A private foundation (Privatstiftung) is a legal entity created for the purpose of disposing of certain assets for clearly defined purposes. Since 1993, the law "On Private Foundations" has been in force in the country, according to which:
- A private foundation does not issue shares and does not have shareholders.
- It has no ultimate owner, and such a fund belongs to itself.
- It does not require disclosure of the identity of the beneficiaries and financial reporting.
- It is subject to tax incentives.
The key legislative act that regulates the activities of such funds is the Federal Law "On Real Estate Funds" (ImmoInvFG). They are supervised by the Financial Market Authority (FMA).
To establish an investment fund, it is necessary to contribute an authorized capital of at least EUR 70,000. Despite the fact that this legal entity has no shareholders, it still has a founder – a legal entity, an individual or a group of individuals, regardless of residency.