Trusts in Switzerland: how to choose a FINMA licensed trustee
Switzerland is one of the main places in the world where trusts are administered, yet it has no trust law of its own. That surprises many families and advisers. This guide explains how trusts work from a Swiss point of view, why the plan for a Swiss trust was dropped, what a FINMA licence means for a professional trustee, how to choose one, and when a Swiss family foundation may be the better tool.
Does Swiss law have trusts?
No. The Swiss Civil Code and the Swiss Code of Obligations do not create a trust. What Switzerland does is recognise trusts created under a foreign law, such as English, Jersey or Guernsey law. A trust set up properly under that foreign law is treated as a trust in Switzerland, with its assets kept separate from the trustee's own estate.
The legal basis is the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition. Switzerland ratified it in April 2007 and the Convention entered into force for Switzerland on 1 July 2007. In practice this means:
- the trust deed chooses the governing law, which is a foreign law;
- the trust can be administered from Switzerland by a Swiss trustee;
- Swiss courts and authorities recognise the trust and its effects.
Why there is still no Swiss trust
For several years Parliament discussed creating a trust under Swiss law. The Federal Council prepared a draft and ran a public consultation. The tax rules proposed in the draft met strong opposition, and the Federal Council decided not to go further. In January 2024 the Legal Affairs Committee of the National Council unanimously proposed to close the file, and Parliament followed.
Instead, Parliament chose to strengthen the Swiss family foundation (motion 22.4445), which is being turned into law. For a family that wants to plan its estate with a Swiss instrument, the foundation is therefore the route the legislator has preferred. A foreign-law trust administered from Switzerland remains fully possible.
Why a professional trustee needs a FINMA licence
Since the Financial Institutions Act (FinIA) came into force on 1 January 2020, anyone acting as a trustee on a professional basis in Switzerland must be authorised. FINMA states that trustees need a licence before they start their activity. Once licensed, the trustee is monitored day to day by a supervisory organisation approved by FINMA, which checks compliance with the financial market rules and the anti-money laundering rules.
For you as a settlor or beneficiary, this has three practical consequences:
- Organisation: a licensed trustee has had to show FINMA that it has qualified management, proper organisation and a supervisory organisation.
- Supervision: its activity is reviewed on an ongoing basis, not only once at the start.
- Transparency: FINMA publishes the list of licensed portfolio managers and trustees, so you can check a name yourself.
How to check that a trustee is licensed
Ask the trustee for the exact name of the legal entity that will act as trustee, then look for that name on the FINMA list. DealPME takes this official list and shows it in its directory of trustees, updated every month. Each entry shows the city, the canton and the supervisory organisation named by FINMA.
Be careful with groups: the brand you know may have several companies, and only one of them may hold the licence. The trust deed should name the licensed entity.
Choosing a trustee: the questions to ask
A licence is the minimum, not the whole answer. Before you sign a mandate, ask:
- Experience with your situation: family trusts, holding structures, real estate, art, operating companies. Ask for the type of structures they administer, not for client names.
- Governing law: which foreign laws they usually work with and which lawyers they use.
- People: who will actually handle your file, and how decisions are taken when the trustee has discretion.
- Fees: set-up fee, annual fee, time-based charges and costs of third parties. Ask for a written fee schedule.
- Banks and custody: where the assets will be held and who has signing powers.
- Exit: how the trustee can be replaced if the family's needs change.
If you also need a company in Switzerland, for example a holding owned by the trust, see our guide to setting up an SA or a Sàrl.
Trust or family foundation?
Both separate assets from the founder, but they work differently:
- Trust: governed by a foreign law, flexible, widely used by international families, administered by a trustee who holds the assets.
- Swiss family foundation: a Swiss legal entity with its own legal personality, registered in the commercial register. Its use for general maintenance purposes has long been restricted; Parliament has asked for this to be relaxed.
The right choice depends on where the family lives, the assets involved and the countries whose tax rules apply. This is a question for a specialist.
What about tax?
The Hague Convention deals with recognition, not with tax. How a trust is taxed in Switzerland depends mainly on the settlor and the beneficiaries and on whether the trust is revocable or irrevocable. The rules are technical and can change the result a great deal, so ask a tax adviser before you set up or move a trust.
The simple way to find a licensed trustee
You can browse the directory yourself, or describe your situation once on DealPME. Your request goes to up to three Swiss providers that match it, and they contact you directly. Your details are never published.
This guide is general information and does not replace legal or tax advice. Trust structures should always be reviewed by a qualified adviser.