Services · Trusts & private foundations

Trust in Switzerland

Open pricing. The final quote is fixed in writing before work starts.

The short answer: Switzerland has no trust of its own

The phrase Swiss trust rarely means what people think it means. Switzerland is a civil law country, and the trust does not exist in its civil code. It never did, and after the way the last legislative attempt ended, it will not appear any time soon. If someone offers to set up a trust governed by Swiss law, they are selling something that does not exist.

Trusts nevertheless work in Switzerland, hundreds of licensed firms administer them, Swiss banks open accounts for them and Swiss courts protect them in litigation. The structure is this: the trust itself is created under foreign law - most often Jersey, Guernsey or the Cayman Islands, sometimes English or Singapore law - while the trustee sits in Zurich, Geneva, Zug or Lugano and answers to Swiss financial regulation. The assets sit with a Swiss bank and a Swiss manager runs the investment mandate. The law of the trust and the location of the trustee are two different things, and that is exactly what gets lost in translation.

Below: what Swiss recognition actually delivers, why the Swiss trust bill collapsed, how trusts are taxed here, what the Federal Supreme Court settled at the end of 2024, and when Jersey or Liechtenstein beats Switzerland. The civil law alternative has its own page: private foundation in Switzerland.

What a Swiss trust really is

The legal basis is the Hague Convention on the Law Applicable to Trusts and on their Recognition, which entered into force for Switzerland on 1 July 2007. On the same date Articles 149a to 149e of the Federal Act on Private International Law and matching amendments to the debt enforcement and bankruptcy act came into effect, wiring the trust into Swiss procedure and enforcement.

The point of the Convention is that a country without its own trust law undertakes to recognise trusts validly created under another country's law, and not to recharacterise them into something domestic - an agency contract, a fiduciary arrangement, a conditional gift. Before 2007 Swiss courts offered no such certainty, which is precisely why wealthy families kept their trustees outside the country. Recognition turned the Swiss trustee into a normal working option.

The limits of that recognition matter. It is procedural and proprietary, not fiscal and not successoral.

Why the Swiss trust never happened

There was a serious attempt. Parliament instructed the government to introduce a trust into Swiss law, and on 12 January 2022 the Federal Council opened a public consultation on draft amendments to the Code of Obligations. The industry treated it as done.

Tax killed it. On 15 September 2023 the Federal Council announced that there was no sufficient political consensus for a Swiss trust and dropped the plan to send a bill to Parliament. The wording was blunt: the tax provisions had been clearly rejected in the consultation. The Council of States closed the underlying motion on 12 December 2023 and the National Council followed on 27 February 2024.

The fight was about how to tax a Swiss trust settled by a Swiss resident. The draft proposed genuine separation of the assets from the settlor; the cantons read that as a wealth tax escape route and blocked it. The irony is that the same restriction still governs foreign trusts, as the tax section below explains.

Where this leaves things in September 2026: the project is shelved with no revival in sight. Everything sold as a Swiss trust is a foreign trust with a Swiss trustee. Parliament moved instead towards liberalising the family foundation, which is a separate story.

Trustees under FINMA supervision

Since 1 January 2020 the Financial Institutions Act has required a FINMA licence to act as a professional trustee in Switzerland, with a three-year transition for existing firms that ran to the end of 2022. This is a case where regulation genuinely reshaped a market.

According to FINMA, as at 28 February 2025 it had approved 1,532 of the 1,864 applications filed by portfolio managers and trustees, and roughly 8% of applicants withdrew rather than wait for a decision. A number of small family shops simply left the business instead of meeting the requirements. Those that remain operate under continuous supervision.

What the licence stands for: capital and own funds requirements, fit and proper testing of management, a mandatory risk and compliance framework, independent audit, and ongoing supervision through an accredited supervisory organisation. For a client it means the trustee answers to a regulator as well as to the deed, and that the licence can be verified in FINMA's public register in a minute.

What we always check before signing: whether the licence is live and in what status; which supervisory organisation covers the trustee; whether professional indemnity cover exists and at what limit; what happens to the trust if the trust company changes owner or loses a key officer; and how the deed handles a change of trustee, so the family is not locked in forever. That last point is the one most people miss.

Tax: everything turns on where the settlor lived at settlement

A trust is not a taxpayer in Switzerland. Practice rests on two documents: circular No. 30 of the Swiss Tax Conference (2007) and the federal tax administration circular of 2008. The logic is simple - property cannot belong to nobody, so the assets and income of a trust are always attributed to someone, either the settlor or the beneficiaries.

The table carries the main message. If you are already a Swiss tax resident, a trust will not take assets out of your wealth tax base - the cantons look straight through it. Trusts work for people who set them up before moving: the pre-immigration trust, settled while the settlor was resident elsewhere and genuinely gave up control. On arrival in Switzerland that structure keeps its separateness, and it is one of the few arrangements that reliably does.

Gift and inheritance tax is cantonal. Direct descendants and spouses are exempt almost everywhere, unrelated recipients face rates that reach tens of percent in some cantons, and a few cantons levy no gift tax at all. Where the settlor was not Swiss resident when the assets were transferred and no Swiss real estate was involved, settlement is not a Swiss gift tax event even if the beneficiaries live in Switzerland.

One rule we never bend: obtain an advance ruling from the cantonal tax administration before assets move. It costs money and time, and it removes the single biggest risk - recharacterisation five years later, when nothing can be changed. For the wider picture see taxes in Switzerland.

Succession, forced heirship and transparency

On 16 December 2024 the Federal Supreme Court decided two questions that had been open since the Convention was ratified, and published the ruling as a leading case.

First: the assets of an irrevocable discretionary trust do not form part of the settlor's estate. That is confirmation of what everyone structuring succession through a trust had assumed, but which had no formal authority before 2024.

Second, and more consequential: conferring beneficiary status in an irrevocable discretionary trust qualifies as a lifetime gift. The direct consequence is that heirs entitled to a compulsory share can attack the trust through a claim for abatement, under the rules that apply to gifts. A trust does not switch off forced heirship; it moves the argument onto different ground and changes how the calculation runs. The Swiss succession reform in force since 2023 reduced the compulsory shares but did not abolish them.

The second layer is transparency. Parliament adopted the act on the transparency of legal entities on 26 September 2025, and the Federal Council set entry into force for 1 October 2026, alongside a revised anti money laundering act. It creates a central federal register of beneficial owners. The register is not public: access goes to authorities and obliged parties, not to anyone who asks. The obligations extend to trustees whose seat or residence is in Switzerland.

On top sits the automatic exchange of information: depending on its structure a trust reports as a financial institution or as a passive non financial entity, and data on the settlor, beneficiaries and protector flows to their countries of tax residence. In 2026 confidentiality means not being public. It does not mean being invisible to tax authorities, and anyone selling the second is selling yesterday.

Who a Swiss trust is wrong for

A Swiss resident hoping to cut wealth tax. It will not work: the assets of an irrevocable discretionary trust settled by a resident continue to be attributed to that resident.

Anyone unwilling to give up control. A trust rests on a real transfer of assets to the trustee. If the settlor keeps running the portfolio in practice, issues binding instructions and reserves the right to remove the trustee at will, the structure becomes a facade: tax authorities treat it as transparent, and creditors and heirs cut through it in court. A letter of wishes is called that because it does not bind.

Anyone with less than a few million. Switzerland is an expensive jurisdiction - trustee fees, bank charges, audit, lawyers. On a portfolio of a few hundred thousand the running costs eat the benefit, and the sensible conversation is about a will, a marital agreement and an insurance wrapper.

Anyone trying to hide assets from claims already on the table. Moving property into a trust on the eve of litigation or insolvency is challengeable under Swiss clawback rules, and recognition of the trust does not help.

Anyone whose beneficiaries live in countries hostile to trusts. Russia treats a trust as a foreign structure without legal personality with reporting duties for the controlling person; France, Spain and Italy each run their own aggressive regimes. A structure that is impeccable in Zurich can create a problem where the beneficiary lives.

What usually goes wrong in practice: the governing law is chosen out of habit rather than for the task; no tax ruling is obtained and the canton's position surfaces afterwards; a beneficiary relocates and the whole tax model collapses; the trustee declines to follow the family's wishes and it turns out the deed has no removal mechanism; the assets include an operating business, for which a trust is the wrong wrapper. All five are far cheaper to prevent than to unwind.

Switzerland, Jersey or Liechtenstein

Switzerland is chosen not for its trust law, which does not exist, but for infrastructure: banks, managers, the reputation of an onshore jurisdiction and proximity to a family that already lives here or is moving here. Without those reasons, cheaper and more flexible options exist.

These are meant to be combined: a Jersey law trust with a Swiss trustee and a Zurich account is a standard working configuration. More on the neighbours: Jersey trust, Guernsey trust, Liechtenstein trust and Liechtenstein private foundation. For the full range of forms see trusts and private foundations.

Fees

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees, trustee remuneration and bank tariffs are billed separately unless explicitly included.

FAQ