Private Foundations in Germany

The boom in private charitable organizations and foundations continues uninterrupted in Germany. Each , hundreds of new legally-recognized foundations are formed year in Germany. More and more socially minded individuals consider building a foundation as they contemplate what to do with the wealth they have accumulated. The reform of German foundation law and the German law of charitable organizations that took place in 2007 fueled the trend by conferring tax advantages on those who pursue this course of action. With the growth in foundations comes increased demand for qualified expertise in this area of the law.

WINHELLER Attorneys at Law are your competent, loyal, and independent advisors in matters of German foundation law, and will be pleased to accompany you as you develop your charitable endeavors. We are accountable only to your interests. This distinguishes us from other charitable consultation providers, such as banks or asset advisors, who make money from  administration fees and who therefore may lean toward advising clients to start a foundation rather than pursue other options. However, it is of no concern to us whether you choose to build a foundation or not. Our sole concern is whether starting a foundation is the right choice given your individual situation and your needs and goals. We think outside the box, and “can do more than just foundations”. We would be happy to explore alternatives to conventional foundations, and will explain the tax possibilities of each one.

WINHELLER Attorneys at Law specializes in German foundation law. We will evaluate whether starting a foundation is the right choice for you and, if so, will tailor the foundation to your personal situation. If you choose to form a foundation in another country, we will work closely with colleagues in that country.

In particular, we can help with the following:

• Deciding whether creating a charitable foundation makes sense, compared with alternative wealth disposition options,
• Creating a foundation (charitable foundation, family foundation, business foundation, foundation trust, mixed forms, etc.),
• Choosing the right location (German State, Germany or in a foreign country),
• Questions on German foundation law and on regulatory agencies in German states,
• Taking advantage of all the tax benefits of a foundation, with regard to income tax, gift tax, and inheritance tax issues,
• Other special tax considerations relating to charitable organizations (for example, substitute inheritance tax, withholding tax, taxability of dividends, taxability of business activities, sales tax discounts, etc.),
• Choosing a strategy for reducing or eliminating the so-called substitute inheritance tax,
• The extent to which a foundation is a suitable vehicle for business succession,
• Questions on fundraising and endowment contributions,
• All questions on German foundation law and German tax law that arise in relation to the day-to-day operation of the foundation, and
• The choice of a profitable yet legally sound investment strategy, as well as the administration and protection of the foundation's assets.

We consider ourselves a one-stop shop for foundations. In addition to legal and tax advise, we offer further services; either directly or from cooperating experts. Our accountants can, for instance, help you set up an accounting system, produce yearly reports, and generate grant and donation documentations – all in compliance with German foundation law and nonprofit tax law. From a financial perspective, we will be happy to refer you to fundraising specialists who will work closely with you on issues such as soliciting donations and other third-party funding for your foundation.