Regulatory change brings even more transparency to doing business in Switzerland

Service providers in Switzerland must navigate new Swiss regulations governing trustee registration and continued tax information exchange; but increased transparency also brings fresh opportunities

With its political and economic stability, high living standards and low tax rates, Switzerland is the ideal place to do business. This year’s IMD World Competitiveness Ranking put Switzerland at the top of the list, dethroning Singapore. And recent legislation has made this already well-regulated jurisdiction even more transparent.

The new trust law, due to be published for consultation this summer following approval, will make it possible to settle a trust in Switzerland under Swiss law. To date, Swiss-based trustees have had to settle under foreign law – for example English.

And significant changes around regulation for trustees, registration, and information exchange in the past couple of years have led to increased transparency, which has affected and will continue to affect companies and individuals doing business in Switzerland.

Read on to learn how these changes will impact global business, and how to make the most of the new opportunities available.

Swiss trust law

The new law making it possible to settle a trust in Switzerland under Swiss law will most likely come into force in 2022-23, as a new tool for estate planning and wealth management.

Drafting of the Swiss Trust Law has been in progress – on and off – since 2009. The latest draft seems likely to be published for consultation in the summer of 2021. You can find out more about the introduction of trust law here.

New regulation for trustees

The ability to mine data across the world means that exchange of information is now widespread – something that would have been unthinkable 30 years ago. Transparency is part of this new world and it is here to stay.

Switzerland is a strict jurisdiction with regards to know-your-customer (KYC) and anti-money laundering (AML) regulation. One example is a new regulation for trustees which came into effect in 2020; all providers of trustee services are now subject to regulatory supervision and have to undergo a registration and regulation process.

Registration and regulation are now also required for providers of wealth management services. Previously this was not necessary when operating in Switzerland, so again transparency has increased.

The additional regulatory burden has seen some advisory businesses, particularly smaller ones, leave the market. Partnering with the right service provider can help you understand these complex regulations and navigate through change.

FATCA and CRS reporting

The Foreign Account Tax Compliance Act (FATCA) was introduced in the US in 2010; while the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS) was developed by the Organisation for Economic Co-operation and Development (OECD) in 2014. Part of a new global standard, CRS asks jurisdictions to gather and report information on their financial institutions.

Recent changes detail the account information that has to be exchanged and the due diligence required by financial organisations. Informing clients on the implications of this information exchange is an integrated part of our service offering.

Ultimate beneficial owners registration

Two-and-half years ago the fifth EU Money Laundering Directive came into force. Member states must now make their ultimate beneficial owners (UBO) registers publicly accessible. This had to be done by the start of last year.

Switzerland is not in the EU so public UBO registration is not legally required, but the information must be on record with service providers in a private capacity.

It is important that individuals and companies are aware of the EU directive, and while information held in Switzerland will not be published, it must be collected and kept on record privately.

A continued drive for transparency

Intertrust Group has been providing clients with tailor-made services in Switzerland for more than 40 years, with offices in Geneva, Zug and Zurich. As part of a publicly listed international group with a focus on financial services, we have always been heavily regulated, directly or indirectly.

We believe the drive for increased transparency offers new opportunities for ourselves and our clients. We understand how local rules affect legal and regulatory requirements and can guide clients through the changes.

We have multidisciplinary insight to assist with Corporate Client Services, Private Capital and Hedge Fund Services, Capital Markets and Private Wealth.

Our client base includes small, medium and large size multinationals, financial institutions and (ultra) high net worth individuals.

Our presence in Switzerland

We have recently moved Intertrust Group Geneva’s operations to Place des Alpes 4, 1201 Geneva. The new offices will help us to continue improving the quality of our services and grow our offering in a contemporary and comfortable environment.

The building is near the main railway station, lake and main hotels, within a highly attractive area of the city, with all its amenities.

All contact details for Intertrust Group Switzerland staff remain the same and all mail and couriers are being forwarded to our new address.

We look forward to continuing to deliver the highest quality of service to clients in this increasingly complex environment.

Why Intertrust Group Switzerland?

• We have more than 40 years of experience in Switzerland with offices in Zug, Zurich and new premises in Geneva
• A full range of expertise to assist with Corporate Client Services; incorporation, acquisition and restructuring; Private Capital & Hedge Fund Services; Capital Markets; Private Wealth; FATCA and CRS reporting; UBO registration
• Compliant with all the latest regulatory changes
• Our highly motivated and innovative workforce focuses on client solutions with access to a worldwide network of over 3,500 specialists in local and cross border business transactions.
• For more information on Intertrust Group Switzerland: https://www.intertrustgroup.com/locations/switzerland/