Family office in AustriaOverview
The Privatstiftung is a legal entity without owners, members or shareholders. A founder dedicates assets — at least EUR 70,000 under § 4 PSG — to a purpose set out in a foundation declaration made by notarial deed, and the foundation comes into existence on registration in the commercial register. The public foundation deed sets out the name, purpose and governance; the confidential supplementary deed (Stiftungszusatzurkunde) can name beneficiaries and distribution rules. A foundation may not conduct a commercial business beyond ancillary activity or act as a personally liable partner, which is why operating businesses are held through subsidiary companies.
Governance is prescribed. The board (Stiftungsvorstand) needs at least three members, two of whom must have their habitual residence in an EU or EEA state, and beneficiaries and their close relatives are excluded from the board. A foundation auditor is appointed for each year, a supervisory board is mandatory for large foundations, and families commonly add an advisory board (Beirat) to keep family influence within the limits the courts have drawn. The founder can retain the right to amend or revoke the declaration, but only if it is reserved expressly at formation.
Taxation was tightened by the 2025 budget legislation (the Budget Accompanying Act 2025 and the Budget Restructuring Measures Act 2025 Part II). From 1 January 2026, contributions to a private foundation attract an entry tax (Stiftungseingangssteuer) of 3.5%, up from 2.5%, and the interim tax (Zwischensteuer) on interest, certain capital gains and some property gains rose from 23% to 27.5%. Distributions to beneficiaries remain subject to 27.5% capital gains withholding tax (KESt), against which interim tax is credited. Dividends from Austrian and qualifying foreign participations remain exempt at foundation level, and Austria has levied no inheritance or gift tax since August 2008, although significant gifts must be notified to the tax office.
On the regulatory side, Austria transposes MiFID II through WAG 2018. Discretionary portfolio management and investment advice for others require an FMA licence, either as an investment firm or as a national investment service provider (Wertpapierdienstleistungsunternehmen) with a narrower scope. A single-family office that serves only its own foundation and the companies under it can rely on the group exemption carried over from MiFID II, and family investment vehicles that do not raise capital from third parties are generally outside the AIFM regime. A multi-family office serving unrelated families falls inside the perimeter.
Key benefits
- No inheritance or gift tax, which makes generational transfers within a holding or foundation structure tax-neutral apart from transfer-specific taxes
- A long-established foundation vehicle with a confidential supplementary deed and settled case law on governance
- International participation exemption on dividends and, where no option is exercised, on gains from foreign holdings of at least 10% held for at least a year
- Corporate income tax of 23% and group taxation for domestic and first-tier foreign subsidiaries
- GmbH and FlexCo minimum share capital reduced to EUR 10,000 since 2024, with the FlexCo allowing employee value shares for family office staff
- EU/EEA membership, euro currency and a broad double tax treaty network
- Proximity and frequent combination with Liechtenstein, Swiss and German structures
Requirements
- Foundation declaration and, where used, supplementary deed executed as a notarial deed; registration in the commercial register by the board
- Minimum endowment of EUR 70,000 paid in at formation, with additional assets contributed as needed
- Board of at least three members, two habitually resident in the EU/EEA, with no beneficiaries or their close relatives on the board
- Appointment of a foundation auditor (Stiftungsprüfer) and preparation of audited annual financial statements
- Disclosure of the foundation documents and beneficiaries to the competent tax office; failure can raise the entry tax rate to 25%
- Reporting of beneficial owners to the beneficial owners register under the WiEReG, with annual confirmation and updates on change
- FMA licence under WAG 2018 for any office offering portfolio management or investment advice to unrelated families or the public
- AML/CFT compliance under the Financial Markets Anti-Money Laundering Act for licensed entities: risk assessment, due diligence and reporting
- CRS and FATCA classification of the foundation and holding companies; a foundation can be a reporting financial institution where its assets are professionally managed
- Effective management in Austria for tax residence and treaty access of the holding company
Structure designs
Privatstiftung with GmbH holding below it
EUR 70,000 minimum endowment
The standard Austrian family structure. The foundation owns a holding GmbH that holds operating companies and investments, so dividends rise tax-free under the participation exemption while the foundation secures long-term ownership and the family's distribution rules.
Family holding GmbH or FlexCo
EUR 10,000 minimum share capital
Suits families who prefer direct ownership and flexibility over the permanence of a foundation. Shares can be gifted to the next generation without inheritance or gift tax, while a syndicate agreement controls voting and transfers.
Family office service company
A separate GmbH employs the investment and administration staff and provides services only to the family's foundation and companies, keeping the office within the group exemption and separating employment, liability and costs from the assets.
Licensed multi-family office
For an office that will serve unrelated families: an FMA-licensed investment firm or investment service provider under WAG 2018, with fit and proper managers, capital and AML systems.
Combined Austria–Liechtenstein or Austria–Switzerland structure
Families with members in several countries often pair an Austrian holding with a Liechtenstein foundation or a Swiss asset manager. Austrian rules on foreign foundations, including the higher entry tax for non-transparent foreign foundations, need to be modelled in advance.
Step-by-step process
- 1
Objectives and family mapping
Clarify succession goals, the role of the next generation, the assets to be contributed and the residence of each family member.
- 2
Structure and tax modelling
Compare a foundation, a holding company and a combined structure, modelling entry tax, interim tax, KESt on distributions, real estate transfer tax and the participation exemption.
- 3
Drafting the foundation documents
Prepare the foundation deed, the supplementary deed, the advisory board rules and the family charter, balancing family influence against board independence.
- 4
Notarisation, endowment and registration
Execute the notarial deed, pay in the endowment, appoint the board and auditor and apply for registration in the commercial register.
- 5
Holding and regulatory set-up
Form the holding and service companies, contribute assets, register beneficial owners under the WiEReG and, where third parties will be served, prepare the FMA licence application.
- 6
Ongoing governance
Annual audit and accounts, tax filings, board and advisory board meetings and periodic review of beneficiaries, distribution policy and residence changes.
Typical documents
- Passports and proof of address for founders, board members and beneficiaries
- Draft foundation deed and supplementary deed
- Family tree and ownership chart down to the ultimate beneficial owners
- Source-of-wealth and source-of-funds evidence for the endowment and contributed assets
- Valuations of contributed companies and Austrian real estate
- Consent declarations of board members and the foundation auditor
- Articles of association of holding and service companies
- CRS and FATCA self-certifications and tax identification numbers
- For a licensed MFO: FMA application, business plan and fit and proper documentation
How Legal Wealth helps
Legal Wealth helps families decide whether a Privatstiftung, a holding company or a combination fits their succession plan, and then coordinates Austrian notaries, tax advisers and board candidates to put it in place. We model the 2026 foundation tax rules against alternatives, draft governance that keeps the family involved without compromising the board, handle beneficial-ownership and CRS classification, and connect the Austrian structure with family members and assets in other jurisdictions — discreetly and with compliance first.
Enquire with Legal WealthFrequently asked questions
What changed for Austrian private foundations in 2026?
From 1 January 2026 the entry tax on contributions rose from 2.5% to 3.5%, and the interim tax on certain investment income rose from 23% to 27.5%, under the 2025 budget legislation. Distributions remain subject to 27.5% KESt.
Can family members sit on the foundation board?
Beneficiaries, their spouses and close relatives cannot be board members. Families usually exercise influence through an advisory board and through rights reserved to the founder, within the limits set by the PSG and the courts.
Does Austria levy inheritance or gift tax?
No. Inheritance and gift tax was abolished with effect from 1 August 2008. Gifts above certain thresholds must be notified to the tax office, and real estate transfer tax applies to transfers of Austrian property.
Does a single-family office need an FMA licence?
Not usually, if it serves only its own foundation and group companies. Offering portfolio management or investment advice to unrelated families or the public requires a licence under WAG 2018.
Can a non-EU family set up an Austrian foundation?
Yes. There is no nationality or residence requirement for founders or beneficiaries, but two of the three board members must be habitually resident in the EU or EEA, and tax outcomes depend on where the beneficiaries live.
Does a family office give a right to live in Austria?
No. Residence is a separate process under the Settlement and Residence Act, for example a quota-based settlement permit for persons of independent means or a Red-White-Red Card for qualified staff. Austrian citizenship for exceptional contributions is a discretionary procedure.
Last reviewed: 2026-10. Requirements, fees and timelines change. Information is general, reviewed on the date shown, and is not legal or tax advice.
