Private Trust Company Jurisdictions: Where to Site the Company

Choosing among private trust company jurisdictions is a decision about the trustee, not only about the trust. A private trust company (PTC) is a company created to act as trustee for one family or a small group of related trusts. Its seat decides whether it needs a licence, how much local presence it must show, and which regulator can ask questions. The same family and the same assets can face very different obligations depending on that choice.

What a private trust company changes

With a professional trustee, the family relies on an outside firm. With a PTC, the family sits on the trustee's board, usually together with at least one independent professional. The company becomes the legal owner of the trust assets, so its governance is the real control point.

The PTC is normally owned through a separate vehicle, often a purpose trust or a foundation, so that no individual family member owns the trustee. The holding structures page explains why that separation matters when the trust owns an operating business.

Which seats allow a PTC without a full licence

Several common-law seats have a regime under which a company acting as trustee for a single family, without soliciting the public, can operate under an exemption or a lighter registration. The conditions vary: some require a regulated administrator, some require local directors, some require a notification. Others treat any company acting as trustee as regulated. The comparison of regulated and lightly regulated seats sets out that spectrum.

Treat the left-hand column as a pattern, not a promise: each seat's conditions, and how regulators read them in practice, change over time and need checking against current law.

Substance expectations

An exemption rarely means an empty shell. Regulators, banks and tax authorities look at where decisions are actually taken. Typical expectations include:

• directors who attend meetings and keep minutes of real decisions;
• a registered office and a service provider who can answer questions;
• records of how investment and distribution decisions were reached;
• a board whose members are not simply nominees for the family.

The guide to economic substance covers the general rules, and the qualitative cost-of-substance comparison shows how seats differ in the burden they place on a family-run company.

The Swiss approach

Switzerland has no PTC-specific exemption. The question is instead whether the company falls within the trustee definition of the Financial Institutions Act (LEFin / FinIA).

Under Art. 17 para. 2 LEFin, a trustee is anyone who, on a professional basis, manages a separate estate or disposes of it for a beneficiary or a defined purpose under a trust deed within the meaning of the 1985 Hague Convention. Under Art. 3 LEFin, an activity is professional when it is an independent economic activity carried out to earn a regular income. Trustees are financial institutions under Art. 2 para. 1 let. b LEFin.

If a PTC is professional in that sense, the full framework applies:

• a Swiss company must be a sole proprietorship, commercial company or cooperative entered in the commercial register (Art. 18);
• minimum capital of CHF 100,000, paid in cash, plus suitable guarantees or professional liability insurance (Art. 22);
• management with at least two qualified persons (Art. 20);
• supervision by FINMA, with day-to-day oversight by a supervisory organisation (Art. 61).

Whether a family-owned company acting for relatives, with no remuneration and no clients, is professional is a question of fact. It should be settled in writing with counsel, and where doubt remains, with the regulator, before the company is incorporated. Wider context is in Switzerland as a trust seat.

Branching of PTC options

Who it suits

A PTC is usually considered by families with several trusts, a substantial operating business, or a wish to keep investment control inside the family while retaining an independent voice. Example: a family established in Lausanne holds an operating group through a trust and wants the next generation to learn governance as observers. A PTC with an investment committee can serve that purpose. It tends to be less suitable for a single modest trust, where the running costs of a company outweigh the benefit, and the question is then whether a professional trustee is simpler.

The set-up sequence

The steps usually run in this order, and each depends on the previous one:

1. Define the family's objectives and the trusts the company will serve.
2. Choose the seat, using the twelve-criteria method and the licensing analysis above.
3. Design the board, shareholding and committees, including a role for a professional director.
4. Set up the separate vehicle that holds the shares.
5. Incorporate the company and adopt its governance documents.
6. Appoint the PTC as trustee and settle the assets.
7. Open banking relationships and start the compliance calendar.

What the confidential assessment establishes

The assessment can establish which seat options are realistic for your facts, whether a Swiss structure would count as professional, what board and ownership design fits, and how the PTC relates to reserved powers, as discussed on the protector law page. It does not replace tax advice in each country concerned, and it does not set up the company by itself. Fees depend on the structure and are indicated after the assessment.