Swiss Trust Company “Educational Series” (Part 2)
What Exactly is a Swiss Trust Company?
Swiss Trust Companies are sanctioned by Federal Tax Authority (Bern, Switzerland) and the Registrar in the Canton of incorporation. A Private Swiss Trust Company is a self-regulated privileged entity (not directly regulated by FINMA, which oversees banks and brokerages). The Swiss system for the establishment of Trust Companies is unique in that lawmakers deliberately prefer self-regulation, which does not relieve ownership of anti-money laundering (AML) obligations but does dramatically reduce red tape. After reaching certain levels an additional SRO (Self-Regulated Organization) SRO designation and membership will be required for the Trust Company. This is usually at the 10 client level or CHF10 million in managed assets.
Older Swiss Trust Companies (STCs) continue to be in demand. With this demand, however, has come an increase in information on the Internet which can be confusing and seemingly at times contradictory. It is after all the Internet, and anyone can post anything. The realities, nevertheless, of how an STC comes into existence and then becomes available for resale are not that complicated. We offer the following synopsis as a brief yet encompassing explanation.
To explain a Trust Company you must start with the concept of a “captive.” Captives are typically vehicles to bring critical financial functions in-house. Those functions could be insurance, banking or brokerage. These entities have been frequently misunderstood to be tax shelters but for citizens of nations with worldwide income tax, there are virtually no such benefits. (We always recommend that you consult with your tax professional) The universal benefits to owing a Swiss Trust Company are: 1) The authority to manage money 2) Cutting corporate costs 3) Control and preservation of business opportunity 4) Asset protection for ownership. By far, the primary advantage sought after by business owners is the ability to manage money. A Swiss Trust Company is an excellent alternative to private bank ownership. It will save you both time and money. As such, many of the functions associate with investing and moving capital can be brought under the control of the parent company.
A Swiss Trust Company is hybrid corporate entity that will likely have its origins as a Family Trust or an IBC (international business corporation) many years ago. Most are dormant, and the previous activities are of little or no consequences since there are no assets or liabilities. What is of importance is that at some point the entity went through a conversion to a Non-Banking Financial Institution. All Swiss Trust Companies are established by taking an older corporate entity, renaming it, changing the Articles of Association and then finally getting approval from the appropriate Swiss Canton. This is a very detailed process. Again, the previous activity has no bearing on the current capabilities of the entity, but the age of the entity is of importance in that it lends instant credibility to your institution. All Non-Banking and Banking Financial Entities throughout the world essentially follow a similar process and start initially as a corporation. It is important to note that this entity cannot be referred to as a bank; it is not a tax shelter nor is it a means to circumvent the banking laws of any country. It is, however, one of the fastest and most cost-effective alternatives available to entrepreneurs with international interests that need to bring vital financial functions in-house.
The cost range of Swiss Trust Companies is $45,000 to $150,000. The required initial investment outlay varies according to the age of the structure. As a rule of thumb, the older Trust Companies are more suitable for clients who wish to make it a working Non-Banking Financial entity. If a client, however, is looking to benefit from owning a Swiss Trust Company solely for asset protection, a younger company would be more fitting and thus require a smaller investment. A bearer share Swiss Trust Company is an excellent vehicle to protect assets and privacy.
A Swiss Trust Company is a unique entity. It brings together the culture of the Swiss in promoting self-regulation and privacy with a functioning entity that can be utilized for asset protection, estate planning or as an alternative to private bank ownership. STCs are also extremely inexpensive when compared to the time and money that would be spent elsewhere attempting to acquire either a bank or a trust company. All things considered, there may not be a comparable corporate structure in the world
If you are interested:
We will provide you with a true turnkey acquisition – this will include acquiring the company, Swiss administration and a legal retainer with a top law firm located in Zurich – all for one investment. Our intent is to save you both time and money when it comes to implementing a successful cross-border strategy. The Trust Company you choose will have been walked through a strict due-diligence process and is guaranteed to be free of any present or past debts or liabilities.
Zurich Office: +41-43-210-9667
Beverly Hills Office: +1-310-601-3115
Posted in: Miscellaneous, Swiss Trust Company, Uncategorized on May 26, 2016