Comparisons

Recognition of Foreign Trusts in Switzerland under the Hague Convention

By Hansruedi Mueller, Swiss foundation lawyer · Published 4 June 2026 · Last updated 4 June 2026

Switzerland recognises foreign trusts under the Hague Convention on the Law Applicable to Trusts and on their Recognition, an international treaty that has been in force in Switzerland since 1 July 2007. At the same time, Switzerland has no domestic trust law of its own: you cannot create a trust governed by Swiss substantive law. What you can do is set up a trust under a foreign law, English, Jersey or another common-law system, and have it recognised and given effect here.

For a civil-law country, that is a meaningful accommodation. The trust is a common-law creation with no native equivalent in Swiss law, yet trusts are used every day in Swiss banking, family-office and cross-border planning. The Convention bridges the gap. This guide explains what the Convention does, how recognition works in practice through the Federal Act on Private International Law and the debt-enforcement rules, and, just as important, what recognition cannot do.

Key takeaways

• The Hague Convention has been in force in Switzerland since 1 July 2007, placing the recognition of foreign trusts on a firm legal footing.
• Switzerland has no domestic trust law; a trust must be created under a chosen foreign law (such as English or Jersey law).
• Recognition runs through the Federal Act on Private International Law (PILA), Articles 149a–149e, and the Debt Enforcement and Bankruptcy Act (SchKG), Articles 284a–284b, which treat trust assets as a segregated fund.
• Recognition has limits: Swiss forced-heirship (reserved-share) rules, creditor protection and Lex Koller still apply, and trusts are taxed by look-through, not exempt.
• A recognised trust is a fiduciary relationship, not a Swiss legal person, unlike a Swiss foundation (Swiss Civil Code, Article 80).

What the Hague Trusts Convention is

The Hague Convention on the Law Applicable to Trusts and on their Recognition was concluded on 1 July 1985 under the Hague Conference on Private International Law. It does two things, and it is important to be precise about both.

First, it provides conflict-of-laws rules, that is, rules for deciding which law governs a particular trust. Under the Convention, a trust is governed by the law chosen by the settlor, or, where no valid choice has been made, by the law with which the trust is most closely connected.

Second, it sets a standard of recognition: a state bound by the Convention agrees to recognise, as a trust, an arrangement that is validly created under that governing law and that has the Convention’s core features, a separate fund, title held by or for the trustee, and the trustee’s duty to manage the assets for beneficiaries or a purpose.

What the Convention does not do is create substantive trust law. It does not give Switzerland a “Swiss trust”. It is a recognition instrument, not a trust statute. That distinction underpins everything that follows.

Switzerland’s ratification, in force since 1 July 2007

Switzerland signed the Convention on 3 April 2007 and ratified it on 26 April 2007. It entered into force for Switzerland on 1 July 2007. The Swiss Federal Office of Justice described the purpose plainly: to place the recognition of trusts on a firm foundation and to create legal certainty for arrangements that were already widely used in Swiss banking and corporate finance.

Hague Trusts Convention: The Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition entered into force in Switzerland on 1 July 2007. On the same date, Switzerland brought into force accompanying amendments to its Federal Act on Private International Law and its Debt Enforcement and Bankruptcy Act.

Ratification did not turn Switzerland into a trust jurisdiction. It made Switzerland a recognising jurisdiction, one where a foreign trust is given coherent legal effect, with predictable rules on governing law, jurisdiction and the treatment of trust assets.

No domestic trust law, but foreign trusts are recognised

This is the point most often misunderstood, so it is worth stating directly: there is no Swiss substantive trust law. You cannot draft a trust “under Swiss law”. A Swiss court will not apply a body of Swiss trust rules, because none exists.

Instead, you create a trust under a foreign law that does have a developed trust regime, commonly English or Jersey law, but any qualifying common-law system will do, and Switzerland recognises it. Recognition means, among other things, that:

• the trust fund is a separate fund, distinct from the trustee’s own assets;
• the trustee may act as trustee before Swiss notaries, registrars and courts, and may sue and be sued in that capacity; and
• the trustee’s personal creditors, spouse and heirs cannot reach the trust assets, because those assets are not the trustee’s own.

The governing law you choose continues to determine the trust’s internal workings, the trustee’s powers, the beneficiaries’ rights, whether the trust is revocable or discretionary. Switzerland supplies the framework of recognition around that foreign-law core.

One practical point flows from recognition but sits in financial-market law rather than the Convention itself: a person who acts as trustee on a commercial basis from Switzerland now needs a FINMA licence. Since the Financial Institutions Act (FinIA) came into force on 1 January 2020, Article 17(2) FinIA defines a regulated trustee as a person who, on a commercial basis, manages or holds a segregated fund on a fiduciary basis for the beneficiaries of a trust within the meaning of the Hague Convention, and brings that activity under FINMA supervision. So recognition tells you the trust works here; FinIA tells you that the professional trustee servicing it must be licensed.

How recognition works, PILA Articles 149a–149e and SchKG

To make recognition operate cleanly, Switzerland amended two federal statutes when the Convention took effect. Understanding the mechanics matters, because they are what give a trust practical traction here.

The Federal Act on Private International Law (PILA) gained a dedicated set of provisions for trusts, Articles 149a–149e:

• Article 149a anchors the applicable law in the Hague Convention, so Swiss courts use the Convention’s rules to decide which law governs the trust.
• Article 149b allows the parties to agree on the forum, a choice-of-court clause in the trust instrument is, in principle, respected for trust disputes.
• Article 149c sets the default jurisdiction where there is no valid choice, typically anchoring on the trustee’s seat or the trust’s administration in Switzerland.
• Article 149d deals with publicity: where a trustee holds assets entered in the land, ship or aircraft register, the trust relationship can be noted, so third parties are on notice that the asset is trust property.
• Article 149e governs the recognition and enforcement of foreign decisions in trust matters.

The Debt Enforcement and Bankruptcy Act (SchKG) gained Articles 284a–284b, which are the heart of the asset-protection effect. They confirm that trust assets constitute a separate fund (Sondervermögen), independent of the trustee’s personal estate. If a trustee becomes bankrupt or dies, the trust assets are segregated out of the trustee’s estate and held for the beneficiaries rather than distributed to the trustee’s own creditors or heirs. This segregation is what gives a recognised trust its insolvency-proof quality on the trustee side.

Read together, these provisions are why a foreign trust is not a legal curiosity in Switzerland but a workable structure: there is a clear rule on governing law, a clear forum, a way to make trust ownership visible on registers, and a guarantee that the fund stays separate.

The limits of recognition, forced heirship, creditors and tax

Recognition is real, but it is not unlimited. The Convention itself preserves the mandatory rules of the recognising state, and this is where Swiss law reasserts itself. Article 15 of the Convention expressly keeps in force provisions that cannot be set aside by private arrangement, including succession rights and, in particular, the reserved shares of protected heirs, the protection of creditors in insolvency, and the proprietary effects of marriage. Article 18 preserves the public-policy (ordre public) exception.

The most important limit for families is forced heirship. Swiss succession law guarantees certain close relatives a reserved portion (Pflichtteil in German, réserve héréditaire in French) of the estate. A settlor whose estate is governed by Swiss succession law cannot use a foreign trust to disinherit those protected heirs. Assets settled into a trust can be drawn back into the reckoning and subjected to reduction (Herabsetzung) to the extent needed to restore the reserved shares. Swiss Federal Supreme Court case law confirms that recognition of a trust does not defeat these claims.

Two further limits deserve a mention:

• Creditor protection. Transfers made to defeat existing creditors can be challenged and unwound under Swiss insolvency rules. Recognition does not legitimise a transfer designed to put assets beyond the reach of present creditors.
• Lex Koller. Switzerland’s restrictions on the acquisition of Swiss residential real estate by persons abroad continue to apply to trust structures.

On tax, Switzerland has no special trust regime. A trust is generally treated transparently, with income and assets attributed by look-through to the settlor or the beneficiaries depending on the type of trust and the residence of those involved, the approach set out in the 2007 circulars of the Swiss Tax Conference and the Federal Tax Administration. A trust is therefore not a Swiss tax shelter, and tax outcomes turn on personal facts. Internationally mobile families face particular complexity: see our guidance for UK residents and for US citizens and FATCA.

Foundation vs trust, what recognition means for your choice

Recognition explains how a foreign trust works in Switzerland. It does not make the trust a Swiss entity. A recognised trust remains a fiduciary relationship: the trustee holds legal title, the beneficiaries hold the benefit, and there is no separate legal person in between.

A Swiss foundation is the opposite in kind. Under the Swiss Civil Code, Article 80, a foundation is an autonomous legal entity with its own legal personality, it owns its assets directly, is recognised automatically as a Swiss entity, and is built to carry a fixed purpose across generations. Many families weighing the two structures are really choosing between a flexible, settlor-influenced relationship under a foreign law and a durable, supervised entity on Swiss soil. We compare them in depth in our guide to foundation versus trust for family asset protection, and the choice of jurisdiction itself can matter as much as the choice of structure, see our comparison of the best jurisdictions for family-foundation asset protection.

It is also worth correcting a common assumption: Switzerland is not about to introduce its own trust. A preliminary draft to create a Swiss domestic trust went to public consultation in January 2022 under a mandate from the Federal Council, but after significant criticism the project was not adopted. Parliament instead chose to strengthen the existing family foundation, adopting a motion to that effect on 27 February 2024, with reform legislation now in drafting. As of mid-2026, the position is unchanged: no Swiss trust law, foreign trusts recognised under the Hague Convention, and the foundation as the Swiss-law alternative.

If you hold, or are considering, a foreign trust with a Swiss connection, a Swiss-resident settlor or beneficiary, Swiss-based assets, or a Swiss trustee, our Zug-based team can assess how it will be recognised and taxed here, and whether a foundation would serve you better. Book a consultation or speak to a Swiss foundation lawyer.

Frequently asked questions

Does Switzerland recognise foreign trusts? Yes. Switzerland recognises trusts validly created under a foreign law through the Hague Convention on the Law Applicable to Trusts and on their Recognition, which has been in force in Switzerland since 1 July 2007. Recognition is implemented through Articles 149a–149e of the Federal Act on Private International Law and Articles 284a–284b of the Debt Enforcement and Bankruptcy Act, which treat trust assets as a segregated fund.

When did the Hague Trust Convention enter into force in Switzerland? Switzerland signed the Convention on 3 April 2007, ratified it on 26 April 2007, and it entered into force for Switzerland on 1 July 2007. On the same date, accompanying amendments to the Federal Act on Private International Law and the Debt Enforcement and Bankruptcy Act took effect.

Does Switzerland have its own trust law? No. Switzerland has no domestic trust law, so a trust cannot be governed by Swiss substantive law. A trust must be created under a foreign law, such as English or Jersey law, and is then recognised in Switzerland under the Hague Convention. A draft to introduce a Swiss domestic trust went to consultation in 2022 but was not adopted.

Can a foreign trust override Swiss forced-heirship rules? No. Recognition does not displace Swiss mandatory rules. Where Swiss succession law applies, protected heirs keep their reserved portion (Pflichtteil / réserve héréditaire), and assets placed in a trust can be subject to reduction (Herabsetzung) to restore those reserved shares. Swiss Federal Supreme Court case law confirms that a trust cannot be used to defeat forced-heirship claims.

Are trust assets protected if the trustee goes bankrupt? Yes. Under Articles 284a–284b of the Debt Enforcement and Bankruptcy Act, trust assets form a separate fund (Sondervermögen), independent of the trustee’s personal estate. If the trustee becomes bankrupt or dies, the trust assets are segregated and held for the beneficiaries, rather than passing to the trustee’s own creditors or heirs.

Does a professional trustee need a FINMA licence to operate in Switzerland? Yes. Since the Financial Institutions Act (FinIA) entered into force on 1 January 2020, Article 17(2) FinIA defines a regulated trustee as anyone who, on a commercial basis, manages or holds a segregated fund on a fiduciary basis for the beneficiaries of a Hague Convention trust. That activity requires a FINMA licence and oversight by a recognised supervisory organisation. A trustee acting purely in a personal, non-commercial capacity is not caught by this requirement, but anyone providing trustee services to clients on a professional or repeated basis will be.

How are foreign trusts taxed in Switzerland? Switzerland has no special trust tax regime. A trust is treated transparently, with income and assets attributed by look-through to the settlor or the beneficiaries depending on the type of trust and where those individuals are resident, the approach set out in the 2007 circulars of the Swiss Tax Conference and the Federal Tax Administration. A trust is therefore not a Swiss tax shelter, and a settlor or beneficiary who is resident in Switzerland will generally be taxed on attributed trust income and assets under ordinary Swiss rules.

What law governs the internal workings of a foreign trust recognised in Switzerland? The governing law is determined by the Hague Convention’s conflict-of-laws rules: first, the law chosen by the settlor in the trust instrument; where no valid choice has been made, the law with which the trust is most closely connected, assessed by reference to the place of administration, the trustee’s seat, and the location of the assets. That chosen foreign law, commonly English or Jersey law, continues to govern the trustee’s powers, the beneficiaries’ rights, and whether the trust is revocable or discretionary. Switzerland supplies the framework of recognition around that foreign-law core; it does not replace it.

Can a trust hold Swiss real estate, and does Lex Koller apply? A trust can hold Swiss real estate in principle, but Switzerland’s restrictions on the acquisition of residential real estate by persons abroad, known as Lex Koller, continue to apply to trust structures. Whether a particular acquisition is restricted turns on the beneficial ownership analysis: if the beneficiaries are non-residents, the transaction may require authorisation or may be prohibited. PILA Article 149d allows the trust relationship to be noted on the land register, giving third parties notice that the property is trust property, but this notation does not exempt the acquisition from Lex Koller scrutiny.

Is a recognised foreign trust the same as a Swiss legal entity? No. A recognised trust remains a fiduciary relationship, the trustee holds legal title, the beneficiaries hold the beneficial interest, and there is no separate legal person in between. By contrast, a Swiss foundation established under ZGB Article 80 is an autonomous legal entity with its own legal personality: it owns its assets directly, can sue and be sued, and is recognised automatically as a Swiss entity. Recognition under the Hague Convention is a meaningful legal accommodation, but it does not transform a trust into a Swiss-law person.

Which jurisdictions’ trust laws are most commonly chosen for trusts recognised in Switzerland? English law and Jersey law are the most commonly chosen governing laws for trusts used in Swiss cross-border planning, because both jurisdictions have well-developed, predictable trust statutes, an established body of case law, and experienced professional trustee industries. Other British Overseas Territories such as the Cayman Islands, Guernsey and the British Virgin Islands are also frequently used. The key requirement under the Hague Convention is that the chosen law recognises the concept of a trust with the Convention’s core features: a separate fund, title held by or for the trustee, and a duty to manage for beneficiaries.

Will Switzerland introduce its own domestic trust law? Not in the foreseeable future. A preliminary draft to create a Swiss domestic trust law went to public consultation in January 2022 under a Federal Council mandate, but after significant criticism, chiefly of the proposed tax treatment, the project was not adopted. The relevant parliamentary committee endorsed writing it off in late 2023. Parliament instead chose to strengthen the existing family foundation, adopting a motion to that effect on 27 February 2024, with reform legislation now in drafting. As of mid-2026, there is still no Swiss trust law, and the position is not expected to change in the current legislative cycle.

What is the difference between PILA Articles 149a–149e and the Hague Convention itself? The Hague Convention is the international treaty that provides the conflict-of-laws rules and the standard of recognition; it creates obligations for Switzerland at the level of international law. PILA Articles 149a–149e are the domestic Swiss implementing provisions that translate those obligations into Swiss private international law: they specify the applicable law (anchored in the Convention), jurisdiction, the registration of trust interests on Swiss registers, and the recognition of foreign court decisions in trust matters. The two instruments work together, the Convention sets the obligation, and the PILA articles provide the procedural and jurisdictional machinery to give it practical effect in Swiss courts.

This article is general information and not a substitute for formal legal advice. Tax and legal outcomes depend on your personal circumstances. Please contact us for advice on your specific case.

Sources

• Hague Conference on Private International Law (HCCH), Convention No. 30, “Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition”, status table (Switzerland: signed 3 April 2007, ratified 26 April 2007, in force 1 July 2007) and full text (Articles 6, 7, 11, 15, 18), hcch.net.
• Swiss Federal Office of Justice (Bundesamt für Justiz), “Trust” ratification page: Convention in force 1 July 2007; Switzerland has no domestic trust law; the Federal Act on Private International Law and the Debt Enforcement and Bankruptcy Act amended, bj.admin.ch.
• Federal Act on Private International Law (PILA / IPRG), SR 291, Articles 149a–149e, applicable law (Hague Convention), jurisdiction, publicity/registration and recognition of foreign decisions, Fedlex (SR 291); structure corroborated via swissrights.ch and Mondaq, “Treatment of Trusts in Switzerland”.
• Debt Enforcement and Bankruptcy Act (SchKG), Articles 284a–284b, trust assets as a separate fund (Sondervermögen), University of Zurich (N. Peter / D. Hess), “Aspects of Trust Litigation in Switzerland”; Mondaq, “Treatment of Trusts in Switzerland”.
• Swiss trustee licensing, since the Financial Institutions Act (FinIA) entered into force on 1 January 2020, Article 17(2) FinIA brings commercial trustees (managing/holding a segregated fund on a fiduciary basis for the beneficiaries of a Hague-Convention trust) under FINMA supervision, FINMA, “Trustees”; Homburger, “Financial Services Regulation 2025, Switzerland”; Pestalozzi / LALIVE, “New Trustee Regulation in Switzerland”.
• Limits of recognition (Hague Convention Articles 15 and 18; forced heirship / reserved shares; creditor protection; Lex Koller), Chambers, “Private Wealth, Switzerland”; Wenger Plattner, “Trusts in Swiss estates”; Lexology, “Spotlight: wealth structuring and regulation in Switzerland”.
• Swiss tax treatment of trusts, transparent / look-through to settlor or beneficiary; 2007 circulars of the Swiss Tax Conference and the Federal Tax Administration, Mondaq; Lexology; STEP.
• No Swiss domestic trust law, 2022 consultation draft not adopted; family-foundation reform motion adopted by Parliament on 27 February 2024, STEP, “Switzerland launches consultation on new trust law”; PwC Switzerland; Loyens & Loeff; Kendris.