Background

Switzerland, a country with a long history, is one of the strongest financial centres of the world providing an innovative, stable and secure framework which enables wealth owners to place their assets with a high degree of comfort and confidence.

The Swiss financial sector contributes approximately 9% of GDP and is therefore an important pillar of the country’s economy. The country enjoys an AAA rating by Standard & Poor’s continuously since 1989 and boasts of an unparalleled international reputation.

Statutory framework

The statutory framework in respect of companies and foundations consists primarily of the Swiss Code of Obligations (Obligationenrecht) and the Swiss Civil Code (Zivilgesetzbuch).

As an important administrative centre for trusts, Switzerland ratified the Hague Convention in 2007, thereby recognising the concept of trusts. However, since Switzerland does not yet have specific trust laws, it means that settlors may choose to have their trusts administered in Switzerland by a Swiss trustee but cannot elect to have the proper law of the trust settlement to be governed by Swiss law.

The due diligence and regulatory obligations of the financial intermediaries (including fiduciary services providers such as trustees) are set out in the Swiss Money Laundering Act (Geldwäschereigesetz) and, with effect from 1 January 2020, the regulatory regime for financial intermediaries will tighten further with the Federal Act on Financial Institutions (Finanzdienstleistungsgesetz) which will set out additional rules and regulations applicable to financial institutions.