Wealth and Private Clients — a part of the book Zug: The Making of a Global Hub by Dr Alexander Ressos.
The fiscal policy of Zug has always been directed at individuals as much as at companies. Low income and wealth taxes, the taxation according to expenditure for wealthy foreigners and the exemption of descendants from inheritance tax have made the canton one of the preferred places of residence for wealthy families in Switzerland. Around these families, an industry of asset managers, family offices, fiduciaries, trustees, lawyers and tax advisers has formed. Part F examines this private wealth economy. Chapter I describes the wealthy residents of the canton, the taxation that attracts them and the process of relocation. Chapter II addresses the professionals who manage their wealth: independent asset managers, family offices and trustees, and the regulatory framework that has applied to them since 2020. Chapter III examines the instruments of wealth structuring and succession: trusts, foundations and the rules of Swiss succession law and private international law. The Geneva volume treats private banking as the historic heart of the Geneva financial centre. In Zug, where banking was never the core of the economy, the private wealth business has a different character, closer to the families and their companies.
This part belongs to Zug: The Making of a Global Hub by Dr Alexander Ressos, published here in full, section by section.
The Wealthy Residents — conclusion
Zug is one of the three cantons with the highest average wealth per taxpayer in Switzerland. Read more Zug · Wealth and Private ClientsA canton of wealth
The statistics of the Federal Tax Administration show the concentration of private wealth in central Switzerland. Read more Zug · Wealth and Private ClientsThe taxation of income and wealth
The income tax of the canton is progressive, although its rates are among the lowest in Switzerland. Read more Zug · Wealth and Private ClientsTaxation according to expenditure in Zug
For wealthy foreign nationals who do not work in Switzerland, the canton offers the taxation according to expenditure, the lump-sum regime described in Part B. Read more Zug · Wealth and Private ClientsInheritance and gift taxes
The absence of an inheritance tax on transfers to descendants is one of the most important factors of the canton's attractiveness for wealthy families. Switzerland has no federal inheritance tax. Read more Zug · Wealth and Private ClientsWhy wealthy families move to Zug
The reasons for which wealthy families choose Zug are similar to those that attract companies. The taxes are low and the canton is close to Zurich and its airport. Read more Zug · Wealth and Private ClientsThe process of relocation
The relocation of a wealthy family to Zug involves several legal steps, which the practitioner must coordinate carefully. Read more Zug · Wealth and Private ClientsThe entrepreneur family and its companies
Many of the wealthiest residents of Zug are entrepreneurs or the heirs of entrepreneurs, whose wealth consists mainly of participations in family companies. Read more Zug · Wealth and Private ClientsReal estate for the wealthy residents
The wealthy families who move to Zug need housing, and they meet a market for high-end residential real estate that is among the most expensive in Switzerland. Read more Zug · Wealth and Private ClientsThe political debate in Zug
The attraction of wealthy residents is a matter of political debate in the canton. Read more Zug · Wealth and Private ClientsWealth, taxation and the fiscal equalisation
The concentration of wealthy residents in Zug has a direct effect on the canton's contribution to the national fiscal equalisation. Read more Zug · Wealth and Private ClientsPrivate wealth in crypto-assets and Digital Assets
A growing part of the wealth of the residents of Zug is held in crypto-assets and Digital Assets. Read more Zug · Wealth and Private ClientsZug and its neighbours
Zug is not the only canton that competes for wealthy residents in central Switzerland. Read more Zug · Wealth and Private ClientsThe tax administration and wealthy taxpayers
The relationship between the cantonal tax administration and wealthy taxpayers is characterised by the same pragmatism that Part B described for companies. Read more Zug · Wealth and Private ClientsSchools, health and the infrastructure of family life
The decision of a wealthy family to move to Zug depends on taxes and equally on the conditions of family life. Read more Zug · Wealth and Private ClientsSwiss families moving within Switzerland
Not all wealthy newcomers to Zug come from abroad. A significant part of the movement of wealthy families into the canton comes from other Swiss cantons, above all from Zurich, whose higher taxes on… Read more Zug · Wealth and Private ClientsPractitioner's checklist: relocating a family to Zug
The practitioner who advises a wealthy family on a relocation to Zug should address the following points. Read more Zug · Wealth and Private ClientsAsset Managers, Family Offices and Trustees — conclusion
The private wealth economy of Zug consists of independent asset managers, family offices, trustees and fiduciaries, who serve the wealthy families of the canton and clients around the world, and of… Read more Zug · Wealth and Private ClientsA private wealth economy without a private banking tradition
The private wealth economy of Zug differs from that of Geneva. Geneva's private banks, whose history the companion volume traces from the Protestant refuge to the present, have for centuries been the… Read more Zug · Wealth and Private ClientsThe regulatory turn of 2020
Until 2020, independent asset managers in Switzerland were not subject to prudential supervision. Read more Zug · Wealth and Private ClientsThe requirements for portfolio managers and trustees
The Financial Institutions Act sets several conditions for a portfolio manager or trustee. Read more Zug · Wealth and Private ClientsFamily offices
A single family office is an organisation that manages the affairs of one wealthy family: its investments, its companies, its real estate, its taxes, its philanthropy, its administration and often… Read more Zug · Wealth and Private ClientsAnti-money-laundering obligations of the professionals
The professionals of the private wealth economy are financial intermediaries within the meaning of the Anti-Money Laundering Act. Read more Zug · Wealth and Private ClientsThe banks behind the managers
The independent asset managers and family offices do not hold their clients' assets themselves. Read more Zug · Wealth and Private ClientsZug as a location for asset managers and family offices
The advantages of Zug as a location for asset managers and family offices are the same as those that attract wealthy families and companies. Read more Zug · Wealth and Private ClientsThe independent asset manager: a Swiss tradition
The independent asset manager is a characteristic figure of the Swiss financial centre. Read more Zug · Wealth and Private ClientsTrustees and the trust industry
The trustees of Zug administer trusts governed by foreign law for clients around the world. The trust industry of Switzerland grew in the second half of the twentieth century. Read more Zug · Wealth and Private ClientsRetrocessions and conflicts of interest
A question that has shaped the relationship between asset managers, banks and clients in Switzerland is that of retrocessions: payments that banks and product providers make to asset managers for the… Read more Zug · Wealth and Private ClientsLiability and disputes
The relationship between an asset manager and its client is a mandate under the Code of Obligations, under which the asset manager owes the client a duty of diligence and loyalty. Read more Zug · Wealth and Private ClientsConfidentiality and professional secrecy
The professionals of the private wealth economy are bound by duties of confidentiality towards their clients. For banks, the violation of banking secrecy is a criminal offence under the Banking Act. Read more Zug · Wealth and Private ClientsThe multi-family office between advice and licensing
The multi-family office, which serves several unrelated families, occupies a position between the independent asset manager and the single family office. Read more Zug · Wealth and Private ClientsThe generational transition in the wealth economy
The private wealth economy of Zug is entering a period of generational transition. Read more Zug · Wealth and Private ClientsTechnology and the wealth economy
The private wealth economy is changing under the influence of technology. Digital platforms allow clients to view their portfolios across several banks, and asset managers use algorithms and data… Read more Zug · Wealth and Private ClientsCross-border services to foreign clients
Many of the asset managers and trustees of Zug serve clients who live abroad. The provision of financial services across borders is subject to the rules of the clients' countries of residence. Read more Zug · Wealth and Private ClientsPractitioner's note: establishing a portfolio manager or family office in Zug
The practitioner who advises on the establishment of a portfolio manager or family office in Zug should address the following questions. Read more Zug · Wealth and Private ClientsTrusts, Foundations and Succession — conclusion
Part F has examined the private wealth economy of Zug. Chapter I described the wealthy residents of the canton, the taxation of their income, wealth and inheritances, the taxation according to… Read more Zug · Wealth and Private ClientsThe need for structures
Wealthy families use legal structures to hold, manage and transmit their wealth. The structures serve several purposes: to keep the family's wealth together across generations, to protect it against… Read more Zug · Wealth and Private ClientsThe trust in Swiss law
Switzerland does not have its own law of trusts. The civil law of Switzerland does not recognise the division of ownership between a legal owner, the trustee, and beneficial owners, the… Read more Zug · Wealth and Private ClientsThe taxation of trusts
The taxation of trusts in Switzerland is not governed by statute. It follows a circular of the Swiss Tax Conference, which the cantons apply. Read more Zug · Wealth and Private ClientsThe foundation and its limits
The Swiss Civil Code provides for the foundation, a legal entity created by the dedication of assets to a specific purpose. Read more Zug · Wealth and Private ClientsForeign foundations and the Liechtenstein connection
Liechtenstein, which borders the canton of St. Gallen and shares the Swiss franc and the customs area with Switzerland, has long offered a foundation law that allows the creation of family… Read more Zug · Wealth and Private ClientsThe company as an instrument of family wealth
For many families in Zug, the most important structure is a company. A family holding company, owned by the family members directly or through their own holding companies, can hold the family's… Read more Zug · Wealth and Private ClientsThe Swiss law of succession
The law of succession determines what happens to the wealth of a person at death. Swiss succession law, contained in the Civil Code, provides for statutory heirs, the spouse and the descendants in… Read more Zug · Wealth and Private ClientsInternational successions
The families of Zug are often international: the deceased may be a foreign national, the heirs may live in several countries and the assets may be located around the world. Read more Zug · Wealth and Private ClientsAsset protection and its limits
The protection of family wealth against creditors is a legitimate objective of wealth planning, which the structures described in this chapter can serve. Read more Zug · Wealth and Private ClientsLife insurance as a wealth structure
Life insurance policies, in particular unit-linked policies whose value depends on a portfolio of investments, are used by wealthy families as an instrument of wealth planning. Read more Zug · Wealth and Private ClientsDisputes over estates and structures
The wealth of the families of Zug is not immune to disputes. Disputes over estates, trusts and family companies are among the most bitter and the most expensive that the practitioner encounters. Read more Zug · Wealth and Private ClientsStructures for crypto-assets and Digital Assets
The families whose wealth includes crypto-assets and Digital Assets face specific questions in the planning of their succession. Read more Zug · Wealth and Private ClientsPhilanthropy
Many of the wealthy families of Zug support charitable causes, and the canton hosts a number of charitable foundations. Read more Zug · Wealth and Private ClientsPractitioner's note: reviewing a family's structures after a move to Zug
The practitioner who advises a family that has moved to Zug, or that plans to do so, should review its structures in light of the following questions. Read more