Countries That Recognise Trusts: A Hague Convention Map

Which countries recognise trusts under the Hague Convention, and what does that recognition actually give you? The short answer is that a Hague party agrees to treat a validly created foreign trust as a trust, with a minimum set of consequences, while keeping the right to apply its own mandatory rules. Recognition is a floor, not a blanket approval.

This page compares three broad groups of countries and uses Switzerland as the worked example, because Swiss law spells out the mechanics in statute. It is general information. Whether a particular trust will be recognised where it matters to you depends on the governing law, the location of the assets, the residence of the people involved and the courts that would hear a dispute.

What "recognition" means for a trust

The Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition starts with a definition. Under Article 2, a trust is a legal relationship, created during life or on death, in which assets are placed under the control of a trustee for the benefit of a beneficiary or for a specified purpose. The assets form a separate fund, title stands in the trustee's name, and the trustee must manage the assets and account for them.

Two clarifications in the same article matter for families. A settlor may reserve certain powers, and the trustee may also be a beneficiary, without that being incompatible with the existence of a trust. Many structures that feel "less than pure" to a lawyer from a civil-law country still fall within the definition.

Article 11 then sets the consequence. A trust validly created under the applicable law is recognised as a trust. At a minimum, recognition means two things:

• the trust assets are separate from the trustee's personal estate;
• the trustee can sue and be sued, and can appear in that capacity before a court.

That is all the Convention promises on the core question. Everything beyond it, such as how the trust is taxed, registered or reported, remains a matter for each country.

Three groups of countries

It helps to sort countries by how they approach trusts before looking at any single list. The groups below are a simplification. The official status table kept by the Hague Conference on Private International Law is the place to check whether a given state is a party, and a lawyer in that state should confirm how its courts apply the rules.

None of the three groups is better in the abstract. A common-law seat gives the trust a natural home, but the assets may sit elsewhere. A civil-law Hague party offers a treaty floor and a court system familiar with civil procedure. A non-party may still recognise a trust in practice, but you carry more uncertainty and usually need a local opinion first. For a method on weighing seats generally, see how to choose a trust jurisdiction.

The basis: which law governs the trust

Recognition cannot be separated from the question of which law applies. Under Articles 6 and 7, the trust is governed by the law the settlor chose, expressly or by implication. If no law was chosen, the trust is governed by the law with which it has the closest connection. The factors listed are the place of administration designated by the settlor, the location of the trust assets, the residence or place of business of the trustee and the objectives of the trust.

There is a safety valve. If the chosen law does not have the institution of the trust, the choice has no effect and Article 7 applies instead. This prevents a settlor from choosing the law of a country with no trust concept and then claiming the benefits of a trust.

The difference between the law governing the trust and the place where it is administered is a frequent source of confusion, and the two can point to different countries. The page on governing law versus seat of administration explains the distinction, and the glossary entry on the proper law of a trust gives the short definition.

Where recognition stops

Hague parties do not give up control. Two provisions limit what recognition means in practice.

Trusts with only foreign connections

Under Article 13, a state is not bound to recognise a trust whose significant elements, other than the chosen law, the place of administration and the habitual residence of the trustee, are connected mainly with states that do not have the trust institution. The logic is sound: a country that has no trust concept should not be forced to treat a purely foreign arrangement as a trust when its only real link is a choice of law.

Mandatory rules of the forum

Under Article 15, the Convention does not prevent the application of the forum's mandatory provisions. The article names several areas:

• the protection of minors and persons lacking capacity;
• the effects of marriage;
• succession rights;
• the transfer of title to property;
• the protection of creditors;
• the protection of third parties acting in good faith.

This list is why recognition does not equal immunity. A court in a Hague party will recognise the trust as a trust, and may still apply local succession or creditor rules to the assets within its reach. The effect on heirs is covered separately in the page on forced heirship and trusts, and the comparison of asset-protection statutes shows how seats differ in practice. Protection of this kind has limits, and those limits vary by country.

Switzerland as a worked example

Switzerland is useful because it implemented the Convention through statute. It signed the Convention on 3 April 2007, ratified it on 26 April 2007, and the Convention 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. The Convention is classified as RS 0.221.371.

Switzerland has no domestic trust law of its own. It recognises trusts governed by foreign law, and the Swiss trustee community administers them. Chapter 9a of the Private International Law Act (PILA, or LDIP), Articles 149a to 149e, was introduced by a federal decree of 20 December 2006 and has been in force since 1 July 2007. It fills the gaps the Convention leaves open.

Two provisions of the Debt Enforcement and Bankruptcy Act (DEBA, or LP) complete the picture. Under Article 284a, when trust assets answer for a debt, enforcement is directed against a trustee as representative of the trust, at the seat of the trust, and continues as a bankruptcy limited to the trust assets. Under Article 284b, in the bankruptcy of a trustee the trust assets are set aside from the bankruptcy estate, after deduction of the trustee's claims against those assets.

These rules show what recognition looks like when a civil-law country takes it seriously: not only a treaty promise, but rules on courts, registers, judgments and insolvency. For the full picture of strengths and limits, see Switzerland as a trust seat, and for the myths that circulate, myths about Swiss recognition of trusts.

How to read a recognition status for your situation

A country's status on a list is the starting point. Four questions turn it into something usable.

1. Where are the assets? A bank account, a company holding and a house in three countries mean three sets of local rules. See real estate in trusts by seat for the property side.
2. Who are the beneficiaries and where do they live? Mandatory family rules of their countries may apply regardless of the seat.
3. Which courts would hear a dispute, and would they enforce a judgment from the trust's seat? The page on courts, enforcement and foreign judgments covers this.
4. Does the trust still fit its seat if the settlor moves? See trust seat and governing law when the settlor relocates.

Example: a family established in Lausanne, with one branch in a common-law country and an apartment in a country that is not a Hague party. The trust may be recognised without difficulty where the family lives, yet the apartment could raise an entirely separate question. That is a reason to analyse each asset location, not to rely on one general answer.

Choosing between recognition profiles

Because there is no universal winner, the better question is which profile suits the structure. A family whose assets and beneficiaries are mostly in common-law countries may find a common-law seat the most natural. A family with strong ties to civil-law countries, or one that wants a civil-law court system with statutory trust rules, may find a Hague party with implementing legislation more suitable. Where the main assets sit in a non-party, local counsel's opinion on recognition should come first.

Consult the side-by-side pages, such as common-law seats versus civil-law seats, for deeper criteria. The right answer depends on your situation, and it is established through an individual analysis, not a map.