The entrepreneur family and its companies

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Many of the wealthiest residents of Zug are entrepreneurs or the heirs of entrepreneurs, whose wealth consists mainly of participations in family companies. For them, the taxation of the company and the taxation of the family are two sides of the same question. While the company pays profit tax, the family pays wealth tax on the value of its shares and income tax on the dividends. The combined burden determines the return on the family's wealth.

The wealth tax on unlisted shares depends on their valuation. The cantonal tax administrations value unlisted shares according to a method agreed among the cantons, which combines the net asset value and the capitalised earnings value of the company.¹ For a family whose company is highly profitable, the capitalised earnings value may far exceed the book value. The wealth tax can then become a significant burden, especially where the company retains its profits and pays small dividends. The low wealth tax rates of Zug, reduced further in 2024, mitigate this burden and are one of the reasons why entrepreneur families from higher-tax cantons move to Zug.

The structure of the family's holdings is equally important. A family may hold its operating company directly, through a personal holding company or through a family holding company in which several branches of the family participate. Each structure has different consequences for the taxation of dividends, for the wealth tax, for the transfer of the company to the next generation and for the governance of the family's relationship with the company. The practitioner in Zug is frequently asked to design or revise such structures, work that the canton's familiarity with holding companies, described in Part B, facilitates.

Notes

Swiss Tax Conference, Circular No. 28 "Wegleitung zur Bewertung von Wertpapieren ohne Kurswert für die Vermögenssteuer" of 28 August 2008, updated February 2022, ssk-csi.ch; KPMG Switzerland, "Steuerwert nicht kotierter Aktien", kpmg.com/ch: under the circular, trading, industrial and service companies are valued at twice the capitalised earnings value plus once the net asset value, divided by three, while pure holding and asset management companies are valued at net asset value. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

My approach is to act as a trusted advisor who works directly with decision-makers, on an equal footing: I start from what you want to achieve and shape every structure, contract and tax decision around your commercial goals and how it improves your after-tax return. As “lawyers who make it happen”, my team and I stay involved until your company is set up, your structure is in place and your transaction has closed, and we remain available for any follow-on work that may be required. You benefit from bespoke solutions and personal attention, and sound, friendly and practical advice. We are not the lowest-cost provider in the market, nor do we intend to be; our aim is to deliver well-founded, proper solutions and excellent value for money.

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The entrepreneur family and its companies

Notes

Setting up or expanding in Switzerland?