"Privatstiftungen" - the Austrian version of trust

The Act on Private Foundations, enacted in 1993, provides the legal framework for establishing foundations for other than charitable purposes in Austria. The Act was enacted to make Austria more competitive internationally vis-à-vis the laws on foundations and trusts of other countries (e.g. Liechtenstein) and to encourage foreigners to transfer their assets to an Austrian private foundation. The private foundation is commonly used as a vehicle to settle the succession in family enterprises as well as a holding vehicle and a financing holding company. This article examines the legal framework and tax aspects of Austrian private foundations