 80, dedication of assets to a purpose; foundation as autonomous legal entity. onlinekommentar.ch; ICNL, The Swiss Legal Framework on Foundations.
• Swiss Civil Code (ZGB), Articles 83, 83a, 83b, 83d, governing bodies and administration; bookkeeping; auditor; supervisory measures. Fedlex / WIPO Lex.
• Swiss Civil Code (ZGB), Article 84, state supervision; assets used for declared purpose. onlinekommentar.ch.
• Swiss Foundation Code 2021, SwissFoundations, four principles and 28 recommendations; Recommendation 22 on investment strategy aligned to purpose and risk capacity; review cadence. swissfoundations.ch; VELUX Stiftung summary.
• esisuisse, deposit insurance up to CHF 100,000 per depositor and bank; privileged deposits; 2023 changes. esisuisse.ch.
• FINMA, depositor protection. finma.ch.
• Pestalozzi / MLL Legal, Swiss custody business; segregation and bankruptcy remoteness of securities; sub-custodian-level segregation of the Swiss custody chain from 1 January 2023.
• Financial Institutions Act (FinIA), Article 17, portfolio manager (discretionary single-client mandate); Article 24, portfolio manager for collective assets (collective investment schemes / pension funds). Banking Act, Article 1a, banking-licence trigger for deposit-takers. Homburger, Financial Services Regulation 2025, Switzerland.
• RSM Switzerland; Bucher Tax, tax exemption for charitable foundations; family foundations generally taxed; cantonal and federal (ESTV) review.