How to Open a Foundation (Stiftung) in Germany

Which type of foundation fits your goal?

Choosing the type is the first real decision, and it follows directly from what you want the structure to do: give money away (philanthropy), keep wealth or a business inside the family (succession and asset protection), spend an endowment down over a defined period, or move quickly on a smaller budget. Germany has roughly 25,777 legal-capacity foundations, of which around 90% are charitable (a sector estimate, not an official register figure). The table below maps each vehicle to the goal it serves; the sections that follow explain capital, recognition and tax in detail.

How much capital do you really need?

There is no statutory minimum capital for a German foundation. BGB §80 requires only that the assets are sufficient for the permanent and sustainable fulfilment of the purpose. Any fixed "minimum" figure you see quoted elsewhere is practice, not law.

In practice, the state foundation authorities (Stiftungsbehörden) generally recommend around €50,000 as a floor for an independent, self-administering foundation, and a legal-capacity foundation is usually recognised from roughly €100,000 upward, with a mid-six-figure endowment often advised for genuine viability. These bands are guidance, not statutory thresholds.

Below about €50,000, the usual route is a Treuhandstiftung (fiduciary foundation) or a foundation fund hosted by an existing foundation, rather than an independent legal-capacity Stiftung. That keeps the philanthropic intent intact without the endowment a standalone foundation realistically needs.

How a foundation is created and recognised

BGB §80(2) requires two acts. First, the Stiftungsgeschäft (founding transaction), in which the founder commits the assets and adopts the Satzung (statutes). Second, the Anerkennung (recognition) by the competent foundation authority of the Land.

Two separate authorities are involved, and they do different jobs:

1. The Stiftungsbehörde (state foundation authority) grants legal recognition and supervises later statute amendments and any dissolution.
2. The Finanzamt (tax office) separately determines charitable (gemeinnützig) tax status.

The application is filed with the foundation authority together with the Stiftungsgeschäft and the Satzung. The foundation becomes legally capable on receipt of the recognition certificate. As an indicative timeline, the recognition step often takes around 15 to 20 working days, though this varies by Land, can be handled remotely, and may run longer where the statutes are complex or charitable status is being reviewed in parallel.

Charitable status and tax benefits (AO §§51–68)

Charitable status (Gemeinnützigkeit) is governed by the Abgabenordnung, AO §§51–68. To qualify, the foundation must pursue a purpose listed in AO §52, which enumerates more than 25 public-benefit purposes including science, education, religion, health, youth welfare, art, environment and social welfare. It must also comply with the three core principles: selflessness (AO §55), exclusivity (AO §56) and directness (AO §57). Beneficiaries may not be a closed circle, such as a single family.

Where Gemeinnützigkeit is recognised, the benefits are substantial:

• Exemption from corporate income tax and trade tax on the charitable sphere.
• Reduced or zero VAT and no property tax on the charitable sphere.
• Donor deductibility: large endowment gifts are deductible up to €1 million, or €2 million for joint filers (an indicative cap to confirm with a tax adviser).
• A narrow exception under AO §58(5) lets a foundation pay up to one-third of its net income to the founder and close relatives, without losing charitable status.

These caps and the precise tax treatment depend on individual circumstances. For charitable-status and tax advice, speak to an English-speaking Steuerberater before you commit assets.

Family foundations (Familienstiftung)

A Familienstiftung serves a private family purpose rather than a charitable one. It is used to hold assets or an operating business across generations, for succession planning and to perpetuate family wealth. Because its purpose is private, it is generally not tax-exempt.

The defining tax feature is the Erbersatzsteuer (substitute inheritance tax), levied every 30 years to simulate a generational transfer that would otherwise occur on death. Transfers of assets into and out of the foundation can use Tax-Class-I privileges. For founders weighing a family foundation against a corporate holding structure, see Familienstiftung vs a holding GmbH for succession and asset protection.

The new foundation register (Stiftungsregister) – deferred to 2028

This is the point most English-language sources get wrong, so read it carefully. The central Stiftungsregister will be maintained by the Federal Office of Justice (Bundesamt für Justiz) under BGB §82b ff. and the Stiftungsregistergesetz (StiftRG). It was originally scheduled to commence on 1 January 2026.

Verify before relying on this: The start of the Stiftungsregister was deferred by two years to 1 January 2028 by the Gesetz zur Änderung des Stiftungsregisterrechts, published in BGBl. I 2025 Nr. 319 on 11 December 2025, because the technical systems were not ready. Any page telling you the register is live in 2026 is out of date.

Once live, registration will be declaratory but will carry a publicity effect (Publizitätswirkung) comparable to the commercial register: registered representation and master data become authoritative for legal dealings, with broad public inspection that can be restricted where a legitimate interest is shown. Registered foundations are expected to carry the suffix "e.S." (eingetragene Stiftung), or "e.VS." for consumption foundations (a detail to confirm against the StiftRG as amended). Existing foundations must register within the deferred transitional window, originally end-2026 and now shifted to end-2028.

Foundation vs gGmbH – the simpler alternative

For many philanthropic budgets, a foundation is more structure than the goal requires. A gGmbH (gemeinnützige GmbH) is a GmbH that holds charitable status. It needs €25,000 share capital, of which €12,500 must be paid in at formation, plus tax-office charitable approval, but it requires no Stiftungsbehörde recognition and carries no perpetual-endowment obligation. It offers limited liability; profits must stay within the non-profit purpose. A smaller variant, the gUG, can start from €1 per shareholder.

For smaller or more flexible philanthropy where a permanent endowment is not the point, the gGmbH is often the better fit than a perpetual foundation.

We cover the head-to-head in detail in our blog comparison, foundation vs gGmbH, which is the right starting point if you are torn between the two.

Do you need a notary?

A foundation is not created the way a GmbH is. There is no Handelsregister notarisation as the constitutive step. Under BGB §80, a foundation comes into being through the founding transaction plus authority recognition, so the legal trigger is state recognition, not notarisation. A testamentary foundation arises from a will. (If you want the conventional notary and Handelsregister route, that applies to companies, not foundations.)

How we help (English-speaking)

We work with you in English from selection to recognition: identifying the right type for your goal, drafting the Stiftungsgeschäft and Satzung, filing for Anerkennung with the competent Stiftungsbehörde, and handling the separate charitable-status filing with the Finanzamt. Where a perpetual endowment is not the point, we route you to the simpler gGmbH alternative instead. The aim is a structure that is recognised, tax-efficient where intended, and built to last.

Ready to set up a German foundation? Book a consultation and we will map the right vehicle to your goal.