23 March 2023

Effects of the Revised Corporate Law on Swiss Foundations: New Obligations for Foundations

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The revised corporate law which came into force on 1 January 2023 conferred the following new obligations upon the council of a foundation: the council must notify the supervisory authority in the event of imminent insolvency or over indebtedness of the foundation and has the duty to disclose the remuneration of the council and management members.

Due to the revised corporate law, in the event of imminent insolvency or over indebtedness, the council of the foundation has no longer to prepare an interim balance sheet but must notify the supervisory authority immediately (art. 84a Civil Code). For the determination of over-indebtedness, the provisions of the stock corporation law shall apply.

Furthermore, foundations must disclose to the supervisory authority the total amount of remuneration such as fees, bonuses, non-monetary benefits, or payments for ad-ditional work, whether paid directly or indirectly to the council members and, if applicable, to the management members (art. 84b para. 1 Civil Code).

All foundations must produce a remuneration report disclosing the total compensation for the council and management members as well as the amount attributed to each member, stating the name and function of the member in question. This new disclosure duty applies the first time for the calendar year 2023.1

Despite controversial discussions, however, the Swiss Parliament failed to establish an explicit federal provision on the compensation of council members of charitable foundations. Such a provision would have been crucial since the tax authorities in certain cantons have a restrictive perception towards the council members’ compensation and qualify a compensation as contradictory to the altruistic concept of charitable foundations. Hence, a compensation may lead to the rejection of the tax exemption for charitable purposes. Considering the economic impact of certain charitable foundations, this perception arguably appears outdated and no longer expedient. Therefore, one may state that the council of a charitable foundation may provide for compensation for its activities, subject to three conditions: the compensation must be appropriate, may not contradict the statutes and the foundation’s fund must be sufficient to pay the compensation.2

In this context, the new practice of the cantonal tax authority in Zurich is highly appreciated: an adequate remuneration of the foundation board of charitable foundations is no longer an obstacle to tax exemption. The canton of Zurich is thus strengthening its position as a foundation hub.

We expect that this new practice in the canton of Zurich will also be relevant for other cantons. However, until there is a shift of paradigm at federal level, we strongly recommend that foundations review their compensation practices and adjust them if necessary. We are happy to assist and look forward to hearing from you.


1 See for guideline the ESA fact sheet “Offenlegung von Vergütungen an Stiftungsrat und Geschäftsleitung“ of 9 January 2023.

2 See the short interview with Nils Güggi, the head of the ESA: www.swissfoundations.ch/aktuell/esa-aktualisiert-musterstatuen/