A comparative legal study of the German spend-down foundation in relation to the Austrian and Liechtenstein spend-down foundations
Project Description
Due to the prolonged period of low interest rates, the spend-down foundation (Verbrauchsstiftung) has gained increased attractiveness in Germany, as it-unlike the traditional perpetual foundation-enables the planned consumption of the foundation's assets for the fulfilment of its purpose. While, under German foundation law, the consumption foundation constitutes a narrowly defined and highly regulated exception to the statutory archetype of the perpetual foundation and the principle of capital preservation, it is conceived as the standard model under Austrian private foundation law. Against this background, the dissertation examines the legal framework governing consumption foundations in Germany and Austria and compares it with the legal situation in Liechtenstein, with the objective of identifying similarities and differences between the respective foundation regimes and systematically analysing their practical implications. Methodically, the study is based on a comparative legal analysis of the relevant statutory provisions, case law, and legal scholarship. The analysis follows the life cycle of a foundation, with particular emphasis on the statutory limits of the founder's autonomy, the regulatory requirements governing the consumption of assets, and the applicable transparency and disclosure obligations. Special consideration is given to the German foundation law reform of 2023 (Federal Law Gazette 2021, Part I, No. 46 of 16 July 2021). The findings demonstrate that German law continues to be characterised by a higher degree of regulation even after the reform, whereas Austrian and Liechtenstein law afford greater flexibility and scope for individual structuring. The dissertation thus contributes to a deeper understanding of consumption foundations in the German-speaking legal sphere and provides impulses for the ongoing development of foundation law as well as for cross-border legal discourse.
