Associations and foundations are the two main legal forms for non-profit organisations (NPOs) in Switzerland. Governed respectively by art. 60 to 79 and 80 to 89a of the Civil Code (CC), they offer structures adapted to philanthropic, cultural, scientific, sports and social activities. PBM Avocats assists founders, foundation council members and association directors in Geneva and Lausanne in the creation, governance and compliance of their organisations.
The Association: An Organisation of Persons
An association is formed by the union of natural or legal persons around a common non-profit purpose (art. 60 para. 1 CC). The essential criterion is that the purpose must not be primarily economic, which distinguishes an association from commercial companies. Associations may however carry out ancillary commercial activities in service of their main purpose (for example: sale of publications, organisation of paid events).
- Formation: by adoption of written statutes (art. 60 para. 1 CC); no notarial deed required
- Members: minimum defined by the statutes; admission and exclusion conditions are freely determined
- Mandatory bodies: general meeting (supreme body) and management committee
- Liability: the association is liable for its debts with its assets; members are not personally liable (unless the statutes provide otherwise)
- Dissolution: by decision of the general meeting or upon achievement of purpose
Association Statutes: Mandatory Content
The association's statutes must contain the following elements according to art. 60 para. 1 CC:
| Element | Description | Nature |
|---|---|---|
| Name of the association | Freely chosen name | Mandatory |
| Registered office | Municipality in Switzerland | Mandatory |
| Purpose of the association | Precise description of objectives pursued | Mandatory |
| Financial resources | Membership fees, donations, activity revenue | Recommended |
| Organisation | Structure of bodies, powers, quorums | Recommended |
| Dissolution / liquidation | Conditions and allocation of residual assets | Strongly recommended |
The Foundation: A Durable Allocation of Assets
A foundation is assets allocated to a specific purpose (art. 80 CC). It may be established by act inter vivos (notarial deed required, art. 81 para. 1 CC) or by will (art. 81 para. 2 CC). The foundation has no members; it is administered by a foundation council whose members act in a fiduciary capacity in service of the foundation's purpose. Once created, the foundation is in principle irrevocable and its purpose may only be modified with the agreement of the supervisory authority, only if objective circumstances have changed (art. 86 CC).
- Founding act: notarial deed (inter vivos) or will (mortis causa)
- Commercial register entry: mandatory; the foundation acquires legal personality upon registration
- Supervision: by the cantonal or federal foundation supervisory authority
- Auditors: mandatory if assets exceed CHF 200,000 (art. 83b CC)
- Annual report: accounts and activity report submitted to the supervisory authority
Special Types of Foundations
Swiss law recognises several specific types of foundations:
- Family foundation (art. 335 CC): allocates assets to pay for education, establishment or maintenance costs of family members; excluded from cantonal supervision
- Ecclesiastical foundation: subject to canon law and partially exempt from CC rules
- Pension foundation (BVG/LPP): occupational pension institution subject to the FLPP and supervised by FINMA or cantonal authorities
- Umbrella foundation: structure that shelters distinct dedicated funds on behalf of third-party donors
Taxation of Associations and Foundations
Associations and foundations pursuing a public benefit purpose may benefit from tax exemption from profit and capital tax, granted by the cantonal tax authorities (and at federal level for the FDT). This exemption is conditional on the purpose being exclusively and irrevocably of public benefit, funds being used in accordance with the purpose, and no private economic benefit being granted to founders or related persons. Donations made to an exempt association or foundation are generally deductible in the donor's tax return (art. 33a FDTA). Coordination with our tax law team is recommended to optimise these aspects.
Frequently Asked Questions About Associations and Foundations in Switzerland
Must a Swiss association necessarily register with the commercial register?
No. Art. 60 para. 1 CC allows any association to acquire legal personality by adopting written statutes without requiring registration with the commercial register. Registration is however mandatory for associations that carry on a commercial activity and optional for others. Associations wishing to benefit from cantonal tax exemptions must often have a commercial register entry to justify their status. Commercial register registration is also recommended for associations wishing to open a bank account or sign important contracts.
What is the fundamental difference between an association and a foundation?
An association (art. 60 et seq. CC) is formed by a group of persons who unite for a common purpose. It is controlled by its members assembled in a general meeting. A foundation (art. 80 et seq. CC) is, by contrast, an allocation of assets to a specific purpose. It has no members: it is administered by a foundation council and subject to the supervision of the competent cantonal or federal authority. The foundation is irrevocable once established, which requires in-depth reflection before its creation. An association may be dissolved by decision of its members.
How does a foundation obtain tax exemption in Switzerland?
Tax exemption of a foundation (and an association) is granted by the cantonal tax authorities (and federal for the federal direct tax) when the foundation exclusively pursues a purpose of public benefit and its activity is effectively in accordance with that purpose. The criteria are: non-profit nature of the activity, absence of distribution of profits to private persons, and full allocation of assets to the public benefit purpose upon dissolution. The application for exemption must be filed with the cantonal tax authorities together with the statutes and accounts.
Who supervises foundations in Switzerland?
Foundations are subject to the supervision of the competent authority according to their geographical scope of activity. Local or cantonal foundations are supervised by the cantonal foundation supervisory authority (in Geneva: Department of Social Cohesion and Solidarity; in Vaud: Office of Cultural Affairs). Foundations active in several cantons or abroad are supervised by the Federal Foundation Supervisory Authority (FFSA), attached to the Federal Department of Home Affairs. The supervisory authority verifies that the foundation respects its purpose, keeps proper accounts and that its bodies act correctly.
What is the minimum amount required to establish a foundation in Switzerland?
Swiss law does not set a minimum legal amount for a foundation's endowment. However, in practice, the supervisory authorities require sufficient assets to allow the foundation to fulfil its purpose sustainably. An endowment capital of CHF 50,000 is generally considered a workable minimum for a small foundation. For foundations of national or international scope, the initial assets are often several hundred thousand or millions of francs. Donor advised funds allow contributing to existing foundations with smaller amounts.