Trusts for cross-border families

The challenges facing cross-border families

Globalisation has profoundly transformed the profile of wealthy families. It is now common for a family to have members residing in three, four or five different countries, holding multiple nationalities and owning assets across several continents. This international dimension, while offering considerable opportunities, also creates challenges of increasing complexity.

Without appropriate structuring, cross-border families face risks of double taxation, conflicting succession laws, difficulties accessing banking services and multiple, sometimes contradictory, reporting obligations.

Specific cross-border issues

Cross-border families must navigate between multiple legal and tax systems, often incompatible with one another:

• Conflicts of succession laws: each country applies its own succession rules. The EU Succession Regulation (EU 650/2012) has simplified matters within the EU, but conflicts remain frequent with non-European jurisdictions. A trust offers predictability by subjecting assets to the law of its jurisdiction.
• Double taxation: income and capital gains generated by trust assets may be taxed in several countries simultaneously. Trust structuring must take account of bilateral tax treaties and available tax credits.
• Automatic exchange of information (CRS): the Common Reporting Standard requires financial institutions to report accounts of foreign taxpayers to the tax authorities of their country of residence. The trustee must identify the residence jurisdictions of all trust participants.
• Beneficiary mobility: members of cross-border families frequently change their country of residence, which alters the tax and regulatory implications of the trust. The structure must be sufficiently flexible to adapt.

Geneva: the ideal coordination hub

Geneva is the natural hub for international wealth management. The city brings together a unique concentration of expertise in trusts, international law, cross-border taxation and wealth management. It also provides direct access to major international banks and multilateral organisations.

As a Geneva-based, FINMA-licensed trustee, Swiss Trustee benefits from this exceptional ecosystem. We coordinate our work with a network of correspondents across major jurisdictions worldwide to ensure global compliance and coherent estate management.

Structures suited to cross-border families

The optimal structure depends on the family's geographic and financial footprint. Several approaches are commonly used:

• Single multi-beneficiary trust: one trust administered in Switzerland holds all the assets and distributes to beneficiaries in different countries. This simplifies governance but requires sophisticated tax management.
• Parallel trusts: several trusts in different jurisdictions, each tailored to local tax and regulatory specificities. More complex to administer but potentially more tax-efficient.
• Holding structure with umbrella trust: a trust holds a holding company that in turn holds subsidiaries in different countries. This combines operational flexibility with structural protection.

International compliance

Administering an international trust requires a thorough command of compliance standards in each jurisdiction. Swiss Trustee ensures adherence to CRS (Common Reporting Standard), FATCA (for American connections), anti-money laundering (AML) regulations in each country concerned and international sanctions. Our team implements rigorous due diligence processes and ongoing monitoring to guarantee seamless compliance across all jurisdictions involved.