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Formation and foundation deed

Setting up with a clear architecture: foundation deed, supplementary deed, governing bodies and asset endowment drafted so the foundation delivers what the founder intended.

A private foundation is an ownerless legal entity. The founder endows assets that from then on belong to the foundation itself and serve the purpose set out in the foundation declaration. It comes into being on registration in the commercial register. We draft foundation declarations that still carry weight decades later.

Almost everything that will later be possible or impossible in a private foundation is decided at formation: founder rights, the group of beneficiaries, the governing bodies and the distribution of assets at the end. Mistakes at this stage can often no longer be corrected later.

The building blocks of formation

The foundation declaration is made as a notarial deed and consists of the foundation deed and often a supplementary deed. The foundation deed is filed with the commercial register and is thus publicly accessible; the supplementary deed remains confidential and typically contains the sensitive rules, such as the group of beneficiaries.

The Private Foundation Act requires dedicated minimum assets of 70,000 euros. Besides money, real estate, shareholdings or securities can also be endowed.

  • Foundation deed: public part with purpose, seat, bodies and duration
  • Supplementary deed: confidential part, often with the beneficiary rules
  • Notarial deed and commercial register entry as conditions for coming into existence
  • Minimum assets of 70,000 euros; non-cash assets can also be dedicated

What must be in the foundation declaration

Mandatory content includes the endowment of assets, the foundation purpose, the naming of beneficiaries or of a body which determines them, and the name and seat of the foundation. Equally important are the optional contents: the reservation of amendment and revocation, the design of the board, an advisory board and rules for conflicts.

Anyone who forgets the reservation of amendment or revocation largely hands over control of the endowed assets. Conversely, a construction that is too founder-heavy can jeopardise the recognition of the foundation structure. This balance is at the core of good drafting.

Keeping tax and reporting duties in view

The endowment of assets in principle triggers foundation entry tax; separate rules apply to real estate. Ongoing taxation and distributions to beneficiaries follow their own tax regimes. We coordinate the legal design with your tax adviser but do not replace them.

On top of that there are reporting duties, in particular the beneficial ownership register under the WiEReG Act, which must be set up cleanly from the outset.

This overview reflects the Austrian legal position under the Private Foundation Act (PSG) and does not replace advice in the individual case. The specific circumstances of your foundation are always decisive.

Frequently asked questions

What clients often ask.

How long does forming a private foundation take? +
From the first concept meeting to registration in the commercial register usually takes a few weeks to a few months, depending on the complexity of the assets and the coordination with the tax adviser and the notary. The substantive design should not be under time pressure.
What is the difference between the foundation deed and the supplementary deed? +
The foundation deed is filed with the commercial register and is public. The supplementary deed is not filed and remains confidential. That is why sensitive rules such as the group of beneficiaries or details of asset management are typically placed in the supplementary deed.
Can I as founder also be a beneficiary? +
Yes, the founder can also appoint themselves as beneficiary. However, they cannot be a member of the foundation board while being a beneficiary, because the law excludes beneficiaries and their close relatives from the board.
Does a private foundation pay off for my assets at all? +
That depends on the size and structure of your assets, the goals across generations and the running costs. As a rough guide: below assets in the low millions the structure rarely pays off. We tell you openly if a different structure suits you better.
Related topics

This may also be relevant to you.

Founder rights, amendment and revocation

Reserved founder rights secure influence: amending the foundation declaration, revoking the foundation and the limits where several founders are involved or rights have lapsed.

Beneficiaries and information rights

Beneficiaries have rights: information about the foundation, inspection of the foundation declaration and remedies when the board blocks or distributions stop.

Foundation board and liability

Appointment, removal, remuneration and liability of the foundation board: duties of care, conflicts of interest and responsibility towards the foundation.

Conflict in the foundation, a blocked board, information denied?

In foundation law, structure, deadlines and evidence decide. Call us directly or write to us, callback within one business day.

+43 662 6280000 kanzlei@brandauer-rechtsanwaelte.at Book an initial consultation (72 euros)

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BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg