Luxembourg has a long tradition with respect to the establishment of non-profit organizations and foundations which dates back in 1928. Ever since, the legislation has evolved so the foundation is one of the most appreciated asset protection and estate planning tools in Luxembourg. In 2013, the government has amended the legislation so now both local and foreign citizens are allowed to set up private foundations in Luxembourg. It must be stated that the Luxembourg private foundation is the equivalent of foundations in other European countries.
You can obtain more information on the legislation related to the private foundation from our law firm in Luxembourg.
The private foundation is considered an “orphan entity” as it has no shareholders or any other members. Instead it has beneficiaries who can be the individuals creating the Luxembourg foundation or third parties. The foundation is usually created for a specific purpose and its creation will be acknowledged through a Ducal Decree.
It must be stated that apart from the private foundation, there is also the simple form of a foundation, also known as the non-profit organization which is created for social purposes. Our lawyers in Luxembourg can offer more information on the two types of foundations.
If for the establishment of a private foundation a minimum capital of 50,000 euros is required, in the case of the non-profit organization no minimum amount is needed. However, any capital provided for opening a Luxembourg foundation can made of cash or kind. Another requirement related to the establishment of a foundation is that it must have a board of directors. The foundation must have a registered address in Luxembourg.
No matter the type of foundation one decides to open in Luxembourg, a notarial document must be drafted and signed by the individual creating it. Other documents which can be prepared for creating a foundation are private agreements, testaments or even articles of association.
For assistance in registering a foundation in the Grand Duchy, please contact our Luxembourg lawyers.
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