Comparisons

Swiss Trust Law: Status, Alternatives & Why Foundations Are Used Instead

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

Switzerland has no domestic trust law. You cannot create a trust governed by Swiss substantive law, because the trust is a common-law institution with no equivalent in the Swiss Civil Code. What Switzerland does is recognise trusts set up under a foreign law, through the Hague Convention. A serious attempt to introduce a home-grown Swiss trust went to public consultation in 2022, but it was dropped in 2023, and as of 2026 there is still no Swiss trust statute. For families and entrepreneurs who want an onshore Swiss structure, the practical answer is the Swiss foundation.

This guide sets out the status precisely: what a trust is, why Switzerland never adopted one of its own, what happened to the 2022 draft, and why the foundation, now being further liberalised by Parliament, is the structure people use instead. It is written for readers weighing “Swiss trust versus foundation” and trying to understand what is actually available under Swiss law.

Key takeaways

• There is no domestic Swiss trust law. A trust cannot be governed by Swiss substantive law; Switzerland is a civil-law country with no native trust concept.
• Switzerland recognises foreign trusts (created under English, Jersey or another common-law system) through the Hague Convention, in force here since 1 July 2007.
• A draft to introduce a Swiss trust went to consultation on 12 January 2022. After heavy criticism, chiefly on tax, the Federal Council decided on 15 September 2023 not to proceed and asked Parliament to drop the project. As of 2026 it remains shelved.
• Instead, Parliament chose to strengthen the family foundation (Familienstiftung), motion 22.4445, adopted in 2023–2024 and now being turned into law.
• The Swiss foundation (Swiss Civil Code, Article 80) is the onshore alternative: an autonomous legal entity, not a fiduciary relationship.
• Acting as a trustee commercially from Switzerland requires a FINMA licence under Article 17(2) of the Financial Institutions Act (FinIA), in force since 1 January 2020.

What is a trust?

A trust is a creation of common law. A settlor transfers assets to a trustee, who takes legal title and holds and manages those assets for the benefit of beneficiaries, or for a defined purpose. The trustee owns the assets in law but must deal with them only in the beneficiaries’ interest; the beneficiaries hold the beneficial interest. A trust is therefore a relationship, not a separate legal person. There is no entity that “is” the trust and owns the assets in its own name.

That structure is second nature in England, Jersey and other common-law jurisdictions. It has no direct counterpart in civil-law systems such as Switzerland’s, where ownership is unitary and the split between legal and beneficial title does not naturally exist. This is the root of everything that follows: a trust is simply not a Swiss-law concept.

Does Switzerland have its own trust law?

No. Switzerland does not have a domestic trust law, and a trust cannot be drafted “under Swiss law”. A Swiss court has no body of Swiss trust rules to apply, because none has ever been enacted. If you want to use a trust, you create it under a foreign governing law that does have a developed trust regime, commonly English or Jersey law, and then rely on Switzerland to recognise it.

This surprises people who hear that trusts are widely used in Swiss banking and family-office practice. They are, but they are always foreign trusts. The distinction is between a Swiss trust (which does not exist) and a foreign trust with a Swiss connection (common and fully workable). The rest of this guide keeps that line clear.

Foreign trusts are recognised, the Hague Convention

Switzerland recognises foreign trusts under the Hague Convention on the Law Applicable to Trusts and on their Recognition, an international treaty in force here since 1 July 2007. Recognition is built into Swiss law through the Federal Act on Private International Law (PILA), Articles 149a–149e, and through the Debt Enforcement and Bankruptcy Act (SchKG), Articles 284a–284b, which treat the trust fund as a separate fund (Sondervermögen) kept apart from the trustee’s own estate.

In short, a trust set up under English or Jersey law can be given coherent legal effect in Switzerland: a Swiss court applies the chosen governing law, the trustee can act before Swiss notaries and registries, and the trust assets are protected from the trustee’s personal creditors. Recognition has limits, though, Swiss forced-heirship (reserved-share) rules, creditor protection and Lex Koller still apply, and trusts are taxed by look-through rather than exempt. We explain the mechanics and limits in detail in our guide to the recognition of foreign trusts under the Hague Convention. The point for this page is narrower: recognising a foreign trust is not the same as having a Swiss trust.

The 2022 Swiss-trust draft, and why it stalled

For several years it looked as though Switzerland might finally create a domestic trust of its own. It did not. Here is what happened, and why.

What the draft proposed

The project began with parliamentary motion 18.3383, “Introduction of trusts into the Swiss legal system”, which instructed the government to prepare legislation. On 12 January 2022, the Federal Council opened a public consultation on a preliminary draft. The plan was to add trust rules to the Swiss Code of Obligations and to enact an accompanying tax framework for how Swiss trusts and their parties would be taxed. The consultation ran until the end of June 2022.

Why it failed

The consultation responses were largely negative, and the sticking point was tax. Business and tax organisations took the view that the proposed tax treatment would make a Swiss trust unattractive and legally uncertain; some commentators argued the proposed regime sat uneasily with constitutional tax principles such as legality and ability to pay. The Federal Council concluded that it would be politically impossible to introduce a trust into Swiss substantive law without first agreeing a workable, certain tax regime, and no such consensus existed.

So on 15 September 2023, the Federal Council decided not to draft a dispatch to Parliament and instead recommended that Parliament write off motion 18.3383. In November 2023, the Legal Affairs Committee of the Council of States supported writing off the motion. The Swiss-trust project was, in effect, abandoned.

As of 2026, the position is settled and unchanged: Switzerland has no domestic trust, and no revived Swiss-trust bill is in progress.

The Swiss alternative: the foundation

When the trust idea was dropped, the policy energy did not disappear, it shifted to the structure Switzerland already has: the foundation (Stiftung). Under Swiss Civil Code, Article 80, a foundation is an autonomous legal entity in which assets are irrevocably dedicated to a defined purpose. Unlike a trust, it is a legal person: it owns its assets directly, has no owners (only beneficiaries and a purpose), and is recognised automatically as a Swiss entity. For many families weighing a trust, the foundation delivers the same goals, multi-generational asset holding, succession, governance, through a durable Swiss entity rather than a foreign-law relationship.

Swiss Civil Code, Article 80: A foundation is established by the dedication of assets to a particular purpose. It is an autonomous legal entity with its own legal personality, the cornerstone of the Swiss foundation, and the reason it serves as the onshore alternative to a trust.

The family foundation and reform (motion 22.4445)

The closest functional cousin of a private family trust is the Swiss family foundation (Familienstiftung) under Swiss Civil Code, Article 335. Historically its use has been narrow: Swiss law has prohibited “maintenance foundations” that simply provide for relatives’ general upkeep. That restriction is now being lifted.

Motion 22.4445, tabled on 15 December 2022 by Councillor of States Thierry Burkart, “Strengthen the Swiss family foundation. Lift the ban on maintenance foundations”, asked the government to liberalise the family foundation so that family assets can be passed on and family members supported more freely. The Federal Council initially recommended rejecting it, but Parliament adopted it (Council of States on 12 December 2023; National Council on 27 February 2024). The motion is now with the Federal Council for implementation, and the legislative work continues into 2026.

In other words, Switzerland’s answer to “should we have a trust?” was effectively “no, we will make our family foundation more flexible instead”. We cover the changes in our guide to the family foundation reform and what it opens up, and explain the structure itself in our Swiss family foundation definition and set-up guide. The reform is not yet enacted, so the precise final rules remain to be confirmed, we do not promise specific outcomes ahead of the legislation.

Trustee regulation in Switzerland, FinIA Article 17(2)

Even though Switzerland has no trust of its own, it does regulate the people who service foreign trusts from Swiss soil. Since the Financial Institutions Act (FinIA) came into force on 1 January 2020, anyone acting as a trustee on a commercial basis in or from Switzerland must hold a FINMA licence and is subject to prudential supervision.

FinIA, Article 17(2): A trustee is 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 on the Law Applicable to Trusts and on their Recognition. Such trustees require authorisation from FINMA.

The regime came with a transitional period: trustees already operating before 1 January 2020 had until 31 December 2022 to apply (FINMA recommended affiliating with a supervisory organisation by 30 June 2022), and Parliament deliberately did not grandfather existing operators. By early 2025, FINMA had granted the large majority of the roughly 1,700 trustee and portfolio-manager licences applied for. The practical takeaway: a foreign trust can be recognised and serviced here, but the professional trustee servicing it must be licensed.

Swiss trust vs Swiss foundation, which to use

Because there is no Swiss trust, the real choice for an onshore Swiss structure is between using a foreign trust (recognised here) and establishing a Swiss foundation. They differ in kind, not just in detail.

Neither structure is a tax shelter, and the right answer depends on your family, your assets and where everyone is resident. We set out the full head-to-head, control, privacy, asset protection, cost and tax, in our pillar guide to the foundation versus trust comparison for family asset protection.

If you hold a foreign trust with a Swiss connection, or you are deciding between a trust and a Swiss foundation, our Zug-based team can advise on what works under current Swiss law. Book a consultation or speak to a Swiss foundation lawyer.

Frequently asked questions

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, in force here since 1 July 2007.

Can you set up a trust in Switzerland? You cannot set up a Swiss-law trust, because no such law exists. You can establish a trust under a foreign governing law and have it recognised and administered in Switzerland, often with a FINMA-licensed Swiss trustee. For an onshore Swiss-law structure, most people use a foundation instead.

Why was the Swiss trust law rejected? The preliminary draft went to consultation in January 2022 and was met with substantial criticism, mainly over its proposed tax treatment, which respondents considered unattractive and legally uncertain. On 15 September 2023 the Federal Council decided not to proceed and recommended that Parliament write off the project. As of 2026 it remains shelved.

What is Switzerland doing instead of a trust? Rather than create a trust, Parliament chose to strengthen the family foundation. Motion 22.4445 (the Burkart motion), adopted in 2023–2024, asks the government to lift the ban on maintenance family foundations and make the Familienstiftung more flexible. The implementing legislation is still in progress.

How are foreign trusts taxed in Switzerland? Switzerland has no special trust tax regime. A foreign 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 where the parties are resident. Outcomes turn on personal facts, so trust taxation should always be assessed case by case.

Do I need a licence to act as a trustee in Switzerland? Yes, if you act on a commercial basis. Under Article 17(2) of the Financial Institutions Act (FinIA), in force since 1 January 2020, a commercial trustee servicing a trust (within the meaning of the Hague Convention) needs a FINMA licence and is subject to supervision.

Is it possible to create a trust under Swiss law today? No. As of 2026, there is no Swiss substantive trust law and no trust statute has been enacted or is in progress. Any trust you wish to use with a Swiss connection must be created under a foreign governing law, such as English or Jersey law, and then recognised in Switzerland under the Hague Convention.

When did the Hague Convention on trusts come into force in Switzerland? The Hague Convention on the Law Applicable to Trusts and on their Recognition came into force in Switzerland on 1 July 2007. Its domestic implementation is found in the Federal Act on Private International Law (PILA), Articles 149a–149e, and in the Debt Enforcement and Bankruptcy Act (SchKG), Articles 284a–284b, which protect the trust fund as a separate fund from the trustee’s personal estate.

What was the parliamentary motion behind the 2022 Swiss-trust draft? The project originated with parliamentary motion 18.3383, “Introduction of trusts into the Swiss legal system”, which instructed the Federal Council to prepare legislation. The Federal Council opened a public consultation on a preliminary draft on 12 January 2022, but after the majority of responses rejected it on tax grounds, the Federal Council decided on 15 September 2023 not to proceed and recommended that Parliament write off the motion.

Why is a Swiss foundation described as fundamentally different from a trust? A trust is a fiduciary relationship, not a legal person: the trustee holds legal title to the assets, and the trust itself has no independent legal personality. A Swiss foundation, by contrast, is an autonomous legal entity under the Swiss Civil Code, Article 80, it owns its assets directly, has its own legal personality, and is automatically recognised as a Swiss entity. This difference in legal structure affects everything from asset protection to supervision and succession planning.

Does a family foundation in Switzerland let me disinherit my heirs? No. Swiss forced-heirship rules (the reserved-share provisions of the Swiss Civil Code) continue to apply regardless of whether assets are held in a foundation. Assets transferred to a foundation may be challenged as an impairment of the reserved share (Pflichtteil) if the transfer occurs within a certain period before death. Foundation structuring must therefore account for Swiss succession law from the outset.

What is motion 22.4445 and what does it change for Swiss family foundations? Motion 22.4445, tabled by Councillor of States Thierry Burkart on 15 December 2022 and adopted by Parliament (Council of States on 12 December 2023; National Council on 27 February 2024), asks the government to lift the prohibition on maintenance family foundations and make the Familienstiftung more flexible. Once the implementing legislation is enacted, family foundations will be able to support relatives more broadly than current law allows. The reform is not yet in force, so the precise final rules are still to be confirmed.

Can a foreign trust hold Swiss real estate? In principle yes, but with significant constraints. Foreign nationals, and trusts are generally treated as foreign persons, are subject to the Lex Koller restrictions on acquiring residential real estate in Switzerland. The trust assets are also not shielded from Swiss taxes: income and capital are attributed to the settlor or beneficiaries by look-through. A Swiss foundation that qualifies for tax exemption may offer a more straightforward route for holding Swiss property in certain cases.

How is a Swiss foundation supervised compared with a foreign trust used in Switzerland? A Swiss foundation is supervised by the Federal Supervisory Authority for Foundations (ESA) or the relevant cantonal authority, which monitors compliance with the foundation’s purpose and proper governance. A foreign trust used in Switzerland has no comparable public supervision of the trust itself; instead, the trustee, if acting on a commercial basis from Switzerland, must hold a FINMA licence under FinIA Article 17(2). The two regimes operate in parallel and address different parties.

This article is general information and not a substitute for formal legal advice. Tax and legal outcomes depend on your personal circumstances, and the family-foundation reform is not yet enacted. Please contact us for advice on your specific case.

Sources

• Swiss Federal Office of Justice (Bundesamt für Justiz), “Trust”, Switzerland has no domestic trust law; the Hague Convention is in force since 1 July 2007; the Federal Act on Private International Law and the Debt Enforcement and Bankruptcy Act were amended, bj.admin.ch (accessed 4 June 2026).
• 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 for Switzerland (in force 1 July 2007), hcch.net.
• Federal Act on Private International Law (PILA / IPRG), SR 291, Articles 149a–149e, and Debt Enforcement and Bankruptcy Act (SchKG), Articles 284a–284b, Fedlex.
• CDBF, “The Swiss trust: a missed opportunity”, consultation opened 12 January 2022; consultation rejection on tax grounds; Federal Council decision not to proceed, cdbf.ch.
• WHVP, “Update on Swiss Trust Proposal: Federal Council’s Decision”, Federal Council decision of 15 September 2023 not to draft a dispatch; recommendation to dismiss motion 18.3383, whvp.ch.
• Mondaq / Schwärzler Rechtsanwälte / MME, “No Swiss trust – but liberalisation of the family foundation”, abandonment of the trust project on tax grounds; the Burkart family-foundation motion 22.4445, mondaq.com, s-law.com, mme.ch.
• Kendris, “Swiss Trust Law / Taxation (Part 1): Unconstitutionality of proposed tax solution”, kendris.com.
• PwC Switzerland, “Introduction of the Swiss trust law” and “Opportunities for the Swiss family foundation”; Loyens & Loeff, “Trusts in Switzerland – Foreign today, Swiss tomorrow?”, pwc.ch, loyensloeff.com.
• Reichlin Hess, “Federal Council tasked with developing a Swiss maintenance foundation” (17 June 2024); Lexology, “The Future of Family Foundations in Switzerland”, motion 22.4445; Council of States vote 12 December 2023; National Council vote 27 February 2024.
• Financial Institutions Act (FinIA / FINIG), Article 17(2), definition of a regulated trustee (segregated fund held on a fiduciary basis for the beneficiaries of a Hague-Convention trust); in force 1 January 2020, Fedlex; FINMA “Portfolio managers and trustees”.
• FINMA news (16 September 2021; 11 March 2025) and CapLaw “FINMA Guidance 02/23: Expiry of Transition Period for Portfolio Managers and Trustees” / Pestalozzi “Transition periods FinIA/FinSA”, three-year transition to 31 December 2022; no grandfathering; ~1,428 of 1,699 applications licensed, finma.ch, caplaw.ch, pestalozzilaw.com.
• Swiss Civil Code (ZGB), Article 80 (foundations) and Article 335 (family foundations), Fedlex.