While Swiss law does not provide for trusts governed by domestic law, Switzerland recognizes trusts governed by the laws of other jurisdictions. For example, a Swiss trustee may serve as trustee of a trust governed by the law of Belize or the Cayman Islands, jurisdictions popular for asset protection planning due to their flexible and protective trust laws. Dominion consults with clients and their advisors regarding the best fit for governing trust law and accommodates customization of trust deeds according to individual client requirements.
Well-drafted foreign asset protection trusts can provide exceptional and effective asset protection for U.S. clients if two requirements are met. First, clients must not retain significant direct or indirect control over trust assets. Second, the foreign trustee must provide effective and convincing fiduciary oversight and governance, including proper U.S. tax accounting and reporting. Breaching either of these requirements may cause a U.S. court to find that a foreign asset protection trust is a sham.
Trusts settled by U.S residents for U.S beneficiaries are tax-neutral and transparent for U.S. income tax purposes during the lifetime of the settlor, with the income tax items (income, gains, credits, deductions, and losses) passing through to the U.S. settlor. Dominion’s services and recordkeeping tie in fully to our clients’ U.S. tax accounting services, streamlining proper reporting and compliance. In addition to administration, accounting, and bookkeeping, Dominion provides regular investment portfolio reviews, annual financial statements prepared in accordance with U.S. GAAP, IRS Form 3520-A reporting with foreign grantor trust owner and beneficiary statements, and information for other required tax filings.
In addition to asset protection advantages, many of Dominion’s clients seek the advantages of jurisdictional and geographic investment diversification, including insulation from local political events, economic cycles, market fluctuations, and financial crises. Switzerland offers many benefits for U.S. investors seeking such diversification:
- Political and economic stability
- Access to worldwide financial markets
- Access to worldwide currencies
- A high level of financial regulatory supervision
- High standards of confidentiality and privacy
- Exceptional Swiss client service.
Trusts administered in Dominion’s Geneva office provide a platform for achieving diversification superior to that which can be achieved solely via the U.S., along with effective fiduciary oversight and governance, including proper U.S. tax accounting and reporting, by Dominion’s regulated Swiss trust company.
Dominion has a specialist multi-jurisdictional High Net Worth Team, including U.S.-qualified lawyers and accountants, offering a compelling service for wealthy clients and families, including U.S. residents, who are keen to consider wealth planning structures using a variety of carefully constructed trust-based arrangements. Dominion does not provide tax, legal or investment advice and does not receive any revenue from funds held within client structures, ensuring Dominion always serves its clients’ best interests on a wholly independent basis.
Dominion’s Swiss trust company allows access to Tier-1 Swiss custodians, private banks, and wealth advisors. This access allows U.S. investors to book assets outside the U.S. with a full array of investment services, including access to the entire global securities market, trade execution in multiple global markets, sophisticated and personalized investment advisory services, specialized credit solutions, privileged access to private transactions, foreign exchange services and more.
The combination of Dominion’s exceptional fiduciary services, U.S. expertise, Swiss asset custody, competitive Swiss asset management fees, and Swiss courts’ recognition of trusts under the laws of other jurisdictions makes Switzerland one of the best choices of jurisdiction for a trustee and Dominion one of the best choices in Switzerland.
Written by Chris Riser, Director, United States
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