Trusts, Foundations and Holding companies:
A Comparative Framework for Global Family Wealth Structuring

The expansion of global private wealth is profoundly reshaping the way families manage, protect and transfer their assets. For entrepreneurial families, HNWIs and UHNWIs, the challenge is no longer limited to wealth creation, but increasingly concerns the ability to govern assets that span multiple jurisdictions, generations and asset classes, including corporate holdings, real estate, financial investments, art collections and diversified family interests.

In this context, the central question naturally evolves from “where to invest?” to “how should wealth be structured, governed and transferred over time?”

According to leading international wealth management reports, global private wealth continues to grow and concentrate, reinforcing the need for increasingly sophisticated structuring solutions. In 2024, BCG estimated global private wealth at approximately USD 512 trillion, up 4.4%, while UBS reported a 4.6% increase in global wealth and a significant concentration of millionaires in the United States, accounting for approximately 39.7% of the global total. More recent 2025 data confirm an acceleration of this trend: according to Capgemini, global HNWI wealth increased by 8.7%, reaching USD 98.3 trillion, while the HNWI population grew by 7.9% to 25.3 million individuals. The UHNWI segment also continued to expand above average, with a global population of approximately 250,000 individuals and total wealth increasing by 9.7%. [1][2][3]

These figures explain why wealth planning can no longer be reduced to a purely tax-driven exercise. Wealth is growing, becoming increasingly international, fragmented across jurisdictions and generations, and subject to rising scrutiny from regulators, tax authorities and financial intermediaries. As a result, structuring is now an integral component of wealth strategy.

At the same time, in 2024 jurisdictions participating in the AEOI/CRS standard exchanged information on more than 171 million financial accounts, representing a total value of nearly EUR 13 trillion. Tax authorities across 116 jurisdictions are now engaged in automatic information exchange under the AEOI framework, with further jurisdictions expected to join in the coming years. [4] In other words, international wealth planning has become an exercise in structured transparency rather than absolute confidentiality.

Among the most commonly used instruments in international wealth structuring are three core categories: trusts, foundations and holding companies. Each responds to a different logic. This article outlines the essential features of each vehicle, highlighting their key characteristics, underlying rationale and the ways in which they may, in appropriate circumstances, be combined within a broader wealth architecture.

For internationally mobile families, wealth is rarely static. Family members relocate, businesses expand into new markets, investments are diversified globally and future generations establish lives in different countries. This mobility creates legal, tax, banking, regulatory, succession and reputational complexities that require careful coordination.

In a world shaped by CRS, FATCA, beneficial ownership registers and unprecedented levels of international cooperation among tax authorities, wealth structures must be defensible not only from a technical perspective but also from a governance and transparency standpoint. They should be capable of being explained as legitimate instruments for continuity, stewardship and risk management rather than opaque vehicles designed solely for confidentiality.

International wealth planning has therefore become an exercise in structured transparency rather than absolute privacy.

Trusts

At its core, a trust is created when an individual (the settlor) transfers assets to another party (the trustee), who holds and administers those assets for the benefit of designated beneficiaries or for a specific purpose.

The defining characteristic of a trust is the separation between legal ownership, management and economic benefit.

Trusts can be structured in significantly different ways depending on the objectives pursued.

In a non-discretionary trust (often referred to as a fixed-interest trust), beneficiaries' rights are predetermined. The trust deed may specify entitlement to income, capital distributions or other benefits according to predefined criteria. In this model, the trustee retains fiduciary and administrative responsibilities but has limited discretion regarding the timing, amount and allocation of distributions. The structure provides predictability, although with less flexibility.

By contrast, a discretionary trust grants the trustee broader decision-making authority. Beneficiaries may be identified individually or as a class—for example, "the descendants of the settlor"—without acquiring an automatic entitlement to distributions. The trustee determines whether, when and to whom distributions should be made, taking into account the provisions of the trust deed, the circumstances of beneficiaries and, frequently, the guidance contained in the settlor's Letter of Wishes.

While generally not legally binding, the Letter of Wishes often plays an important role in communicating the family's long-term philosophy regarding wealth stewardship. It may include objectives such as preserving capital, supporting education, encouraging entrepreneurship, limiting excessive distributions or promoting philanthropic initiatives.

From a practical perspective, trusts commonly hold financial assets, business interests, shares in holding companies, real estate or other investment assets, either directly or through underlying corporate structures.

A critical element is the selection of an independent and competent trustee capable of interacting effectively with banks, legal advisors, tax professionals and investment managers. A trustee who merely follows the settlor's instructions without exercising independent judgement may undermine the integrity and credibility of the structure.

Many trusts also include a Protector, whose role is to provide oversight and exercise specific powers over significant trustee decisions. Depending on the trust deed, the Protector may approve extraordinary distributions, replace trustees, consent to amendments or oversee strategic decisions. While this role can provide additional comfort to the family, excessive powers concentrated in the hands of a Protector—particularly if closely connected to the settlor—may weaken the perceived independence of the trust and increase legal or tax risks.

Investment governance represents another essential component. Although fiduciary responsibility remains with the trustee, professional investment advisors are often appointed to assist with portfolio management. In such cases, a well-drafted Investment Policy Statement should define objectives, risk parameters, liquidity requirements, concentration limits, permitted asset classes, ESG considerations and reporting standards.

A trust should not only be properly established; it must also be properly administered throughout its life cycle.

This distinction between establishment and ongoing administration is fundamental. During the establishment phase, key decisions include the governing law, trustee appointment, beneficiary classes, powers, duration, asset transfers, protector provisions and distribution principles. During the operational phase, however, the trust must function as a living structure. Trustees must review beneficiary requests, document decisions, maintain compliance, liaise with advisors and financial institutions, monitor investments and ensure that the structure continues to reflect the evolving circumstances of the family.

Many trust disputes arise precisely from the gap between legal form and practical substance. A trust may face challenges where the settlor retains excessive control, the trustee fails to act independently, documentation is inadequate or distributions are inconsistent with the trust instrument. The resulting risks extend beyond taxation and may include banking, reputational, succession and family governance issues.

A poorly implemented trust may ultimately create the very uncertainty, conflict and litigation it was intended to prevent.

It is equally important to recognise that trusts do not enjoy uniform treatment across jurisdictions. The same trust may be treated as transparent in one country, opaque in another, taxable upon settlement in one jurisdiction and upon distribution in another. The residence of the settlor, trustee and beneficiaries, together with the degree of retained control and the revocable or irrevocable nature of the structure, can significantly influence the outcome.

For this reason, international trusts should never be analysed through a single domestic lens. They require a coordinated, cross-border assessment of all jurisdictions involved.

For clients residing in Switzerland—or considering relocation to Switzerland—this issue is particularly relevant. Switzerland recognises foreign trusts under the Hague Trust Convention but does not currently provide a domestic trust regime equivalent to those found in common law jurisdictions. As a result, careful analysis is required regarding tax treatment, reporting obligations, governance arrangements and interactions with Swiss financial institutions and authorities.

Trusts remain a vast and highly technical subject that cannot be fully explored within a broader comparison of wealth planning structures. Their inclusion here is intended to position them within the wider context of international family wealth architecture. A dedicated article will examine trust structures in greater depth, including their governance, practical applications, limitations and strategic role in preserving and transferring global family wealth.

Foundations

A foundation is, first and foremost, a segregated pool of assets dedicated to a specific purpose. The founder transfers certain assets to an autonomous legal entity with its own legal personality, which is entrusted with administering those assets in accordance with the objectives set out in its governing documents.

In a foundation, the focus is not the beneficiary, but the purpose itself. The assets are not simply set aside for a family or a particular cause; they are separated from the founder and permanently dedicated to a purpose that is intended to guide the foundation’s activities over time. For this reason, foundations are often perceived as more institutional structures than trusts. They typically have governing bodies, constitutional documents, a foundation board, internal regulations and, in many jurisdictions, some form of public or regulatory oversight.

The first distinction to be made is between philanthropic foundations and private or family foundations.

A philanthropic or charitable foundation is established to pursue objectives that go beyond the interests of a single family or a limited group of beneficiaries. It may support educational, cultural, scientific, social, environmental, healthcare or humanitarian initiatives. Its legitimacy derives from the fact that the underlying assets are dedicated to a broader public or collective interest.

For HNWI and UHNWI families, a philanthropic foundation can become a vehicle through which part of their wealth is transformed into reputational, social and values-based capital. For some families, philanthropy also serves as a powerful tool for cohesion: while business interests and financial assets may create differing views among family members, a well-governed foundation can provide a shared purpose and a long-term project capable of bringing generations together.

Private or family foundations serve a different purpose.

Their objective is not necessarily public benefit, but rather the management, protection and continuity of wealth intended for a family, designated beneficiaries or a particular succession line. In many jurisdictions, this type of foundation can be used as a civil law alternative to a trust: an autonomous legal entity that owns and administers assets under its statutes and regulations, while providing benefits or distributions to family members.

Such structures are often appreciated by families from civil law jurisdictions because they are more familiar from an institutional and corporate perspective. There is a legal entity, a governing board, constitutional documents, internal regulations and a clearly recognisable form of asset segregation.

The difference between a private foundation and a trust, however, remains significant. In a trust, the fiduciary relationship between the trustee and the beneficiaries is central. In a foundation, by contrast, it is the legal entity itself that owns the assets and acts through its governing bodies. Depending on the jurisdiction and the specific structure, beneficiaries may enjoy varying degrees of rights, but they do not necessarily have a direct legal claim over the underlying assets.

This can provide greater stability and continuity, particularly where the objective is to avoid the fragmentation of family wealth or to reduce the influence of individual claims by family members.

For international families, a private foundation can be particularly useful when there is a desire to establish a stable centre of wealth ownership, supported by formalised rules and a governance framework that is less dependent on the fiduciary discretion typically associated with trusts. A foundation board may include family members, independent professionals or a combination of both. It can be complemented by internal regulations, investment policies, family charters and oversight mechanisms. In this way, the foundation becomes a platform for long-term wealth continuity.

A critical point, however, is that the term “private foundation” does not carry the same meaning across all jurisdictions.

In some jurisdictions, such as Liechtenstein, private or family foundations can be highly flexible instruments for wealth and succession planning. They may hold family assets, regulate beneficiaries and distributions, and perform functions broadly comparable to those of a trust while retaining a civil law structure.

In other jurisdictions, however, family foundations are permitted only within much narrower limits. This is where the Swiss framework becomes particularly relevant.

In Switzerland, foundations are highly developed structures, but primarily in the field of public-benefit and charitable activities. Swiss data highlights the significance of the foundation model: Switzerland is home to more than 13,000 charitable foundations with approximately CHF 100 billion in foundation assets, making it one of the most developed jurisdictions worldwide in terms of foundation density and tradition. In 2025, the number of active foundations reached a new record high, with 13,782 active foundations and a positive net balance of new establishments over dissolutions.

These figures are important because they illustrate where Switzerland's strengths truly lie: not as a jurisdiction for broad private family foundations, but as a leading centre for philanthropic, grant-making, operational and public-benefit foundations.

Swiss private family foundations are subject to considerably greater restrictions.

Article 335 of the Swiss Civil Code permits the creation of family foundations, but limits their purpose to specific objectives such as education, support or assistance for family members. It does not allow the establishment of a foundation whose purpose is simply to finance the general lifestyle of descendants or to preserve family wealth indefinitely for the benefit of a succession line.

This is a key distinction between Switzerland and certain other jurisdictions. A Swiss family foundation cannot be regarded as the full equivalent of a discretionary trust or a Liechtenstein private foundation.

The reason is both historical and legal. Swiss law has traditionally taken a cautious approach towards structures that immobilise family wealth indefinitely. Swiss legislation prohibits family entails and similar succession arrangements designed to tie assets to a family across generations while restricting their free transferability.

For this reason, international families considering Switzerland as part of their wealth planning strategy may also evaluate the establishment of foreign private foundations in jurisdictions that permit greater flexibility, such as Liechtenstein. Any such structure, however, must be carefully coordinated with the family's tax residence, the location of the assets, applicable reporting obligations and the treatment of the structure in Switzerland and any other relevant jurisdictions.

Ultimately, the value of a foundation lies not so much in its legal form as in the alignment between assets and purpose.

A charitable foundation without a genuine public-benefit objective may face challenges or lose credibility. A family foundation established in an overly restrictive jurisdiction may fail to achieve its intended objectives. Likewise, a foreign private foundation that is not properly coordinated with the tax residence of its beneficiaries may create tax, regulatory or banking risks.

Conversely, a properly designed foundation—with a clear purpose, competent governing bodies, effective governance rules and genuine substance—can represent one of the most robust tools available for transforming private wealth into a long-term institutional project capable of preserving continuity across generations.

Holding Companies

A holding company is, at its core, a corporate entity. Its primary function is to hold, organise and coordinate assets, shareholdings and investments through a legal structure that is recognised, operational and generally well understood by banks, counterparties, advisors and regulatory authorities.

This apparent simplicity, however, should not be misleading. A holding company is far more than a mere “container” for assets. When properly structured, it can become the central control platform of a family’s wealth. In particular, for wealth originating from entrepreneurial activities, a holding company often represents the natural transition from personally managed wealth to institutionally organised wealth.

Its value becomes particularly evident when a family's wealth is not limited to a single investment portfolio but consists of multiple assets with different characteristics, risk profiles and objectives. A family may own an operating business, minority shareholdings, income-producing real estate, private equity investments, financial portfolios, cash reserves and stakes in new entrepreneurial ventures. Holding all these assets directly at an individual level can become inefficient, difficult to monitor and vulnerable from a succession planning perspective.

A holding company allows these assets to be consolidated within a single platform where ownership, control, reporting and strategic decision-making can be managed in a more structured and coordinated manner.

In this respect, the role of a holding company differs fundamentally from that of a trust or a foundation. A trust governs the relationship between assets, beneficiaries and trustees. A foundation provides continuity and autonomy to assets dedicated to a specific purpose. A holding company, by contrast, operates at the corporate and economic level: it organises asset ownership and enables a family to exercise control, direction and coordination. It is the vehicle through which wealth becomes manageable in a structured and professional manner.

For entrepreneurial families, a holding company can create a clear separation between family ownership and the management of operating businesses. This distinction is often crucial. If each family member owns shares directly in operating companies, every generational transition, family dispute, divorce, succession event or personal financial need can directly affect the stability of the underlying business. By concentrating ownership at the holding level, the family can retain control without fragmenting the ownership of the operating entities themselves.

This structure also allows a distinction to be made between the role of shareholder and that of manager. Not every family member needs to be actively involved in the business. Not everyone needs to participate in operational decisions, nor should all family members necessarily have the same degree of influence or access to information.

A holding company can be used to define economic rights, voting rights, governance arrangements, board composition, dividend distribution policies and entry or exit mechanisms for shareholders. In this way, entrepreneurial wealth is managed not as a collection of individual interests, but as a coordinated family project.

From a financial perspective, a holding company can also perform a treasury and capital allocation function. Dividends generated by operating businesses may be collected at the holding level and subsequently reinvested, distributed or allocated to new initiatives. This helps prevent liquidity from being fragmented among individual family members without a common strategy.

The holding company may finance acquisitions, invest in financial markets, participate in alternative investment funds, support new entrepreneurial ventures or maintain liquidity reserves for future opportunities. Over time, wealth generated through operating businesses can therefore be transformed into a diversified pool of family capital.

Within a sophisticated wealth structure, a holding company should be supported by a clearly defined investment policy. Establishing a company and opening a bank account is not sufficient. It is necessary to determine who makes decisions, under what mandate, within which risk parameters, over what investment horizon and according to which reporting standards.

A family holding company may have a board of directors, an investment committee, external advisors, asset allocation guidelines, concentration limits, liquidity requirements and approval procedures for significant investments. This is where the holding company begins to resemble a family office—not as a marketing label, but as a framework for the professional management of family capital.

Holding companies can also enhance the transparency and readability of a family's wealth structure from the perspective of banks and financial intermediaries. A clear corporate structure supported by financial statements, organisational charts, documented beneficial ownership, board resolutions, contractual documentation and reporting is generally easier to understand than fragmented and opaque personal ownership.

This advantage, however, exists only when the structure is genuinely organised. A chain of holding companies lacking substance, commercial rationale, documentation or coherent jurisdictional alignment may produce the opposite effect: increasing reputational risk, complicating banking relationships and attracting scrutiny from tax authorities or counterparties.

Tax considerations remain important, but they should be viewed within the proper context.

Historically, holding companies have often been used to optimise dividend flows, capital gains, withholding taxes, participation exemption regimes and the consolidation of financial resources. These considerations remain relevant, but they can no longer be assessed in isolation.

A holding company should not be established solely because it is perceived as “tax efficient”. Rather, it should perform a demonstrable wealth management, governance or business function.

This principle becomes particularly important in cross-border structures. A company incorporated in one jurisdiction may own assets in several countries, have shareholders resident elsewhere, directors located in a third country and banking relationships in yet another financial centre. If effective management and governance are inconsistent with the company's stated tax residence, issues such as tax residency challenges, dual residency claims, substance-related disputes or anti-avoidance rules may arise.

For international families, such structure should therefore be viewed not merely as a corporate vehicle but as a structure that requires ongoing governance and disciplined administration.

Another often overlooked issue is succession planning.

A holding company may organise assets, but it does not automatically solve generational succession. If the shares of the holding company are owned directly by family members, the succession issue does not disappear upon the death of the founder or another shareholder—it simply becomes concentrated at the level of the holding company shares.

This can be advantageous, as transferring or regulating ownership of a single corporate entity is generally easier than dealing with a multitude of underlying assets. However, it can also become a point of vulnerability if there are no shareholders' agreements, transfer restrictions, pre-emption rights, buy-sell arrangements, testamentary planning measures or an overarching ownership structure such as a trust or foundation.

For this reason, in more sophisticated wealth structures, the holding company is not necessarily the ultimate ownership layer. It may serve as the operating and investment platform, while ownership of the holding company itself is held through succession and governance structures designed to provide long-term continuity.

Like any planning tool, a holding company also presents risks.

The first is the blurring of the distinction between personal and corporate assets. If the holding company is treated as an extension of the family's personal bank account—with undocumented withdrawals, private expenses, informal loans or unrecorded decisions—the credibility of the structure is weakened.

The second risk is excessive complexity. A simple holding structure with a clear purpose can be highly effective; a multi-layered structure with no genuine rationale may become costly, opaque and difficult to justify.

The third risk is the absence of governance among family shareholders. A holding company with multiple family members but no clear rules can easily become a source of conflict, particularly when some shareholders favour reinvestment, others prefer distributions, some are actively involved in the business and others remain passive owners.

Ultimately, a holding company is a particularly effective tool when wealth requires control, coordination and professional management. It is often the most suitable vehicle for holding investments, organising ownership, centralising financial flows and creating a clearer and more manageable wealth structure.

It should not, however, be mistaken for a complete family planning solution. Its greatest value emerges when it forms part of a broader architecture. On its own, a holding company can rationalise and organise wealth. Combined with trusts, foundations, family agreements and governance frameworks, it can become the operational engine of a comprehensive international wealth structure.

Wealth Architecture

Trusts, foundations and holding companies are fundamentally different tools in terms of legal nature, purpose and application. Yet one of the most common mistakes in international wealth planning is to view them as mutually exclusive alternatives.

A closer examination of their respective characteristics demonstrates that there is no universally superior solution. In fact, within the most sophisticated wealth structures, these vehicles are rarely chosen in opposition to one another. Rather, they are often combined within a single wealth architecture, with each component serving a distinct and complementary function.

The key question, therefore, is not simply, "Which vehicle should be selected?" but rather, "What role should each layer of the structure perform?"

International families often require multiple objectives to be addressed simultaneously: asset protection, corporate control, succession continuity, family governance, tax efficiency, banking compatibility and investment flexibility. No single vehicle is capable of meeting all these needs on its own. Trusts, foundations and holding companies operate on different levels, and it is precisely for this reason that they can work together effectively.

A trust primarily operates within the fiduciary and succession-planning sphere. Its purpose is to separate legal ownership from beneficial enjoyment, entrusting the administration of assets to a trustee who acts according to defined rules and in the interests of the beneficiaries. Trusts are particularly valuable when the objective is to protect beneficiaries who may not yet be ready to manage wealth directly, regulate distributions over time, preserve the integrity of family wealth and ensure continuity beyond the lifetime of the settlor.

In essence, a trust answers the question: Who should administer wealth on behalf of the beneficiaries, under which rules, and with what degree of discretion?

A foundation, by contrast, operates at the level of purpose and institutionalisation. Assets are separated from the founder and dedicated to a defined objective, whether philanthropic, family-oriented or a combination of both. Foundations become particularly relevant when a family seeks to transform part of its wealth into a long-term project with its own identity, governance framework, governing bodies and institutional continuity.

A foundation therefore answers a different question: What purpose should the wealth serve over time, and through which institutional structure should that purpose be pursued?

A holding company operates on yet another level—that of ownership, management and economic coordination. It is often the most effective vehicle for holding shareholdings, coordinating assets, centralising financial flows, implementing investment strategies, producing consolidated reporting and exercising control over operating businesses or investment structures.

For entrepreneurial families, the holding company frequently serves as the bridge between business interests, financial wealth and family governance.

It therefore answers a third question: How should family assets be owned, controlled and managed on a day-to-day basis?

In many cases, the most robust solution is not a single structure but a layered one.

A common example is the family that owns an international operating business. The operating company may be held through a family holding company that centralises ownership and receives dividend flows. The holding company may also own financial investments, real estate assets and interests in new entrepreneurial ventures. Above the holding company, a discretionary trust may govern the economic rights of beneficiaries and preserve family continuity, preventing ownership from becoming fragmented among heirs residing in different jurisdictions.

Another example is a family that has already sold its business and whose wealth is primarily financial in nature. In such circumstances, the holding company may function as an investment platform supported by an asset allocation strategy, an investment committee and consolidated banking relationships. The trust may regulate distributions, preserve capital and facilitate generational transitions. A separate philanthropic foundation may be established to pursue social, educational or cultural objectives without blending private family governance with philanthropic activities.

The distinction between the ownership layer and the operational layer remains fundamental.

The operational layer concerns the day-to-day and strategic management of assets. The ownership layer, by contrast, addresses who ultimately controls the holding company, how economic rights are exercised and what happens in the event of death, incapacity, family disputes, divorce or changes in the residence of beneficiaries.

The coexistence of multiple vehicles inevitably requires careful tax and regulatory coordination. Each additional layer increases complexity and therefore the need for alignment. For this reason, planning should not begin with the selection of a particular vehicle, but with a thorough mapping of the jurisdictions involved: where family members reside, where assets are located, where decisions are made, where banking relationships are maintained and where beneficiaries may relocate in the future.

Within this context, family governance becomes equally important.

No legal structure can substitute for clear rules among family members. A holding company without appropriate shareholder arrangements may generate conflicts among owners. A trust without a clearly articulated distribution philosophy may create tension among beneficiaries. A foundation without a genuinely shared purpose may become little more than a formal institution lacking direction.

For this reason, legal structures should be supported by governance processes and documentation, including family charters, investment policies, reporting frameworks, distribution guidelines, decision-making procedures, conflict-of-interest policies and periodic review mechanisms.

Ultimately, international wealth planning is not about identifying the most sophisticated vehicle. It is about designing the most coherent architecture.

An effective wealth structure is one that successfully integrates tax considerations, governance, succession planning, investment strategy and family values into a framework that remains understandable, defensible and sustainable across generations.

Sources:

• [1] Boston Consulting Group, Global Wealth Report 2025

• [2] UBS, Global Wealth Report 2025

• [3] Capgemini, World Wealth Report 2026

• [4] OECD / Global Forum, Peer Review of the Automatic Exchange of Financial Account Information 2025 Update

• [5] Hague Conference on Private International Law, Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition

• [6] SwissFoundations, Zahlen & Fakten

• [7] Fundraiso, The richest foundations in Switzerland — a current overview

• [8] Wenger Vieli, The family foundation in Swiss law

• [9] OECD, CRS Controlling Persons Self-Certification Form

• [10] FATF, Guidance on Beneficial Ownership and Transparency of Legal Arrangements