Foundations in Austria
The Austrian foundation concept is quite distinct from other European countries and features two legal types of foundations: those based on the law for private foundations enacted in 1993 and those based on the law for federal foundations and funds of 1974. Private foundations outnumber federal foundations. While in most European countries foundations are required to pursue a public purpose, the more than 3000 private foundations in Austria can solely follow private purposes without contributing to civil society and welfare production.
An Austrian private foundation is a legal entity whose organization and purpose is largely determined by the grantor who provides the assets necessary to fulfill this objective. The private foundation is bound by the intentions of the grantor which are established in the declaration of establishment.
The legal framework of the private foundation is regulated in the Private Foundation Act Privatstiftungsgesetz (PSG) 1993. The Austrian private foundation is a legal person. Its structure is characterized by having no shareholder or proprietor, but having beneficiaries instead. The foundation must be domiciled in Austria and entered into the Commercial register.
The private foundation may be established for any purpose, for example, for family provisions (family foundation), the support of one or more enterprises or the support of art.
The main advantages of a private foundation are:
- Adaptation to individual requirements and needs
- Maintenance of assets for future generations
- Avoidance of conflicts regarding the heritage
The main parties of the foundation are:
- Board of Directors
- Supervisory Board/Advisory Board (optional)
- Foundation auditor
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