What is the reasonable minimum amount to set up a foundation? What are the advantages of it? What should be taken into account when establishing a foundation? You can find a general taxation-overview on this page.
More than 22,000 foundations with legal capacity exist in Germany and over two-thirds have a foundation capital of less than EUR 1 million. To incorporate a foundation, there is no specific minimum amount required that has to be allocated to it. However, the lasting and sustainable fulfillment of the foundation's mission has to be ensured according to sec. 80 para. 2 German Civil Code. An exception is the foundation with legal capacity. The basis and subsequent external donations are not subject to income tax. However, they may become subject to inheritance and gift tax.
*Legal advice from qualified lawyers
The most common form of the foundation is the charitable one. If a foundation pursues a charitable purpose, it is granted the status ‘charitable’ and related tax benefits after it has been audited by the foundation authority and tax office. Charitable foundations can promote, for example, cultural institutions or cancer aid, or they can act on their own behalf.
Private benefit foundations, such as family foundations, do not benefit from a tax exemption. Their mission is solely to secure wealth and provision for the family and thus does not serve the corporate good.
The contributions to the family to secure their provision do not reduce the income of the foundation and are therefore not tax-privileged. They are considered as distributions from corporations. You nonetheless can take advantage of tax benefits. Please click here for further information.
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