Foundations in Germany
Legal and tax advice for German foundations
The boom in charitable organizations and foundations continues uninterruptedly in Germany. Each year, hundreds of new legally-recognized foundations are formed there. More and more socially minded individuals and entrepreneurs consider building a charitable foundation as they contemplate what to do with the wealth they have accumulated. Existing nonprofit organizations and business companies also follow suit - albeit regularly for other reasons.
Tax advantages for German foundations
German foundation tax law fuels the trend by conferring comprehensive tax advantages on charitable foundations as well as their founders. In this respect it is important to know that the tax benefits for charitable foundations are not - unlike e.g. in the USA - lower than those of other charitable organizations. On the contrary: Foundations are even better off in German tax law in some places than other legal forms like charitable associations or charitable LLCs.
German law also permits the establishment of foundations which do not promote charitable but purely private purposes. For example, so called family foundations serving the private interests of the founder and his family are generally taxed like any other legal entity. However, as long as they do not run a business – as is usually the case when a foundation merely serves to manage the founder´s assets – family foundations do not owe any trade tax, i.e. the total corporate income tax burden of a family foundation is typically 15,825% only.
Setting up a foundation in Germany at a fixed price
In order to support you in founding a German foundation, we prepared three different packages. We offer all of the following services in English or German.
Basic
- 15-minute short initial call to clarify the facts and discuss our cooperation (if it turns out that chosen package is not suitable: rebooking to other package possible)
- 1 hour telephone consultation for detailed discussion of the facts and circumstances as well as your wishes and goals
- If Orientation Plus Package was booked in advance: Discussion of the statement and its results
- Detailed guide for establishing the German foundation: i.e. description of the specific steps required to establish the foundation
- Drafting of bilingual (German/English) statutes of the foundation to be established (preparation of the foundation agreement not included) based on the client's specifications, including 2 work loops (further work loops on an hourly rate basis or after upgrading to Founder Package or All inclusive Package)
- Telephone conference to discuss the outcome (guideline/statutes) and the next steps to be taken (max. 2 hours)
- We offer this service at a fixed price. Please contact us for more information about pricing.
- Further option (not included in the fixed price): Drafting of a bilingual (German/English) foundation agreement based on the client's specifications incl. 2 work loops
Founder
Includes all services of the Basic Package, as well as:
- Drafting of a bilingual (German/English) foundation agreement based on the client's specifications (incl. 2 work loops)
- Assistance in the complete establishment of the foundation. This includes the following services:
- Making adjustments to the statutes, if necessary (2 work loops incl. 2 telephone conferences of 1 hour; further work loops based on hourly rates)
- Request for a preliminary review of the final draft of the statutes by the German tax authorities for the purpose of recognizing the foundaton as a tax-exempt organization (2 work loops; further work loops based on hourly rates)
- Coordination of the statutes and the foundation agreement with the responsible foundation supervisory authority
- Registration of the foundation with the foundation supervisory authority
- Entry in the Transparency Register
- After founding of the entity, request of determination letter (so called “determination of compliance with statute-related preconditions”) from the tax authorities according to Section 60a German Fiscal Code
- 1 hour final consultation by phone
- We offer this service at a fixed price. Please contact us for more information about pricing.
All inclusive
Includes all services of the Basic Package and the Founder Package, as well as
- Tax registration, opening balance sheet
- Setting up nonprofit accounting plus 10% discount on nonprofit accounting in the first year and 5% in the second year after establishment
- Setting up payroll accounting plus 10% discount on payroll accounting in the first and 5% in the second year after establishment
- Managing director service contract (2 work loops)
- Business address (PO box) with postal service at our office for the first 12 months
- Annual status consultation for the first 2 years
- Discounts on the available add-ons (see below)
- We offer this service at a fixed price. Please contact us for more information about pricing.
Add-ons
- Recruiting by WINHELLER
Benefit from the years of experience of our HR team! We help you find the right personnel for your organization. - Legal and tax advisory services at an hourly rate
We are happy to offer you any additional legal or tax services at a fair rate, e.g. assistance in setting up a German bank account. - Business address with us
Register your Business address (PO box) with postal service at our office in Frankfurt/Main.
Contact us at +49 69 76 75 77 80 or info@winheller.com!
No package fits your needs? Your case is so individual that we cannot provide optimal coverage with our package offers? We are as individual and flexible as you need us to be: Of course, you are more than welcome to book us at our usual hourly rates right from the start in order to book individual services. Just get in touch with us!
Our services regarding German foundation law
Whether establishing a foundation is the right choice for you depends on a number of aspects, especially your current life situation, your plans and wishes and of course on whether you are a private individual or a company or an existing NPO. Provided that the establishment of a foundation comes into consideration for you (or your company or NPO), we will tailor the foundation to your personal situation.
Among other things, we can help you with the following:
- Deciding whether creating a charitable or family foundation makes sense, compared with alternative wealth disposition options,
- Advising on when a foundation can be a suitable vehicle for business and wealth succession, as well as (for business companies and NPOs as founders) for marketing and fundraising purposes,
- Creating your foundation (charitable foundation, family foundation, corporate foundation, foundation trust, mixed forms, etc.),
- Choosing the right jurisdiction within Germany (with its 16 German States (called “Bundesländer”)) or abroad in a foreign country; if you choose to form a foundation outside of Germany, we will work closely with colleagues in that country,
- Answering your questions on German foundation (tax) law and on regulatory questions with respect to the different regulatory authorities in the 16 German States,
- Taking advantage of all the tax benefits of a foundation and its founder and donors, specifically with regard to income tax, gift tax, and inheritance tax issues,
- Any other special tax considerations relating to charitable and non-charitable foundations, like withholding taxes, taxability of distributions, taxability of the foundation's business activities, VAT discounts, tax advantages with respect to foundation holding structures etc.,
- Answering your questions on fundraising, international giving and grantmaking, and endowment contributions, and
- Assistance with respect to all questions on German foundation law and German tax law that arise in relation to the day-to-day operation of your foundation.
Comprehensive advice for your foundation
We consider ourselves a one-stop shop for foundations and high net-worth individuals (HNWI): In addition to legal structuring and tax planning, we offer further services regularly requested by our clients like foundation accountancy (setting up an accounting system, producing yearly reports and financial statements, tax return filings, tax compliance etc.), and grant and donation documentation – all in compliance with German foundation law and German (nonprofit) tax law. From a financial perspective, we will be happy to refer you to external fundraising specialists who will work closely with you on issues such as soliciting donations and other third-party funding for your foundation.
Your German Foundation Attorney
Do you intend to form a foundation in Germany? Or do you seek legal advice on German foundation matters? WINHELLER are your competent, loyal, and independent advisors in matters of German foundation law, (nonprofit) tax law, asset protection and succession and estate planning. Our tax advisors and lawyers are happy to help you realize your charitable goals by setting up a charitable foundation or support you in structuring your assets and securing and providing for your family with the help of a family foundation.
Our attorneys and their teams are looking forward to answering all your questions regarding German foundations and German foundation (tax) law. Just send us an e-mail (info@winheller.com) or give us a call (+49 69 76 75 77 80).
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Or give us a call: +49 69 76 75 77 80