The Swiss trust law has been a long time in the making. Since the ratification of the Hague Trust Convention in 2007 several attempts were made by interested parties to come to legislation on the proper Swiss trust; thus far unsuccessful. However, this may be (soon) changing.
With the 2007 ratification by Switzerland of the Hague Trust Convention, for the first time, trusts would be recognised as such in Switzerland. The chosen law of the trust would be accepted by Swiss courts. Besides, it was now possible to opt for Swiss jurisdiction. This was undoubtedly progress for Swiss-based trust practitioners such as Intertrust.
This did not mean, however, that there was such a 'thing' as the Swiss trust. As early as 2009/2010, attempts were made by members of parliament to come to a Swiss trust law (the Law). In 2015 a motion was introduced to review the possibility of a Law, but again no joy. In 2016 a member of parliament submitted an initiative promoting the introduction of the Law with success and in 2018/2019 the Swiss Parliament adopted the motion requesting the Swiss Federal Council to start the project of introducing the Law.
Where are we now?
Currently, an expert commission is reviewing the legal and regulatory framework. At the same time, an external group is conducting a regulatory impact assessment, which is expected to produce its report later this year.
The Law - What you need to know
First and foremost, with the introduction of the Law, it will become possible to settle a trust in Switzerland under Swiss law. Until such time, trusts 'in Switzerland' will be settled under a foreign law (e.g. English law).
Swiss trusts will most likely be of the type 'express' and used for wealth management and estate planning situations.
As the trust concept was established under common law it may prove difficult to convert the trust concept into Swiss law, which is a...