Austrian private foundation (Privatstiftung)

Updated 7 October 2026

A family foundation in an EU country with a state register. We select an independent board, prepare the foundation declaration with a notary and work out the 2026 taxes.

An Austrian private foundation (Privatstiftung) is a legal person established under the Austrian Private Foundations Act 1993. The founder transfers assets to it for the purposes set out in the foundation declaration: supporting a family, managing an estate, holding stakes in family companies. It is a foundation in an EU country with a state register, chosen by those who want their assets in the European legal framework rather than offshore.

Below: how much the foundation must be endowed with, who may sit on the board, how a foundation is created, what taxes apply from 2026 and why foundations are refused.

Assets and creation

The founder must endow the foundation with assets worth at least $79,000 at the European Central Bank rate of 6 October 2026. The foundation is created by a foundation declaration executed by a notary. It becomes a legal person only on entry in the Austrian commercial register, and the first board files the application.

Beneficiaries are named in the foundation declaration. If they are not, they are determined by a body appointed by the founder or, failing that, by the board.

Who runs the foundation

• Board. At least three members, two of whom must be ordinarily resident in an EU or EEA country.
• Who may not sit on the board. A beneficiary, their spouse or partner, relatives in the direct line or up to the third degree of the collateral line, and any legal entity. The same ban applies to people representing beneficiaries' interests.
• Founder. The founder can reserve rights in the declaration, such as amending it or appointing beneficiaries. But the family cannot run the foundation directly through the board, which is why independent board members are needed.

This is the key difference from offshore foundations: by law the board of an Austrian foundation is independent of the beneficiaries, so its members are chosen with particular care.

Taxes from 2026

The Budget Accompanying Act 2025 raised taxes on private foundations:

The interim tax is reduced when the foundation makes distributions to beneficiaries, so the overall burden depends on how income is distributed. The government estimated the increase affects about 2,800 foundations. Taxes for beneficiaries living in other countries are assessed separately under their countries' rules and double tax treaties.

How a foundation is created

1. Reviewing the goal. We define the purpose, the beneficiaries, the founder's rights and the family's taxes in its countries of residence.
2. Board. We select three independent board members, two of them resident in the EU or EEA.
3. Foundation declaration. We set out the purpose, distribution rules and founder's rights; a notary executes the declaration.
4. Assets and registration. We transfer at least $79,000 in assets, and the board files with the commercial register.
5. Accounts and reporting. We open accounts and set up the foundation's bookkeeping and tax reporting.

Documents for setting up a foundation

• passports and proof of address of the founder and the beneficiaries;
• documents on the origin of the funds and assets to be transferred to the foundation;
• the foundation declaration as a notarial deed: the assets, the purpose, the beneficiaries or the body that will appoint them, the name, the seat and the period for which the foundation is created;
• a supplementary deed if the family does not want to disclose distribution details: it is not filed with the commercial register;
• consents of the first board members and their specimen signatures;
• the bank's confirmation that the foundation's money has been paid in, and, where assets in kind are contributed, a formation audit report.

The foundation's auditor is appointed by the court and reviews the accounts and the board's work every year. The founder, the beneficiaries and the board members are entered in the register of beneficial owners.

Timeline step by step

Why foundations are refused

• beneficiaries, their relatives or companies are proposed for the board, which the law prohibits;
• fewer than two board members live in the EU or EEA;
• the endowment is below $79,000;
• the bank will not accept the foundation without a verified source of the founder's funds.

Austrian or Liechtenstein foundation

An Austrian foundation needs more assets and an independent board, and from 2026 pays higher taxes. A Liechtenstein private foundation is set up with capital from $37,000 and a two-member council, and with the favourable status pays only the minimum tax. The Austrian foundation, however, sits inside the EU, which matters to some families and banks.

Who an Austrian foundation suits and who it does not

An Austrian private foundation is chosen by families with a business or property in Austria and Germany, and by those who value an EU jurisdiction with a detailed private foundations law. A foundation helps keep a family company from being split between heirs and sets distribution rules for decades ahead.

A foundation does not suit modest wealth: the minimum assets are $79,000, and a three-member board and an audit cost money every year. Nor does it give anonymity: the foundation and its beneficiaries are entered in Austrian registers available to the authorities.

Restrictions for specific nationalities

Austrian law does not limit the nationality of founders and beneficiaries, but Austria applies the EU sanctions against Russia and Belarus. Where a founder or beneficiary is a national or resident of those countries, participation in a new foundation is checked against the sanctions rules before the founding document is drafted: the citizenship and residence permit of each founder and beneficiary matter. Persons on sanctions lists cannot take part. If this concerns your family, ask an expert.

Taxes in the founder's and beneficiaries' countries

If the founder keeps the right to influence distributions or to change beneficiaries, tax authorities in countries with controlled foreign company rules may treat them as controlling the foundation and tax its profit in their hands. Distributions from the foundation are taxed in the recipient's country of tax residence, subject to its double tax treaty with Austria. We prepare notifications and reporting on the controlled foreign companies page.

Which assets go into the foundation

An Austrian foundation most often receives shares in family companies, property in Austria and financial assets. The transfer is subject to Austrian tax on transfers of assets to a foundation, so its cost is calculated before the documents are signed, and for property the acquisition and registration taxes are considered separately.

What it costs and how long it takes

The founding document is executed by a notary, and the foundation comes into existence on entry in the commercial register. Preparation usually takes several weeks: the board, distribution rules and the check of the origin of the assets have to be agreed.

What we do

We review the goal and the family's taxes, select an independent board, prepare the foundation declaration with a notary, handle registration, open accounts and set up reporting. The cost depends on the assets and the declaration; a manager will calculate it in the chat.

What we do

• Foundation setup and maintenance

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