In this article, I’ll consider using a Swiss trust as a bank holding company. The Swiss trust company is the most popular holding entity for offshore banks, all be it a very expensive structure. If you want to have some facilities in Switzerland, and to improve the image of an offshore bank, consider using a Swiss trust as a bank holding company.
A Swiss trust company is an aged Swiss corporation, typically 10 to 50 years of age. A vintage Swiss trust company can act as a holding entity, thereby confirming the prestige and history of Switzerland on an offshore bank formed in a country such as Cayman, Belize, Puerto Rico, St. Lucia, or Dominica.
A Swiss trust can be structured to manage the assets of third parties. In this case, the company can be set up to manage the assets of the bank, which may include client funds and corporate capital.
These trust companies are also permitted to issue and receive (monetize/discount) financial instruments such as corporate bonds, letters of credit, bills of exchange, etc. Through their banking connections, Swiss trust companies can further benefit from the banks’ facilities to engage in commodities, instrument, equity and fixed income trading with virtually no restriction.
Depending on the business scope, a Swiss trust company can apply for a Financial Intermediary Asset Management License under the provisions of FINMA in Switzerland. This will allow to company to increase the number of clients and asset management facilities.
This company can also apply for a cryptocurrency or FinTech license in Switzerland. This might be useful if the bank holding company wanted to provide remittance services using fiat pegged coins or a similar service.
While a Swiss trust can set up a crypto exchange in Zug, Switzerland, you’ll need to be careful. If you will do this within a bank holding company, you need to consider your bank’s jurisdiction and how receptive regulators are to crypto. I suggest using a bank holding company as a crypto exchange will be allowed in Dominica but not in Puerto Rico (for example).
A Swiss trust company acting as a bank holding company will not have employee requirements in Switzerland. If the company applies for a license, such as a Financial Intermediary Asset Management License, then you will have employee and office requirements. In most cases, you will need two employees, at least one of which holds various personal licenses or credentials.
The purpose of the Swiss trust as a bank holding company is to confer the image and marketability of a top tier jurisdiction like Switzerland on an offshore banking jurisdiction such as Puerto Rico or Domica. The primary benefits of the structure are in your marketing to clients and in setting up accounts and facilities in Switzerland.
These Swiss trust structures are very expensive compared to other jurisdictions. For example, I currently have trust companies from 2012 through 1990 with prices ranging from CHF 120,000 to CHF 225,000. I also have a company from 1936 on offer for $450,000. Annual maintenance and registered agent are about CHF 10,000 per year.
The price of the structure is based on age. However, some clients might prefer a trust registered in Zug if they will apply for a crypto or FinTech license. And others may require a company set up in Zurich if they will operate from that city.
For the reasons stated above, the Swiss trust company is a popular option for a bank holding company, especially for those with global ambitions outside of their country of licensure. My firm has been working with these structures since 2003 and will be happy to assist you to acquire a Swiss trust company.