Special Report: “The Unconventional Icon” (Part 3)
Swiss Trust Companies:
Why they might be the best corporate structure ever!
(Part Three of a Four Part Series)
- General Overview & Review (Part 1)
- Saves Time & Money (Part 2)
- Enhances Profile & Creates Profit (Part 3)
- Protects Against Lawsuits & Improves Privacy (Part 4)
- Part Three: “Enhances Profile & Creates Profit
Market Entry Strategies & Stability
When entering a foreign marketplace one of the most important decisions that a business owner will need to make is picking the correct legal structure for their enterprise. The profile, operational authority and professional associations will become a critical factor in deciding whether or not their venture is a success.
Welcome to Switzerland
Factors that contribute to this small nation’s ability to compete on the global scale:
- Social peace and political stability
- A leading economy with currency and price stability
- Highly professional international banks that focus on privacy
- First-rate infrastructure
- High productivity combined with high product and service quality
- First-class and world-renowned universities and technical institutes
Social Peace and Political Stability
Though relatively small, Switzerland has 6.7 million inhabitants. 16% of those living in Switzerland are foreign citizens, pointing to the cosmopolitan nature of the population. While the four national languages of Switzerland are German, French, Italian and Romansch, most professionals speak working English. Switzerland is one of the oldest democracies in the world, established in 1848. For the last thirty years, the federal executive has consisted of a coalition between the country’s main political parties, assuring balance, neutrality and free-enterprise.
A Leading Economy
Switzerland is internationally recognized as a premier banking center largely due to its strong foundation of freedom of trade and commerce, strong work ethics, technical knowledge and entrepreneurial talent. Economic development through the last few decades has been marked by strong growth against a background of low inflation, high capacity utilization, modern technology, high productivity and relatively high wages and salaries.
Banks that focus on privacy
Swiss banks have sustained a tradition of asset management and financial privacy for more than one hundred years. Emerging as a prominent global trend around the Second World War, Swiss banks now manage about one third of all privately invested assets worldwide. Two-thirds of this approximately US$1 trillion is from foreign investors. Swiss bank secrecy is the result of centuries of tradition, not just a current ploy to attract capital. Swiss government and financial regulators have worked to comply with international standards while maintaining the steadfastly private, free economy that made it a global player. Even with recent adaptations to accommodate the need for increased transparency, Switzerland still steadfastly protects individual’s right to privacy.
“There are always opportunities through which businessmen can profit handsomely if they will only recognize and seize them.” – Jean Paul Getty
“No profit grows where there is no pleasure taken” – William Shakespeare
Webster’s Dictionary defines profit as “the compensation accruing to entrepreneurs for the assumption of risk in a business enterprise”. More specifically, profit is the positive gain from an investment or business operation after subtracting for all expenses. The bottom line for every business endeavor is to make a profit; owning a Swiss Trust Company is no different. Private Trust Companies have the ability to bring high-net-worth individuals a full range of customized services, global investment opportunities and superior professional advice. It must be noted that no list of business options can be all encompassing. There will always be additional ways a Trust Company can profit based upon the owner’s background, personal associations and industry expertise.
Two major aspects to be considered that pertain to profit:
1) Operating expenditures
2) Specific services or products to offer potential clients
1) Lower Expenditures, Higher Profit Margins
Profits will always be the measure of a business’s success, and, as such, they should offer maximum margins. In terms of bottom line gains, nothing else can add so quickly or so substantially to its profits as a reduction in the overall cost of operations. A Swiss Trust Company offers an entrepreneur the opportunity to profit from his or her efforts and expertise with an extremely low outlay of capital. When compared with an alternative from another jurisdiction, expenditures are often at a rate of one fiftieth the required capital. Even during the initial acquisition phase, which is typically the most expensive, costs can be readily kept to a minimum.
Owning and operating a Private Trust Company can be cost efficient, flexible and uncomplicated. The entity will not have the “storefront” appearance that might normally be associated with domestic financial institutions. Gone are the marquees, lines, vaults and other retail administrative aspects, as well as, the expenses related to such items. The Private Trust Company uses clearing accounts with major international banking institutions for physical deposits and independent administrative firms for all other functions. In this manner, the owner is able to leverage time, meet fiduciary responsibilities and transact business while keeping expenditures to a minimum. As a result, the profit margin is much greater.
2) Services to Offer
One of the first and most important questions any entrepreneur should ask of themselves is, “What type of company do we want to be?” As previously discussed, complex financial needs of successful individuals and multinational corporations requires increased specialization. To avoid the pitfalls of trying to be all things to all people, the owner should be willing to target a specific, niche market. The following provides a glance at various services to present.
Services to Wealthy Individuals
Everyone markets to the wealthy yet few truly do so in a successful manner. The key is not only to offer an important service but to be seen as different from competitors. The ability to stand out from the crowd is the difference between success and failure. Few vehicles can make your operation more unique than owning an financial entity. Services that may be found the most attractive would include:
- Precious Coin Trading & Services
- International Credit Cards
- International Brokerage Services
- Trust Services
- Arbitrage & Currency Activities
- Precious Gem Trading & Services
- Portfolio Management
- Commodities Brokerage
Services to Multinational Corporations
Multinational corporations often have a multitude of unique needs that avoid precise definition. By offering services that larger institutions find too cumbersome, a profitable business can be pursued. The range of needed services would be very broad and technical and may include:
- Venture Capital
- International Loans
- Knowledge of Exchange Controls
- Offshore Labor Information
- Offshore Associations with Major Banks
- Access to International Mutual Funds
- Correspondent banking relationships
- Credit Card Processing
Switzerland has been and remains an outstanding business friendly location. Ownership of a Trust Company here is less expensive to establish and operate than alternatives and thus the profit potential is substantially greater. The ability to provide highly specialized services to wealthy individuals further increases the overall profit potential of private trust company owners. Please be aware that marketing with a Swiss Trust Company is likely to have many restrictions. Again, as always, it is essential to seek guidance from a professional in this industry prior to engaging in ownership.
Posted in: Miscellaneous, Swiss Trust Company, Uncategorized on March 8, 2013