Comparison Between The Forthcoming Private Wealth Foundation And The Philanthropic Foundation In Luxembourg

Many years after the introduction of the Philanthropic Foundation¹, the draft bill n° 6595 dated 22 July 2013 presents the private wealth foundation (the "Private Foundation"). Although the two vehicles share the same name of foundation, they actually serve very different purposes, which result in two specific set of distinct rules on their organization and legal framework.

This article was released in the Autumn edition of the Philanthropy Letter (Fondation de Luxembourg) and aims therefore at differentiating the respective characteristics of each kind of foundation and highlighting their compatibility.

Different purpose and different beneficiaries

According to the Draft Bill, the Private Foundation is a family estate planning vehicle: it principally aims at completing the range of wealth management instruments already in force.