Two Case Studies: Swiss Trust Company Operations

By Jeff Corbett

This month we wanted to provide you two specific examples of business problems solved via obtaining ownership of a Swiss Trust Company. Obviously, we are restricted by this format as to the amount of detail we can offer. Hopefully, however, this information will help you with the creative process as you consider your own business needs. Therefore, we are please to offer the following case studies for your perusal:

Case Study #1

Industry: Import / Export
Industry Overview: Every importing or exporting business is different. Each deals with different products from different parts of the world. What is universal is the need for a prestigious business beachhead with a strong banking infrastructure. This is critical to developing and maintaining solid contacts and strong relationships with reliable suppliers.

Client Problem(s) to be solved:

  1. Privacy from competitors
  2. Keep the buyer and seller separated for fear of circumvention – client has had problems enforcing non-circumvention / nondisclosure agreements internationally.
  3. Offer an eventual exit strategy.
    Additional Notes: Client needs to place profits from their import / export business in an entity that is in a prestigious jurisdiction which also has strong financial infrastructure.Privacy is critical to their business plan since they desire to reinvest profits in other projects which are sensitive to competition. They need a business structure that is flexible enough to address their current privacy needs but yet potentially go public as an exit strategy once their business model is fully developed.

How Solved: Client acquired a 35 year old Swiss Trust Company which immediately opened corresponding bank accounts with two separate major banks in Switzerland and Germany. The Swiss privacy laws and the fact that the Trust Company was issued in bearer shares addressed their need for privacy. The age and structure of the Trust Company provides the perfect long term investment into a structure that will be able to go public when an exit strategy is desired by ownership.

Case Study #2

Industry: Mining
Industry Overview: Mining companies continue to face some major challenges in order to achieve sustainable growth. Volatile commodity prices, rising operational costs and increasing environmental controls have become the norm resulting in a direct hit to the bottom line. Political uncertainty and a shortage of skilled workers remains an issue in developing nations. Post global economic crisis – monetizing verifiable assets has become extremely challenging.

Client Problem(s) to be solved:

  1. Gain more control over their banking relationships. They wish to acquire a captive financial institution to build long-term banking relationships with major banks. At one point in time,they explored starting a captive bank but saw it as too expensive and too long a process.
  2. Obtain collateralization of mining assets for business expansion.
  3. Gain asset protection for business and personal assets.
    Additional Notes: Client needs a vehicle for collateralizing gold bullion. Proceeds from the loans will be returned to the captive entity for funding additional properties in the United States and Canada. Personal and business assets are intertwined and because of rising incidents of litigation – asset protection is a must.

How Solved: After again exploring the captive bank option it was determined that a Swiss Trust Company (STC) would be a better alternative which would save time and money. The STC was targeted and acquired. The bank option would have taken 18 months to 2 years and required a minimum paid-in-capital of $1 million dollars. The Swiss Trust Company strategy provided a solution that could be immediately implemented (within days) and act as a Non-Banking Financial Institution which would significantly enhance their overall corporate profile. Thus,the client would have their captive institution in place for greater control, gain asset protection and be able to develop their overall business plan. It was projected that the Trust Company would

establish correspondent banking relationships which would leverage against the assets of a Trust Company for business expansion needs. In addition, the Trust Company would function as a fiduciary and offering investment services and implement asset protection techniques for the benefit of its clients.

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Privacy; a Necessity not a Luxury
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