How exactly do you set up a foundation?
A foundation can be established by an individual or a legal entity. The minimum capital for a foundation is 30,000 Swiss francs, euros or US dollars. This minimum capital can also be used for the purpose of the foundation.
A foundation is established by a certified declaration of incorporation. There is no need for the donor to appear in person, as the foundation can be set up by an indirect representative, a Liechtenstein trustee. The trustee acts on the basis of a power of attorney issued by the donor, and the legal effects of such a foundation are therefore on the donor.
The required document is the mandatory foundation deed. It must contain the following information
- Name and registered office of the foundatio
- Dedication of a specific asset
- Purpose of the foundation
- Rules governing the appointment, removal, term of office, governance and powers of representation of the foundation board
- Use of assets in the event of dissolution of the foundation
- Surname, first name and domicile or company name and registered office of the donor or, in the case of indirect representation, of the representative.
The beneficiaries do not have to be named or specifically defined in the foundation deed or in the supplementary deed of the foundation. It is sufficient to designate a class of beneficiaries, such as a particular family or persons close to the family members concerned. It is possible to regulate the beneficiaries in a supplementary document called the by-laws (Beistatuten).
Charitable foundations must be registered in the Commercial Register. Others, known as deposited foundations, only have to file a declaration of establishment. When a foundation is established, the donor separates himself from the donated assets and the foundation, as a legal entity, becomes the owner of the assets. From the time of its establishment, the foundation board is the supreme governing body of the foundation. The foundation board manages the business of the foundation, represents it externally and is responsible for ensuring that the foundation’s purpose is fulfilled. The foundation board also distributes funds to the beneficiaries of the foundation in accordance with the donor’s instructions as set out in the foundation’s governing documents.