Establishing a endowment or trust: what do I need to know?
In Switzerland, compared to other countries, it is relatively easy to establish a trust. Trusts are regulated in accordance with Art. 80 ff. ZGB (Swiss Civil Law Code).
Establishing a trust
In order to form a trust, the dedication of assets for a specific purpose (which cannot be “contra bonos mores” or immoral) must be made. This must be outlined in a public deed. The trust is then formed as soon as this deed has been entered into the commercial register.
Legal provisions governing trusts can be found under Art. 80-89 of the Swiss Civil Law Code.
Generally, trusts are freed from tax burdens in Switzerland. This, however, prerequisites that the trust has been recognized as nonprofit. When this status has been recognized, the following taxes no longer apply: property tax, income tax, inheritance tax, gift tax and, normally, change-of-ownership tax.
In the case of a contribution to a trust, it is also possible to be freed of tax burdens. The exempt amount in the case of federal taxes is 20%.
In any case, an auditing authority is needed to carry this action out. The purpose can generally not be altered, thought there are some exemptions (Art. 86 ff. ZGB).
In general terms, the legal provisions governing trusts in Switzerland are very liberal, which makes them somewhat popular. Pensions generally choose this legal entity type for their company.
