Foundation Publicity - How Much Transparency Is Necessary?

With the new foundation register coming into effect on January 1, 2026, a new era of transparency and bureaucracy begins for foundations in Germany. For the first time, a nationwide, publicly accessible register will be established, which will obligatorily record all existing and newly founded foundations by the end of 2026. The electronic register will ultimately replace the previous state-level foundation directories and document the entire lifecycle of a foundation, from its establishment and amendments to its statutes to possible insolvency proceedings. While this significantly expands public access to information, it also raises considerable data protection concerns. Especially for non-profit family foundations, the register's publicity creates a conflict between the obligation to be transparent and the protection of confidential asset structures. Promptly planned measures, such as targeted restrictions on access or, in the case of new foundations, relocation abroad, can help avoid unwanted disclosures.

From Prof. Dr. Maximilian A. Werkmüller, LL.M, Professor of Finance and Family Office Management

On January 1, 2026, with the introduction of the so-called foundation register (§§ 82b ff. BGB), the second part of the Foundation Reform Act of 2021 will come into force. All foundations, including existing ones, must be registered there by December 31, 2026. With this register, for the first time in history, there will be a nationwide office where interested parties can obtain information about foundations. The foundation register exists alongside the transparency register, in which legally capable foundations have also had to be registered since 2017. The so-called foundation directories, which have previously been maintained at the state level, will likely quickly lose importance and will certainly be discontinued „in the foreseeable future.“ Although the foundation register will be maintained electronically, the registration must be notarized.

Overview of Public Disclosure for Foundations

Unlike the transparency register, which generally requires the legal entity „foundation,“ its boards of directors, and, at least in the case of family foundations, also beneficiaries to be registered, the foundation register requires all amendments to the founding charter to be filed, in addition to the charter itself, in written form. The foundation register reflects the entire lifecycle of a foundation. For this reason, the information and processes to be entered there are extensive. For example, the following must be registered:

• the name, the seat, the date of recognition or approval of the foundation or comparable administrative decision for foundations established before January 1, 1900, or created through a merger,
• for consumer foundations, also the time of the foundation's establishment, the first name, last name, date of birth, and place of residence of the members of the board of directors and their power of representation,
• the statutory limitations on the board of directors' power of representation according to § 84 paragraph 3 of the German Civil Code,
• the first name, surname, date of birth, and place of residence of the special representatives and their power of representation,
• the amendments to the articles of association made by the competent foundation bodies or the authority responsible under state law after the foundation has been registered,
• the extinction of the transferor foundation through amalgamation and merger,
• the dissolution of the foundation according to § 87 of the German Civil Code,
• the dissolution of the foundation according to § 87a of the German Civil Code,
• the appointment of a provisional insolvency administrator, if the foundation is additionally subjected to a general prohibition on disposal or if it is ordered that dispositions by the foundation shall only be effective with the consent of the provisional insolvency administrator,
• the dissolution of the foundation pursuant to Section 87b of the German Civil Code by the opening of insolvency proceedings, including an order for self-administration by the foundation and an order that certain legal transactions require approval, or by a resolution by which the opening of insolvency proceedings has been finally dismissed due to lack of assets, the revocation of the opening order, the order for self-administration, or the order that certain legal transactions require approval,
• the discontinuation of insolvency proceedings, the annulment of insolvency proceedings, the supervision of the fulfillment of an insolvency plan and its annulment, the first name, last name, date of birth, and place of residence of the liquidators and their power of representation as well as statutory restrictions on the power of representation according to § 87c paragraph 2 sentence 2, § 48 paragraph 2 and § 84 paragraph 3 of the German Civil Code (Bürgerliches Gesetzbuch), and the dissolution of the foundation.

A little surprising, given this multitude of registration obligations, is the absence of a query for the foundation's purpose. Apparently, the legislator assumes that this can be inferred from the foundation's statutes for the interested reader. Unlike the transparency register, the beneficiaries are also not to be recorded.

No access to documents of family foundations?

Given this wealth of information, the question rightly arises to what extent the data protection of the affected persons is preserved. While access rights of third parties, meaning individuals who cannot prove a legitimate interest, were restricted in the Transparency Register by a ruling of the European Court of Justice in 2022, the new Foundation Register permits access for „everyone“ and „at any time,“ § 15 of the Foundation Register Act. However, upon request, access can be restricted with regard to the documents to be submitted if there is a „legitimate interest“ of the affected persons. The law, however, does not regulate when this is the case. According to reports, the first state authorities have already decided not to make documents submitted to the Foundation Register accessible at all if they concern family foundations.

Applying for access restrictions to the Register of Foundations

It is easily understandable that families who manage their assets through private charitable family foundations have no interest in disclosing the structural data of these foundations to everyone who wants to know. For this reason, it is advisable to already consider defensive strategies. A very effective measure to counter the registration obligations of the foundation register is to establish the foundation abroad rather than domestically, e.g., in Liechtenstein or Austria. However, this measure is ineffective for existing foundations. After all, the relocation of a registered office abroad is considered by the German tax authorities to be a dissolution and re-establishment of the foundation for tax purposes.

This leads to significant inheritance and gift tax consequences. It is recommended that existing foundations request restrictions on access to the foundation register. This is particularly true if the foundation's statutes contain more detailed information about the foundation's assets. The extent to which the legislator will improve access rights or if a court will have to intervene is not yet foreseeable. However, it is likely that notaries' calendars for 2026 will fill up quickly.