Private Trust Companies (PTC)

What is a Private Trust Company?

A Private Trust Company (PTC) is a company incorporated for the specific purpose of acting as trustee of one or more family trusts. Unlike an external professional trustee, the PTC is controlled — directly or indirectly — by the family itself, through the company's board of directors. This hybrid structure combines the advantages of family governance with the rigour of institutional administration.

The PTC is particularly favoured by families with substantial wealth (generally exceeding CHF 20 million) who wish to maintain significant control over the management of their trusts without forgoing the benefits of professional administration. It also serves as an excellent tool for educating the next generation in wealth management.

Structure and governance of a PTC

The governance of a PTC rests on a multi-layered architecture:

• Board of directors: Composed of family members and independent professionals (often the professional trustee). The board takes decisions relating to trust administration, investments and distributions.
• Shareholding (enfolder): The shares of the PTC are generally held by a purpose trust or an enfolder, ensuring that the shares do not form part of any individual's personal estate.
• Advisory committees: Specialist committees (investment, distribution, family) may be established to structure decision-making.
• Professional administrator: A professional trustee such as Swiss Trustee may sit on the board and fulfil administrative, accounting and compliance functions.

Advantages of the PTC structure

• Family participation: Family members sit on the board of directors and participate directly in decisions concerning trust assets and distributions.
• Transmission of values: The PTC enables the transmission of values, investment philosophy and family traditions from one generation to the next.
• Training of heirs: Younger generations can be progressively involved in governance through roles as observers or advisory committee members.
• Continuity: Unlike an individual trustee, a PTC offers perpetual continuity. Changes in board composition do not affect the trust structure.
• Consolidation: A PTC can act as trustee of multiple family trusts, simplifying the overall governance of the family estate.

The role of Swiss Trustee

Swiss Trustee supports families in the establishment and management of PTCs, intervening at multiple levels. We can incorporate the PTC in the appropriate jurisdiction, serve on the board of directors as a professional member, fulfil the function of company secretary, manage fiduciary accounting and ensure regulatory compliance.

Our presence on the board guarantees that decisions are taken in accordance with the governing law of the trust, fiduciary obligations and best governance practices. We also bring our knowledge of the Swiss and international regulatory framework, particularly regarding CRS, FATCA and anti-money laundering.

For families who wish it, we can also act as enfolder, holding the shares of the PTC through a purpose trust, thereby ensuring that the PTC remains independent from any family member's personal estate.