New foundation law in Germany

On July 1, 2023, the new foundation law came into effect. It applies to all foundations with legal capacity under German law (rechtsfähige Stiftungen), i.e. all foundations with the own legal ability to enter into contracts, own assets, and exercise legal rights and obligations. Indirectly, the new legislation also concerns other forms of foundations, such as trusts, as well.

The new provisions affect all aspects of foundation life – from the establishment of the foundation and the design of its articles of association to asset management, the activities and liability of foundation bodies (management, board of trustees or supervisory board), and structural measures such as mergers and dissolutions. Furthermore, a public foundation register is being created nationwide.

The reform will improve and standardize many points that were previously incomplete or inconsistent. Hence, it will bring more legal certainty, flexibility and options for legal structuring. Therefore, all existing and all newly established foundations are recommended to deal with the new regulations.