01
Separate legal personality
Independent legal owner
The foundation itself owns the dedicated assets. It has no shareholders, members or private owner.
Austrian Privatstiftung
Preserve ownership through
an Austrian private foundation.
An Austrian Privatstiftung is an independent legal structure to which assets are permanently or conditionally dedicated for a defined purpose. It can hold companies, investments and other assets while separating long-term ownership from the personal estate of an individual founder.
Structural position
A private foundation is not a company with a permanent founder-controlled bank account.
Once assets are validly dedicated, they belong to the foundation. The foundation board must administer them in accordance with the law, the foundation purpose and the foundation declaration. The structure can preserve a family enterprise or investment portfolio, but it requires real separation between the founder, the governing organs, the assets and the beneficiaries.
02
Purpose-bound assets
Defined long-term purpose
The founder establishes how the assets should be managed and which permitted purpose they should serve.
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Controlled distributions
Beneficiary framework
Family members, the founder or other persons may be designated or determined as beneficiaries under the foundation documents.
04
Board-led administration
Institutional governance
The foundation is managed by statutory organs rather than directly by shareholders or a sole owner.
Foundation use cases
When a private foundation may have a genuine long-term role.
The structure is usually considered where the objective extends beyond one person’s immediate ownership horizon. It should not be established merely because the founder wants privacy or a lower tax rate.
Preserve a company across generations
Shares in a family company can remain under one ownership structure rather than being fragmented through successive inheritances.
Separate continuity from personal estates
The foundation can continue after a founder’s death and administer the dedicated assets under an existing governance framework.
Maintain a long-term investment portfolio
Securities, property and corporate participations can be managed according to a defined investment and distribution policy.
Separate benefits from control
Beneficiaries may receive economic benefits without personally owning or managing every underlying asset.
Continue a defined private objective
The foundation documents can preserve principles concerning ownership, reinvestment, distributions and family participation.
Hold a corporate group above a holding company
The foundation may own the holding company while ordinary commercial operations remain within subsidiaries.
Foundation participants
Founder, board and beneficiary are different legal positions.
Confusing these roles undermines the structure. The documents must state what powers are reserved, who makes decisions and how benefits are determined.
Founder
Establishes the foundation, determines its purpose and dedicates the initial assets. Reserved amendment or revocation rights must be expressly included where legally permitted and intended.
Foundation board
Represents and manages the foundation. It must contain at least three members, with the statutory residence requirements observed.
Foundation auditor
Performs the statutory audit function and reviews the annual financial reporting and administration within the applicable legal framework.
Beneficiaries
Receive benefits where the foundation documents and board decisions establish an entitlement or discretionary distribution. They do not own the foundation’s assets.
Infographic 02
Foundation, holding company or direct ownership?
These structures solve different problems. A holding company organises corporate ownership; a private foundation can place that ownership within a longer-term succession and beneficiary framework.
| Issue | Direct personal ownership | Austrian holding company | Austrian private foundation |
|---|---|---|---|
| Legal owner | Individual founder or family member | Shareholders own the holding company | Foundation owns the dedicated assets and has no shareholders |
| Main purpose | Simple personal ownership | Group ownership, investment and subsidiary governance | Purpose-bound long-term asset ownership and beneficiary support |
| Succession | Assets normally enter the owner’s estate | Holding-company shares enter the owner’s estate | Foundation assets remain owned by the continuing foundation |
| Control | Owner exercises direct control | Shareholders control through company governance | Board manages according to the foundation purpose and documents |
| Beneficiaries | No separate beneficiary system | Shareholders receive dividends or sale proceeds | Beneficiaries may receive foundation distributions without owning the assets |
| Minimum capital or assets | No structural minimum | Depends on the company form; a GmbH generally requires €10,000 share capital | At least €70,000 must be dedicated to the foundation |
| Commercial activity | Individual may operate directly subject to applicable law | Holding can perform corporate and group functions | Cannot conduct commercial activity beyond permitted ancillary activity |
| Governance cost | Usually lowest | Company directors, accounts and filings | Board, auditor, accounting, governance and foundation-specific administration |
| Typical use | One owner and straightforward assets | Several subsidiaries or an investment group | Family enterprise, succession and long-term asset stewardship |
Assets and activities
A foundation can own assets. It should not become the ordinary operating company.
Commercial risk is commonly kept within GmbHs or other operating subsidiaries, while the foundation remains the long-term owner of the group or other dedicated assets.
Shares in holding and operating companies
The foundation may own a holding GmbH or direct participations, subject to governance, tax and regulatory analysis.
Financial and investment assets
Securities, cash, investment funds and other financial assets may form part of the dedicated foundation property.
Property and other valuable assets
Real estate and other assets can be contributed or acquired, subject to transfer taxes, valuation, financing and management considerations.
The Privatstiftung is not intended to run an unrestricted trading or service business.
Its role is generally asset ownership, administration and use for the defined purpose. Ordinary operating activities should normally remain in a separate company whose shares may be held by the foundation.
Tax framework
A private foundation is a tax structure with its own rules—not an automatic tax exemption.
Contributions, ongoing investment income, company participations, property, distributions and dissolution can each produce different Austrian and cross-border tax consequences.
Contributions to the foundation
Gratuitous transfers to a private-law foundation may fall within the Austrian foundation-entry-tax framework. Rates and exceptions depend on the parties, documentation and relevant tax connections.
Ordinary and intermediate taxation
Different categories of income can be subject to ordinary corporate taxation, exemptions or the foundation intermediate-tax regime. From 2026, the intermediate-tax rate for relevant income categories is 27.5%.
Benefits paid to beneficiaries
Foundation distributions are generally connected with Austrian capital-yields withholding tax of 27.5%, subject to the precise payment, beneficiary residence, treaty relief and procedural requirements.
Tax treatment should be modelled before assets are transferred.
Once property has been dedicated, reversing the arrangement can be legally and economically difficult. Entry tax, latent gains, withholding tax, foreign tax residence and future beneficiary distributions should be assessed before execution.
Infographic 03
From founder’s objective to registered foundation.
Formation is only one part of the project. The asset transfer, governance, tax review and long-term administration must be designed together.
Purpose and asset review
Define the family, succession, ownership or investment objective and identify the assets proposed for dedication.
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Governance and beneficiary design
Determine the board, auditor, optional advisory bodies, beneficiaries, reserved founder rights and distribution logic.
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Notarial foundation declaration
Execute the Stiftungserklärung and any supplementary foundation document in the legally required notarial form.
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Registration and asset implementation
Register the foundation in the Firmenbuch, complete ownership and WiEReG reporting and implement the planned asset transfers.
Foundation documents
The legal architecture is contained in the foundation declaration.
Some provisions form part of the public register filing, while confidential or detailed arrangements may be included in a supplementary foundation document where permitted.
01
Foundation purpose
The permitted objective for which assets are dedicated, administered and used.
02
Dedicated foundation assets
Initial property of at least €70,000, contributed in cash or eligible non-cash assets.
03
Foundation board
Initial members, appointment rules, terms, representation, replacement and removal mechanisms.
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Foundation auditor
Appointment and statutory audit framework for the foundation.
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Beneficiary provisions
Named beneficiaries, beneficiary categories, determination rights and distribution principles.
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Founder’s reserved rights
Amendment, revocation, appointment and other rights only where expressly reserved and legally effective.
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Additional governance bodies
Advisory board, supervisory board or beneficiary assembly where appropriate and legally compatible with board autonomy.
08
Termination and ultimate beneficiaries
Duration, dissolution events and allocation of remaining assets following liquidation.
Ongoing governance
The foundation board must remain a governing organ—not a nominee for the founder.
Founder influence can be structured through legally permitted reserved rights and advisory mechanisms, but the foundation board cannot be reduced to a body that merely follows unrestricted private instructions.
Purpose compliance
Investments, ownership decisions and distributions must remain consistent with the foundation purpose.
Independent administration
Board members must exercise their statutory function and document material decisions.
Distribution decisions
Payments should follow the beneficiary framework, liquidity, foundation purpose and applicable tax treatment.
Subsidiary supervision
The foundation should define how shareholder rights in holding and operating companies are exercised.
Annual financial reporting
Financial statements and required supporting reports must be prepared, reviewed and filed within the applicable framework.
WiEReG maintenance
Founders, board members, beneficiaries and other reportable persons must be identified and reviewed under the beneficial-owner rules.
Asset policy
Concentration, liquidity, financing and major acquisitions should follow an agreed decision process.
Amendment and succession
Changes to purpose, beneficiaries or governance depend on the original reserved rights and applicable statutory limits.
Official framework
- RIS — Austrian Private Foundations Act ↗
- Austrian Economic Chamber — Privatstiftung ↗
- Austrian Economic Chamber — Formation checklist ↗
- Austrian Economic Chamber — Taxation of private foundations ↗
- Austrian Ministry of Finance — Beneficial Owners Register ↗
- Austrian Ministry of Finance — Withholding-tax treaty relief ↗
- Austrian Business Service Portal — Annual financial statements ↗
- JustizOnline — Austrian Companies Register ↗
Start a private-foundation brief
Tell us which assets should continue beyond the founder’s personal ownership.
Include the proposed founders, family structure, beneficiaries, company participations, financial assets, property, countries, succession objectives, intended board composition and expected distribution policy. We will identify the legal, tax, governance and implementation questions requiring Austrian and cross-border coordination.