The introduction of a Swiss Trust law is a subject that has been under hot scrutiny in the Swiss trust industry for the past few years.

On September 15, 2023, the Swiss Federal Council made a significant announcement following extensive deliberation and consultations with stakeholders in the Swiss Trust industry, which is not to proceed with the Swiss Trust law, an outline for which was proposed last year.

The primary factor contributing to this decision was the issue of taxation. The tax treatment proposed for trusts encountered substantial opposition during the consultation process, ultimately failing to garner the necessary support for advancement. Notably, many Swiss experts expressed concerns that the proposed tax regulations would be less advantageous than the existing framework.

While many had eagerly anticipated the introduction of a Swiss trust law, others were somewhat sceptical about the usefulness of any such law, given that that trusts, with their versatility and utility, have been accessible in Switzerland since the adoption of the Hague Convention on Trusts in 2007 - without the need to introduce any specific trust legislation. And the sceptics have a point. Due to many factors, Switzerland continues to excel as a hub for wealth management and estate planning. Unrivalled for its political and economic stability, centuries-old legacy in private client services, and robust financial and legal infrastructure, it remains an attractive destination for international clients requiring trust services with or without a dedicated Swiss trust law.