Gerd Kommer Foundations (“GKS”) offers three types of foundation: The German family foundation (“DF Foundation”) Liechtenstein family foundation (“LF Foundation”) and the German one non-profit foundation (“DG Foundation”). Each of these forms of foundation has specific advantages, which we will briefly introduce to you below. We would like to help you get an initial overview.
The three forms of foundation are presented in a deliberately chosen order: We start with the specifics of the DF foundation, followed by the LF foundation, which is next everyone The advantages of its German counterpart often have additional unique features. We will then introduce the DG Foundation, which can primarily be used to pursue philanthropic goals. At the end we compare all types of foundations.
The German family foundation is a private-benefit foundation that primarily serves to provide the founder and his family as well as future generations with economic support. This supply goal is supplemented by extensive asset protection measures, which are hardly achievable in this form through other legal and tax arrangements. The DF Foundation effectively protects the transferred assets from civil law risks, in particular from liability claims that could affect the founder himself.
A family foundation is an independent special purpose asset that can be viewed as an “institutionalized family member with an eternal obligation of loyalty”. This loyalty and reliability ensure that the assets are managed and protected in the spirit of the founder, regardless of personal or family changes. The DF Foundation also offers a flexible and effective solution for asset succession that goes far beyond the possibilities of a conventional will, as it enables continuous and precise implementation of the founder's wishes.
The minimum investment volume for a DF foundation is 500,000 euros. Construction is possible from 11,000 euros gross.
The LF Foundation offers all the advantages of German family foundation: Comprehensive asset protection, cross-generational regulation of asset succession and the long-term preservation of the family assets in the spirit of the founder. It effectively protects the assets from civil law risks and ensures the precise implementation of the founder's wishes across generations.
It also offers additional benefits. If you have concerns about political and/or tax risks in Germany or Austria (if you are a tax resident in Austria), the Liechtenstein foundation location enables an attractive cross-border diversification of family assets thanks to its political and economic stability as well as the non-existent national debt. Liquid assets owned by a LF foundation are protected from future tax changes in Germany, such as the introduction of a wealth tax. Added to this is the inheritance tax, which does not exist in Liechtenstein - also an advantage over the DF Foundation, for which the so-called “inheritance tax” is levied by the German tax authorities every 30 years.
The LF Foundation therefore represents a particularly robust solution when it comes to the long-term preservation and protection of your assets. It offers a flexible and effective structure for asset succession that goes far beyond the possibilities of a classic will. In addition, the assets are protected by the LF Foundation from unforeseeable political and economic scenarios in Germany or Austria.
The minimum investment volume for an LF foundation is 1.5 million euros. Construction is possible from CHF 7,500 gross.
The DG Foundation offers you the opportunity to make a sustainable contribution to society beyond your own life, be it through funding research projects, supporting groups of people in need or promoting art and culture. With a DG foundation, you can support the issue close to your heart in the long term and benefit from extensive tax advantages.
A DG foundation is largely tax-exempt and allows you to transfer assets to the foundation for a charitable purpose without being subject to gift or inheritance tax. This form of foundation also offers the opportunity to make tax-privileged donations and donations from third parties to recruit. Since DG foundations are an essential cornerstone in the promotion of charitable purposes in German society, it is unlikely that significant political risks will materialize with regard to the foundation's assets. As a result, it offers a stable platform for achieving charitable goals.
The number of legal foundations in Germany is constantly growing. In 2022 there were already over 25,000 foundations, more than 90% of which pursue non-profit, charitable or church purposes. A DG foundation offers you the opportunity to join this growing movement and realize your philanthropic goals in a long-term and sustainable manner.
The minimum investment volume for a DG foundation is 500,000 euros. Construction is possible from 13,500 euros gross.
Have you already set up a foundation or are you responsible for a foundation? The multiple award-winning asset management company Gerd Kommer Invest offers you the opportunity to place the asset management of existing private or non-profit foundations in our experienced hands. You benefit from our comprehensive and long-standing expertise in the management of liquid foundation assets, which we already use successfully for dozens of foundations in Germany and Liechtenstein.
Our investment approach is based on the results of decades of capital market research and many years of experience. You can find more details about our investment approach in our White paper or one of the numerous Books by Gerd Kommer.
The suitable foundation variant depends on whether the focus is on Asset protection and succession planning or on philanthropic goals lies.
One German family foundation is particularly suitable if the focus is on protection against civil law risks (corporate liability risks, matrimonial property settlement risks and compulsory share risks) and the cross-generational regulation of one's own succession.
One Liechtenstein family foundation also offers extended protection against political and tax risks in Germany. In addition, there is no inheritance tax, which is levied on German family foundations every 30 years and leads to a significant reduction in the foundation's assets.
One non-profit foundation is the suitable instrument if social commitment is to be anchored in the long term and combined with tax advantages.
In practice, it is advisable to carry out an individual analysis of the family, professional, business and financial situation as well as the goals and priorities of the prospective founder. This is the only way to create a sound basis for deciding whether and, if so, which foundation variant makes sense.
Both foundation variants offer a variety of advantages. Be it
For points 1 to 4, the advantages of a Liechtenstein family foundation are more pronounced. In addition, at the Liechtenstein location there is the Protection against tax increases and political risks in Germanywhich a German family foundation cannot offer – that is the nature of things. It is therefore particularly suitable for founders who want to meaningfully diversify the ownership structure of family assets across national borders.
The required minimum assets and possible establishment costs differ depending on the foundation variant and are intended to ensure that the foundation can pursue its purposes permanently and professionally.
For one German family foundation The recommended minimum investment volume is approx 500,000 euros, the construction costs start from 11,000 euros gross.
One Liechtenstein family foundation usually requires a minimum investment volume of approx 1.5 million euros on construction costs 7,500 CHF gross.
Even for a German one non-profit foundation a minimum investment volume of approx 500,000 euros recommended, the construction costs start from 13,500 euros gross.
The minimum assets estimated in each case serve to ensure sustainable asset management and a permanently functional foundation structure.
