Practical structures for international families moving to Zurich

The arrival

International families move to Zurich for many reasons: the quality of life, the schools, the security, the political stability, the proximity to their business interests in Europe, and, for some, the tax conditions. The canton of Zurich abolished lump-sum taxation in 2009 by popular vote, which distinguishes it from neighbouring cantons such as Schwyz and Zug, where lump-sum taxation remains available. Chapter H.V addresses the tax consequences of this decision. For the families concerned, the move requires a review of all existing structures before the change of residence, because the Swiss tax treatment of a trust or foundation is often determined by the circumstances at the time of arrival or of settlement.

A typical pre-arrival review addresses the following questions. Is an existing trust revocable or irrevocable, and was it settled when the settlor was resident abroad? Does the settlor retain powers that could lead the Swiss tax authorities to attribute the trust assets to him? Are there foreign companies whose management will in future be exercised from Zurich? Does the family’s succession plan take account of Swiss compulsory portions and the new choice-of-law options under the revised PILA? Will the family office need a FINMA licence or membership of a self-regulatory organisation, depending on the persons it will serve? The answers are then documented, and where necessary confirmed by advance tax rulings, before the family takes up residence.

Typical structures

The resulting structures follow recurring patterns. A family that arrives with a discretionary trust settled abroad will usually keep the trust. It may appoint a Zurich trust company licensed by FINMA as trustee or co-trustee, or retain its offshore trustee while engaging a Zurich family office for administration. Where the trust holds a family business, an intermediate holding company in Switzerland or abroad provides a layer for governance and for dealing with withholding taxes. A second pattern involves the creation of a Swiss single family office, often with its seat in Zurich or in a neighbouring canton, organised as a company limited by shares and remunerated on a cost-plus basis under an advance ruling. The family office then provides investment management, reporting, accounting and administrative services to the family’s trusts, companies and individual members.

Philanthropy forms a third pattern. Many families establish a Swiss charitable foundation, supervised by the Federal Foundation Supervisory Authority or by ATIOZ, as a vehicle for their philanthropic activities in Switzerland and abroad. Zurich’s 2024 tax practice changes, which allow appropriate remuneration of board members and treat foreign activities on the same footing as domestic ones, have made such foundations more attractive. A family foundation under Article 335 of the Civil Code is less frequently chosen for new structures, given its restrictions, but may be used for specific purposes such as the education of descendants. Finally, the family governance layer, consisting of a family charter, family council and dispute resolution mechanism, links the various structures and gives them a common direction.

Coordination across borders

The most demanding aspect of these structures is coordination across borders. A family whose members live in Zurich, London, Munich and New York is subject to four tax systems, each with its own view of trusts and foundations. A trust that is fiscally neutral in Switzerland may be treated as a foreign grantor trust in the United States, subject to the anti-avoidance rules for trusts in the United Kingdom and caught by the German rules on foreign family foundations. Although Swiss practitioners do not advise on the law of these countries, they must understand enough of it to identify issues and to work with advisers there. This explains the importance of international networks, of professional organisations such as STEP and of lawyers qualified in several jurisdictions. Zurich’s role as a hub for family offices rests in part on its ability to assemble such teams.

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.