Trusts in Switzerland: recognition, trustees, taxation

Short answer

Switzerland has no trust law of its own, but recognises trusts under foreign law through the Hague Trust Convention, in force for Switzerland since 2007. Anyone acting as a professional trustee in Switzerland has needed a FINMA licence since the Financial Institutions Act. Banks record the parties to a trust using Form T; for AEOI purposes, the settlor, trustees, protector and beneficiaries count as controlling persons.

Recognition and choice of law

In Switzerland, trusts are assessed under the law chosen in the trust deed – often the law of Jersey, Guernsey, the Cayman Islands or a US state. The Hague Convention on the Law Applicable to Trusts and on their Recognition ensures that Swiss courts and authorities recognise these trusts.

In practice, this means that the trust deed, any letters of wishes and the trustee's resolutions are the authoritative documents. They must be complete and up to date.

Trustees in Switzerland

Since the Financial Institutions Act (FinIA), trustees acting professionally for third parties require a FINMA licence and are subject to ongoing supervision by a supervisory organisation. They also qualify as financial intermediaries under the Anti-Money Laundering Act and must identify and document the beneficial owners.

Who is recorded for a trust

For banks (Form T) and AEOI, the following are typically recorded:

• Settlor – even if deceased, for the origin of the assets.
• Trustee(s) – individuals or companies.
• Protector, if any.
• Beneficiaries – by name or as a class (for example «the descendants of the settlor»).
• Other persons with control, for example with rights to remove the trustee.

Taxation under Circular No. 30

Switzerland does not tax the trust itself, but attributes assets and income to the settlor or the beneficiaries. The basis is Circular No. 30 of the Swiss Tax Conference of 22 August 2007, which the Federal Tax Administration also applies to direct federal tax and withholding tax through its Circular No. 20 of 27 March 2008. It distinguishes three basic types:

• Revocable trust: assets and income continue to be attributed to the settlor.
• Irrevocable fixed interest trust: attribution to the beneficiaries with fixed entitlements.
• Irrevocable discretionary trust: if the settlor was resident in Switzerland when the trust was established, the assets continue to be attributed to them; otherwise they are attributed neither to the settlor nor to the beneficiaries, and distributions to Swiss-resident beneficiaries are in principle taxable as income.

No Swiss trust in sight

In 2022, the Federal Council put a preliminary draft for a trust in the Code of Obligations out for consultation. On 15 September 2023, it concluded that there is currently no sufficient political consensus for it – the tax rules in particular were rejected. Trusts under foreign law, recognised through the Hague Convention, therefore remain the route.

Trusts in FLIORE

In FLIORE, the trust is a mandate type of its own with all roles and their validity. Beneficiaries can be recorded individually or as a class; for AEOI, the controlling persons are pre-filled automatically based on their role. Assets held in companies under the trust are looked through.

At a glance

Terms on this page

Beneficial owner

The natural person who ultimately owns or controls a company, foundation or trust, or on whose behalf a transaction is carried out.

Forms A, K, S and T

Standardised forms used by Swiss banks to establish the beneficial owner: A in general, K for controlling persons, S for foundations and T for trusts.

FinIA (Switzerland)

Swiss act which, among other things, requires portfolio managers and trustees to obtain a licence from FINMA.

Protector

A person or body that supervises the trustee of a trust or the board of a foundation and holds certain consent rights.

Frequently asked questions

Sources

• Fedlex – Hague Trust Convention (SR 0.221.371)
• FINMA – portfolio managers and trustees
• HCCH – Hague Conference on Private International Law
• Swiss Tax Conference – Circular No. 30 «Taxation of trusts»
• Federal Office of Justice – introduction of a Swiss trust (in German)

This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.

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