German SMEs Turn to Family Foundations for Succession and Tax Benefits

Foundations, once seen as tools for billionaires, are gaining interest among German medium-sized companies. Foundation adviser Sascha Drache says that owners with assets of around €500,000 – whether in real estate, company shares or capital – can benefit from establishing a foundation to secure wealth, plan succession and engage in strategic philanthropy. He notes that many businesses view a foundation as a way to combine estate planning with a lasting charitable purpose, rather than a luxury.

Tax specialist Andreas Sütterlin explains that family foundations enjoy low corporate tax rates (15% plus solidarity surcharge) and favorable treatment of capital gains (as low as 5%). Assets transferred to a foundation are insulated from personal ownership, allowing long‑term control while reducing inheritance and gift‑tax burdens. The approach also addresses the growing succession challenge in Germany, where a KfW monitoring study shows that 57 % of medium‑size owners were aged 55 or older in 2025, up from 20 % two decades earlier. Together, the experts highlight the blend of wealth preservation, tax optimisation and governance stability that is driving the foundation trend among German SMEs.