Foundation law

Philippe FRESARD, notary and barrister in Berne, and Robert-Pascal FONTANET, notary in Geneva

The Swiss Civil Code dedicates only eighteen articles to Foundation law. A Foundation is a legal entity, created by an authenticated deed and governed by statutes, to which a person donates a sum of money which is used to achieve a particular goal. Such donations can be made while the person is alive or at the time of his or her death, and the sums can sometimes be considerable. With the exception of familiy and ecclesiastical foundations, foundations are subjet to a supervisory authority. These foundations may pursue an economic goal, and can only be abolished through a government decision.

In 2006 and 2008, civil and fiscal modifications came into effect, in particular:

In civil law

Modification of the aim of the foundation
The founder (or founders if there are several of them) can demand partial or total modification of the foundation in the following conditions:
- The foundation deed must formally allow the possibility of subsequently modifying the aim (which excludes the field of application of foundation provisions set out by the old law);
- the founder should present a modification request either in his or her lifetime or contained in a provision at the time of death;- the modification cannot intervene before 10 years have passed since the creation of the foundation or since the last modification of its aim.

The founder's right to modify the aim of the foundation is limited when the initial aim is of public interest (public utility, public service); if this condition is fulfilled, the new aim should also be of public interest.
The change of aim of a family, ecclesiastic or provident foundation is not covered by the new provisions.

Mandatory auditing body
The new foundation law introduces the principle of foundations' obligation to have an auditing body - the auditor being evidently independent of the foundation. Depending on the size of the foundation, it could be an ordinary or limited audit. However, the board of a small foundation can ask the supervisory authority for dispensation from the obligation to assign an auditing body. This dispensation can be revoked at any time.

Family or religious foundations are not subjected to this requirement.

Excess debt / insolvency
Under new law, the foundation board is required to announce excess debt or insolvency which, in any case, would have been reported by the auditing body to the supervisory authority.It is then up to the supervisory authority to order that relevant measures be taken.

Business register
All persons authorised to represent the foundation, with their respective signature mode, but also all members of the foundation's board not authorised to sign as well as the auditing body, should be mentioned on the business register.


The tax-deduction ceiling relating to donations given to tax-exempted public interest foundations is 20% of net income (or profit) in terms of direct federal tax.

For value-added tax (VAT), new criteria are used to distinguish between sponsorship, which is subject to VAT, and donations, which are exempt.

If you have set up a foundation and intend to make certain adjustments or if you plan to create a new one, your notary, a member of the swisNot network, can give you detailed advice and support you in this procedure.

Berne and Geneva, 12.12.2010


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