Setting Up a Swiss Family office

Setting Up a Swiss Family office

Setting Up a Swiss Family office: Switzerland is increasingly becoming the preferred location for the establishment of family offices. With around 70 single family offices and 400 multi-family offices, Switzerland is poised for further growth in this sector. The country’s appeal is bolstered by its top-ranking in the Human Development Index. Switzerland advantages are private banking history, well-established financial markets, competitive tax rates. Add to this a favorable regulatory environment for financial activities and you’ve got yourself a game plan. Do not hesitate to contact us at connect@swissfintechpro.com if you need more information about this matter.

Legal Vehicle to Set Up a Family Office in Switzerland

Switzerland doesn’t specifically define “family office” within its legal framework. FO may adopt various legal forms to best suit their operational and strategic needs. Predominantly, family offices may opt to organize as either:

• Companies Limited by Shares (SA/AG), or
• Limited Liability Companies (SARL/GMBH),

Both options aimed to minimize the personal liability of board members and managers involved in the family office’s operations.

Furthermore, an alternative structure for a family office can be the establishment as a Family Foundation. This structure offers another viable pathway for families looking to manage and allocate their wealth according to specific purposes. Any of those structures are taking advantage of Switzerland’s favorable regulatory environment for foundations.

Regulatory Landscape for Family Offices in Switzerland

Family Office Catering for Family Non Financial Needs

In this case there is no regulatory oversight at all. The same applies whether the office manage one or several families interests.

Click Here to view our post Family Office: Beyond Wealth Management listing all non-financial activities a Family Office may handle

Family Offices Offering Wealth Management

• Under the Financial Institutions Act (FinIA),asset management activities typically require authorization. However there’s an exemption for managers dealing with assets of economically or family-linked individuals, including single-family office members and managers.
• The Financial Services Act (FinSA) mandates customer advisers in family offices to be registered, simplifying service provisions to professional clients, like high-net-worth individuals opting for professional client treatment.
• Family and economic ties offer exemption from authorization and supervision under FinIA. This is the case for trustees and asset managers managing assets for related individuals or within a group, including private trust companies (PTCs) and single-family offices.
• Multi Family Offices, however, are subject to FinIA and FinSA regulations due to their broader client base.

Exemptions and Considerations

• Assets managed for persons with economic or family ties are excluded when assessing regulatory thresholds.
• Trustees may be exempt from authorization if supervised by a FINMA licensed trustee and act solely for trusts of the same family.

Switzerland is an attractive hub for family offices. It provides a blend of privacy, financial prowess, and regulatory clarity.

Switzerland also distinguish between single and multi-family offices. This distinction in terms of regulatory oversight underscores Switzerland’s nuanced approach to financial regulation. It ensures a conducive environment for wealth management and family office operations.

Benefiting of the exemption’s

Depending on the specific configuration of your contemplated family office, it may benefit from the exemptions previously outlined.

Typically, any family office

• that manages the assets of a single family, or
• that operates within an enterprise group with professionally managed finances,

Should qualify for these exemptions.

This strategic positioning allows for a significant degree of flexibility and efficiency in the operation of family offices, tailoring their structure to meet the unique needs of the family or group while optimizing for regulatory advantages within Switzerland’s accommodating legal framework.

Not Benefiting of the exemption’s

For family offices in Switzerland that do not qualify for the exemptions within the regulatory framework.

This will be Multi Family Offices and Single Family Offices that could not benefit of the exemption above.

It’s essential to consider the necessity of obtaining specific licenses to operate legally and effectively. Depending on the nature of the services provided, family offices may need to apply for one of the following licenses issued by the Swiss Financial Market Supervisory Authority (FINMA):

FINMA Trustee License: Required for family offices that provide trustee services, managing trusts and similar structures on behalf of beneficiaries. The core function of a trustee, involving the administration of a trust according to the terms set out in the trust deed. This includes managing the trust’s assets, ensuring the trust’s purposes are fulfilled, and acting in the best interests of the beneficiaries

FINMA Portfolio Asset Management License: Necessary for offices engaged in discretionary or individual portfolio management services, where investment decisions are made on behalf of clients.

FINMA CISA License (Collective Investment Schemes Act License): Applies to family offices that manage or distribute collective investment schemes, offering a structured approach to investment pooling and management.

Click Here to view our post Family Office: Beyond Wealth Management

Our Services

Out team of dedicated professionals including lawyers, accountants, auditors and bankers would be glad to assist you in setting up your Swiss Family Office. Do not hesitate to contact us at connect@swissfintechpro.com if you need more information about this matter