Case Study: A Business Family Using a BVI VISTA Trust

This case study is fictional. The family, the company and the facts are invented to illustrate a recurring question: when a family business sits inside a trust, which seat and which trustee model suit the shares? A VISTA trust, a structure created by British Virgin Islands legislation, is often the starting point. The case shows what such a structure does well, where a Swiss seat offers something different, and which questions need an individual analysis rather than a general answer.

The situation: a founder, a company and three adult children

Example: a founder in her late sixties, resident in Europe, owns a manufacturing group through a single holding company. Her three adult children live in different countries. One works in the business, one is an investor, one has no interest in the company. She wants the group to stay intact and under steady control, without forcing the children to agree on every strategic decision.

A conventional trust raises a practical problem. A trustee normally has a duty to monitor and diversify investments. A trustee that holds the shares of an operating company may therefore feel pressure to intervene in management, or to sell concentrated holdings. The founder wants the opposite: directors who run the business, and a trustee who holds the shares without second-guessing every commercial move.

What a VISTA trust is designed to do

A VISTA trust modifies the usual duties of a trustee for a specific asset: shares in a company. In broad terms, the trustee may leave the management of the company to its board and is relieved of the duty to monitor or intervene, unless the trust deed says otherwise. Our glossary entry on the VISTA trust sets out the vocabulary.

In the fictional case, advisers proposed the following arrangement:

The settlor transfers the shares to the trustee under a trust deed. The trustee holds them for the beneficiaries. The board of the holding company manages the group. The protector holds powers such as removing the trustee, which the deed must define carefully. For how these powers are treated in different legal systems, see protector and reserved powers law by jurisdiction.

The questions the family examined

Does a Swiss resident or a Swiss bank recognise a foreign trust?

Yes. Switzerland signed the Hague Convention of 1 July 1985 on the law applicable to trusts and on their recognition on 3 April 2007 and ratified it on 26 April 2007. It entered into force for Switzerland on 1 July 2007. The Federal Office of Justice confirms that foreign trusts have been recognised in Switzerland since that date. A BVI trust is therefore not an unknown object to a Swiss court or a Swiss bank. Recognition, however, is not the same as acceptance of every term: see the Hague Trusts Convention explained.

Does forced heirship threaten the structure?

This is the question that matters most when the settlor or the children have a link to a civil-law country. Swiss law applies to trusts through art. 149c of the Private International Law Act, which refers to the Hague Convention for the applicable law. Article 15 of the Convention, however, preserves mandatory rules on succession rights. A foreign governing law therefore does not automatically defeat a forced-share claim.

On the Swiss side, the revised succession law, in force since 1 January 2023, reduced the protected share. Under art. 471 of the Civil Code the reserved portion is half of the statutory entitlement, and under art. 470 para. 1 it concerns descendants, the spouse or the registered partner; parents are no longer reserved heirs. The Federal Office of Justice presents the reform as allowing a person to dispose freely of a larger share of their assets. Whether any of this applies depends on the founder's domicile, nationality and the location of assets, so the family received a note: a clause in the deed does not settle the matter alone. Our guide on forced heirship and trusts compares how different seats respond.

Would a Swiss seat change the control model?

Switzerland has no trust law of its own. A motion to introduce a Swiss-law trust was filed on 26 April 2018 and is recorded as closed as of 27 February 2024. A Swiss trustee therefore administers a trust governed by a foreign law, and the VISTA mechanism, which belongs to BVI law, cannot be copied into a Swiss-law instrument. What a Swiss seat can offer is a regulated trustee in Geneva or elsewhere, a Swiss banking relationship and a court system familiar to continental families. Switzerland as a trust seat sets out strengths and limits.

The BVI structure and its Swiss alternatives

The family compared three routes. The table keeps the criteria qualitative.

The last row deserves emphasis. No route in the table removes the exposure to mandatory succession rules in the countries concerned. The choice of vehicle shapes control and administration; it does not set aside mandatory law. For the vehicle question, read trust, foundation or company, and for the jurisdictional comparison, Switzerland versus the British Virgin Islands.

What the family concluded

In this fictional case, the family kept the VISTA structure for the holding company but made two changes after advice: a trustee administering the trust from a regulated Swiss base, so that day-to-day contact and banking sat close to the family, and a drafted letter of reasons for each reserved power. They also asked their counsel to review the position of the child living in a civil-law country before signing.

None of this is a recommendation. A different family, with different residences and a different company, could properly reach another conclusion. The same question appears, from the owner's point of view, in a business owner placing shares in trust, and the seat question in trusts holding operating businesses.

Limits of the case

• It is invented; it shows a way of reasoning, not an outcome.
• It does not address tax, which depends on each person's residence and on reporting rules.
• It does not replace an analysis of the deed, the governing law and the seat; the difference between them is explained in governing law versus seat.
• A trust holds up against many challenges and not all of them: protection has limits.

Fees depend on the structure and are indicated after the confidential assessment.