In Switzerland, foundations rely on a firm legal framework, primarily defined by the Swiss Civil Code (Articles 80–89 CC) which sets out the basic rules: a foundation is an independent legal entity with assets irrevocably dedicated to a specific purpose. In Geneva, this framework is complemented by specific cantonal laws and a dedicated supervisory authority.
Key principles to keep in mind
Independence and asset allocation
Once established, a foundation is legally autonomous: its resources must be used exclusively for the fulfilment of its stated purpose.
Mandatory supervision
Every foundation is subject to supervision by a competent authority: either the Federal Supervisory Authority for Foundations or, for those operating mainly in Geneva, ASFIP (Cantonal Supervisory Authority for Foundations and Pension Institutions). This supervision ensures that the foundation’s mission is respected at all times.
Amendments under strict conditions
Changing a foundation’s purpose or statutes is possible in exceptional circumstances, but the law imposes strict requirements to prevent misuse and preserve the founder’s intent.
Legal basis for tax exemption for acting in the public interest
The status of a tax-exempt institution acting in the public benefit is directly derived from the Federal Act on Direct Federal Taxation (LIFD) (in french) and the Federal Act on the Harmonisation of Direct Taxes of Cantons and Municipalities (LHID) (in french). According to Articles 56(g) LIFD and 23(f) LHID, a legal entity may be exempted from direct federal tax on profits and from cantonal and municipal tax on profits and capital if it pursues a purpose for the public benefit exclusively and irrevocably.
To clarify these conditions, the Federal Tax Administration issued Circular No. 12 of 8 July 1994. This document remains the point of reference for tax practice throughout Switzerland. It sets out six cumulative conditions for tax exemption on the grounds of acting in the public interest:
- Be a legal entity
- Carry out the exempt activity exclusively in the public interest
- Allocate funds irrevocably to the purpose of activities in the public benefit
- Engage in activities that effectively fulfil the recognised purpose for the public benefit
- Pursue a general interest objective of benefit to an open group of recipients
- Operate on a not-for-profit basis.
A regulated, collaborative ecosystem
In Geneva, this legal framework is supported by a genuine ecosystem of cooperation that closely involves public authorities, academic expertise, and professional networks.
- Philanthropy thus benefits from a robust institutional backdrop, supported by the Geneva Cantonal Office for Economic Development and Innovation (OCEI). As the main point of contact for foundations and associations, the OCEI acts as a facilitator: it assists project initiators, coordinates interactions with other State departments, and helps create favourable conditions for growth in the philanthropic sector.
- The Cantonal Tax Administration (AFC) and the Cantonal Supervisory Authority for Foundations and Pension Institutions (ASFIP) work together closely to ensure rigorous compliance with regulations while remaining attentive to the sector’s needs.
- Key umbrella associations such as SwissFoundations and proFonds represent foundations acting for the public benefit, encourage knowledge-sharing, and advocate for attractive national framework conditions.
- Finally, the University of Geneva's Centre for Philanthropy (GCP) brings a valuable academic contribution, supporting research, training, and dialogue among all stakeholders.
Together, these elements make Geneva a trustworthy, dynamic, open environment dedicated to the common good.