1. Introduction

Foundations have for a long time been available in several civil law jurisdictions, starting in Liechtenstein in the late 1930s, later in other European countries and more recently in Panama and the Netherland Antilles.

They were originally created for the purpose of providing protection for assets as well as confidentiality as the Second World War was about to break out. The combination of Liechtenstein foundations and Swiss banking secrecy was a great combination at that time.

Foundations have since become well known and very acceptable in many civil law jurisdictions, especially those in Europe and Latin America, where trusts are less well known, frequently misunderstood and not always acceptable, mainly because trusts often involve the complete surrender to the trustee of legal ownership and control of the settlor’s assets, which need not happen in the case of foundations.

2. Legal requirements, specifications

Also, a foundation, like a company, is a distinct legal entity, which a trust is not, resulting in foundations and companies enjoying limited liability, but trustees being exposed to possible personal liability, certainly more so than a foundation’s council or officers or a company’s directors or officers.

A foundation does in fact constitute a hybrid between a trust and a company, having several aspects in common with one or the other, such as:

  • Like a company but unlike a trust, a foundation may enjoy unlimited duration.
  • Like a trust but unlike a company, a foundation has beneficiaries and can also have a protector.
  • Like a company but unlike a trust, a foundation must be registered and have a registered office.
  • Like a trust but unlike a company, a foundation can be established by will.
  • A foundation must have initial assets of a value of not less than $10,000.00, whereas there is no such minimum prescribed for trusts or companies, although, in practice, all three entities would probably have assets well in excess of $10,000.00, if not initially, then most likely when activated.
  • A foundation would normally have a foundation council, some of whose duties would be similar to those of a trustee or the directors of a company. Instead of a council, a foundation may have some other governing body or supervisory person, such as a protector. In addition, a foundation must have a secretary and may also have other officers, which a company too would normally have.
  • Whilst a company must have articles of association, a foundation is not required to have articles, although it may do so. In the absence of articles all provisions concerning the conduct and operation of a foundation would normally be included in its charter or, where appropriate, a foundation would simply rely upon the provisions contained in the Act.
  • Like a trust or an IBC, a foundation may redomicile in another jurisdiction and a foundation established in another jurisdiction may redomicile in The Bahamas. The statutory provisions are similar to those for an IBC.
  • Like a trust, which may include in terrorem provisions in its trust instrument, a foundation may include such provisions in its charter.
  • Like a trust, a foundation may include a restriction against alienation in any instrument of disposition to a beneficiary.
  • Like a trust, a foundation may be used to avoid forced heirship in other jurisdictions.


Other purposes for which foundations may be used include:

  • Estate planning
  • Tax planning
  • Asset protection
  • Preserving family wealth
  • Preserving confidentiality
  • Segregation of assets
  • Establishing charities

There are no doubt many purposes for which trusts or companies are presently used, for which foundations may also be used and, when there are purposes for which a company is better qualified than a foundation, a company for such purposes could be set up as a subsidiary of a foundation.

A foundation may be created by a charter duly executed by the founder or founders, or by a will with the testator as the founder. If the charter makes provision for revocation of the foundation, then the founder may revoke same at any time after its creation.

The charter of a foundation must state its name, details of the founder, its purposes or objects, the initial assets being endowed, the designation of its beneficiaries or how they are to be ascertained or that it is a charity, the definite or indefinite period for which it is established and details of its secretary and registered office.

The charter may also make provisions for the reservation of rights or powers to the founder, the appointment of officers, the appointment of an auditor, the appointment of a foundation council, the appointment of a protector, the amendment of the charter, the making of articles, the endowment of additional assets, the addition or removal of beneficiaries and the redomiciliation of the foundation.


3. The security factors of a foundation

There is a model charter set forth in the Schedule to the Act, all or some of the provisions of which may be adopted by a foundation. The charter and articles (if any) may, but need not be filed at the Registry.

However, in order to register a foundation there must be filed at the Registry:

  • A statement signed by the secretary or the foundation’s attorney containing its name, the date of the charter, a summary of the foundation’s purposes and objects, the date of the articles (if any), details of the foundation’s founder, first officers, foundation council or other governing body or supervisory person and registered office, the period for which it is established and the value of its initial assets.
  • A statutory declaration of due compliance signed by the secretary or the foundation’s attorney.
    The above documents must, of course, be accompanied by the prescribed registration fee.
    If the charter is amended as to any of the items contained in the above statement, the secretary must file at the Registry within 14 days of such amendments taking effect a notice containing details of same.
    The Act contains details of the appointment, qualifications, duties and meetings of officers (including the secretary) and the foundation council and the appointment and qualification of auditors. It should be noted that the secretary must be duly licensed under the Financial and Corporate Service Providers Act or be a trust company duly licensed under the Banks and Trust Companies
  • Beneficiaries who are treated as residents for exchange control purposes.
    Provisions for a foundation’s liquidation or winding up and its subsequent removal from the Register are contained in the Act, as are provisions for its restoration to the Register in certain circumstances.
    Finally, there is provision for the making of regulations for creating forms, prescribing fees, establishing liquidation and winding up procedures, etc. It is hoped that these regulations will soon be prepared and be ready when the Act is passed, which I understand and hope will take place early next year as foundations are a product whose time has come, in fact came several years ago, for a common law jurisdiction such as The Bahamas and we would like to be able to offer this product to our clients before Cayman or Barbados, who I hear are presently working on their own foundation laws.

4. Additional info, Overview: The top banks in Austria

Erste Group Bank

This bank was founded in 1819 and is headquartered in Vienna. The bank employs around 49,381 staff and is present in 7 countries. Erste Bank operates through 3,063 branches in Austria, the Czech Republic, Slovakia, Romania, Hungary, Croatia, and Serbia.

It is the largest bank in Austria, offering a wide range of banking and other financial services to corporate and retail customers in Austria, Central and Eastern Europe, and internationally. As of 2016, the bank’s total assets were valued at $252 billion and total income was US$8,558 million.

RZB Group

RZB Group is one of the largest banks in Austria. Founded in 1927, the bank provides commercial and investment banking products and services to individuals, multinational companies, and financial service providers. It also offers corporate finance, and export and trade financing services, private banking, capital investment, leasing and real estate, and other bank-related services. It operates in Central, Western, and Southeastern Europe, and Asia.

The bank employs around 50,000 staff and is headquartered in Vienna. In 2016, the bank reported total assets of US$159 billion and total income of US$290 million.

UniCredit Bank Austria AG

UniCredit Bank Austria was established in 1855 and is into Corporate Banking, Private Banking, Retail Banking, and Corporate and Investment Banking segments. The bank operates in various countries, such as Italy, Germany, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Russia, Slovakia, Slovenia, Serbia, and Turkey.

The bank was formerly known as Bank Austria Creditanstalt AG. In 2008, it changed its name to UniCredit Bank Austria AG. The bank currently employs 117,659 individuals and is headquartered in Vienna. As of 2016, its total income amounted to US$22.17 billion and total assets reached US$1,014.5 billion.


BAWAG was founded in 1922 and provides banking products and services primarily in Austria, Germany, the United Kingdom, France, and the United States. The bank employs 3,528 staff and is headquartered in Vienna. It is present in Austria, Germany, the United Kingdom, France, and the United States. In 2016, the bank reported a total income of US$1,089 million and reported US$46.8 billion in total assets.

Raiffeisen Bank International AG

Established in 2010, the Raiffeisen Bank International is into private, commercial, and retail banking. The bank provides retail, corporate, and investment banking services. It offers various financing products and services, including corporate finance, structured finance, corporate bonds, factoring services, leasing services, and investment solutions. It employs 48,556 staff and operates 2,500 business outlets in Central, Southeastern, and Eastern Europe. As of 2016, the bank’s total income amounted to US$3,462 million and total assets reached US$131.9 billion.

Oesterreichische Kontrollbank AG

The bank is a special purpose bank. Founded in 1946, it provides financial and information services to the export industry and capital markets both in Austria and abroad. It is headquartered in Vienna and currently employs 442 staff. As of 2016, the bank’s total income was US$100.3 billion and total assets were US$31,263.4 billion.

Raiffeisen Bank Niederösterreich

Founded in 1927, the bank provides banking products and services. It employs 1,185 staff and is headquartered in Vienna. As of 2016, total income was US$267.43 billion and total assets were valued at US$327.3 billion. As of December 31, 2015, the bank was operating through 44 branches, which include 33 retail banking branches, 1 private banking office, 5 competence centers for trade and business customers, and 5 locations for the company’s organization and its employees.

OberBank AG

OberBank was established in 1869 and provides banking products and services to individuals and corporations. The bank employs 2,049 employees and is headquartered in Linz. It operates through a network of 159 branch offices, which include 98 branches in Austria, 28 branches in Germany, 21 branches in the Czech Republic, 9 branches in Hungary, and 3 branches in Slovakia. In 2016, the bank posted a total income US$549 million and reported total assets of US$22.5 billion.


Founded in 1888, HYPO NOE Gruppe operates as a regional bank in Austria. It operates in four different segments: Gruppe Bank, Leasing, Landesbank, and Other. The Gruppe Bank segment offers banking, real estate and corporate finance, and treasury services. The Leasing segment provides several leasing solutions. The Landesbank segment offers housing finance, insurance brokerage services, and funding for non-profit housing association building projects. The Other segment deals with construction, property development, management, and marketing activities.

The bank employs 863 staff and is headquartered in St. Pölten. As of 2016, the total income of the bank was US$146.8 billion and total assets were US$18,155.46 billion.

Raiffeisen-Landesbank Steiermark

The bank was established in 1927 and is based in Graz. With 926 staff, the bank operates through Retail, Corporate, Equity Investments, Capital Market and Treasury, and Other segments. In 2016, it posted a total income US$15.88 billion and reported total assets of US$17,647.7 billion.

It must be highlighted, that these banks shall not be a competitor to our Trust, since we can ensure total, 100% anonymity for our clients (advantage of Anglo-Saxon legislative entities) while the Austrian banks has informative obligation towards the state and authorities.