Foundations and activities of funds in Austria are governed by the Law on Foundations of 1993.
It stipulates that the Fund is a legal entity carrying out activities for non-commercial purposes. Such an organization has not the shareholders or members, but there are beneficiaries.
To create a fund founder has to prepare special application showing the fund’s name, address, and goals, assets that are transferred to the disposal of the fund, beneficiaries and other conditions. Usually the application has two parts, the first of which defines the main parameters of the Fund; it must be registered in the notary’s office and submitted to the Registry. The second part, in which beneficiaries are usually specified, remains confidential.
The law on funds does not launch targets, but determines the impossibility of regular business activities and entering a partnership with unlimited liability. Thus, in Austria, the fund is usually set up to manage the family estate or for charitable purposes.
Creating a fund founder defines the persons who are included in the fund management institution- Board, as well as he can determine person (including the Beneficiary), who are forming advisory organ – Advisory Board. Each fund must have appointed auditor.
Austrian Law on Fund provides the possibility for the founder to indicate in the application the right to withdraw to the fund disposed assets. But this note automatically creates an opportunity for potential lenders to reclaim property. Therefore, in practice, this possibility is expressly excluded from first part of the application, in some cases; the founder is listed as the beneficiary.
To create a fund, its assets should be in the amount of not less than 70 thousand euro. Like any other companies, the fund in Austria provides financial statements to the tax authorities and pay taxes according to law.