Category: Private Client

In recent years, Cyprus has emerged as a prime destination for High-Net-Worth Individuals (HNWIs) acquiring or leasing aircraft. This is due to the highly attractive leasing structure available as a result of the officially named VAT Aircraft Leasing Scheme (VALS), which offers substantial VAT incentives.

Key Features and Benefits of the Structure:

Ownership and Leasing: The private aircraft must be owned by a Cyprus-registered VAT company (the Lessor) and leased to either a physical or legal person established or residing in Cyprus, provided they are not engaged in business activities (the Lessee).

Reduced VAT Rate: Under VALS, the VAT rate can be significantly reduced. The VAT is calculated based on the assumed percentage of time the aircraft flies within EU airspace, and this is determined by two factors:  the type of aircraft and secondly, its maximum take-off weight.

Simplified Record Keeping: There is no requirement to maintain detailed records, such as logbooks, for VAT purposes.

Attractive Corporate Tax Rate: Cyprus boasts a competitive corporate tax rate of just 12.5%. When combined with the special VAT rate, this makes the scheme one of the most appealing in the EU.

Global Aircraft Registration: The private aircraft may be registered under any international Aircraft register, and it is not required to be listed under the Cyprus Aircraft Register.

Qualification Requirements:

As can be expected, the VAT savings provided by the programme comes with specific eligibility criteria. At Dixcart, our team of experts are well-versed in these requirements and will support you throughout the entire process to ensure full regulatory compliance.

The primary qualification requirement is obtaining prior approval from the VAT Commissioner. This approval is granted on a case-by-case basis, and the VAT Commissioner reserves the right to reject any application.

As stated above, there are additional qualification criteria to be considered. Our team is at hand to ensure full compliance is met under local and EU regulations.

If you would like to discuss the full list of requirements with a member of our team please let us know by contacting us through our website (www.dixcartairmarine.com) or via email (advice.cyprus@dixcart.com). We are always happy to assist where we can.

How Can Dixcart help?

At Dixcart we have over 50 years of experience helping private clients establish and manage companies and international structures. The team in Cyprus is ready to guide you through every step of the process. Below is an overview of the comprehensive range of services we offer from our Cyprus office:

• Formation, administration, and management of Cyprus Companies (e.g., Lessor and Lessee Companies)
• Drafting of lease agreement
• Securing prior approval from the VAT Commissioner
• Coordinating the importation of aircraft into Cyprus and assisting with customs clearance  
• Comprehensive due diligence to ensure full compliance with local regulations
• Provision of a variety of other administrative services

If you are considering purchasing an aircraft and are interested in the attractive structing opportunities available in Cyprus, our team is here to assist you.

Introduction

As global mobility increases, individuals and families are exploring new opportunities to relocate, supported by a range of attractive residence schemes worldwide. With this trend on the rise, effectively managing and safeguarding family wealth across multiple jurisdictions and generations has become more crucial than ever.

Cyprus is a leading international business hub, offering a well-regulated and advantageous tax regime. Its strategic location, advanced infrastructure, political stability, and high-quality professional services make it an ideal destination for establishing a Cyprus Family Office – a vehicle designed to preserve and grow family wealth for generations to come.

What Is a Family Office and What Should You Be Looking Out for In a Family Office Provider?

A Family Office is typically a private entity engaged by a single family or a group of families to oversee their financial and legal affairs. While services may vary between families, they generally include:

• Accounting and Reporting: Providing timely, accurate financial reporting, including tax and performance updates.
• Advisory Services: Structuring for asset protection, tax optimisation, global mobility, and conflict prevention among generations.
• Direct Investments: Applying entrepreneurial skills and investment expertise to grow wealth through private equity, real estate, and business ventures.
• Investment Management: Managing wealth effectively across generations with a focus on long-term growth.
• Education: Preparing younger generations for wealth management responsibilities.
• Family Business Management: Creating a structured platform for managing and governing family-owned businesses.
• Philanthropy: Assisting families in fulfilling their charitable and philanthropic goals.

When selecting a Family Office provider, consider the following essential qualities:

• Unbiased Professional Expertise: Choose a legal or fiduciary professional who is independent of banks, investment managers, or fund advisers to ensure impartial guidance.
• Multi-Jurisdictional Coverage: Providers with international offices or global network affiliations can better coordinate a family’s cross-border affairs.
• Proven Experience: Seek a provider with a strong track record in Family Office management or complex, multi-generational wealth structures.
• Technical Excellence and Experience: Ensure the provider demonstrates high technical competence and has extensive experience in the industry.

Why Use a Cyprus Company?

Cyprus offers more than just a pleasant climate; it provides a highly attractive tax environment tailored to Family Office needs, including:

• 0% Income Tax: No income tax on dividends, capital gains, and most types of interest income for both corporations and individuals.
• No Inheritance or Wealth Tax: Making wealth transfer more efficient across generations.

Additional incentives include the Cyprus Non-Domicile Regime for individuals and the absence of withholding tax on dividend disbursements for corporate entities.

All companies that wish to make the most of the above benefits must be tax resident in Cyprus. In order to be considered tax resident a company must have sufficient economic substance in Cyprus. Our expert team at Dixcart Cyprus is ready to guide you through Cyprus’s tax incentives, assist with meeting the substance requirements, and help you explore the most advantageous strategies for your family’s specific circumstances.

How Can Dixcart help you?

Dixcart is a family-owned and operated business, proudly managed by the same family that founded it over 50 years ago. This deep-rooted legacy means working with and supporting families is part of our DNA and at the very heart of what we do.

Not only do we understand finance and business, we understand families, and with over 50 years of experience in the sector we have a wealth of knowledge which we believe is critical to the preservation of private wealth. Our teams offer in-depth expert knowledge on the local regulatory framework, complimented by the backing of our international group of offices, enabling us to deliver tailored solutions for you.

At Dixcart we know that every family is different, and we treat them as such. We work very closely with our clients, developing a deep understanding of their specific needs, offering bespoke services, recommending the most suitable structures, and providing unwavering support at every stage of the process.

If you are considering establishing a Cyprus family office, please reach out to us at advice.cyprus@dixcart.com. We would be delighted to answer your questions and assist you in safeguarding your family’s wealth for future generations.

The data contained within this Information Note is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time.

The use of trusts for wealth management and asset protection has evolved well beyond their English Common Law origins. Today, Switzerland stands out as a preferred jurisdiction for the administration of trusts, offering a unique combination of legal recognition, flexibility and professionalism. So, what makes Swiss Trustees particularly valuable?

A trust is an extremely flexible instrument and is particularly valuable for estate planning, wealth management and asset protection.

Fundamentally, the concept of a trust is straightforward: the Settlor transfers assets into the legal custody of another party, the Trustee, who then holds these assets for the benefit of a third party, the Beneficiary. The trust is not a separate legal entity but rather a legal obligation agreed between the Settlor and the Trustee.

1. Legal Certainty and Protection

Switzerland does not just recognise trusts, it actively supports them through a robust legal framework. In addition to ratifying the Hague Convention in 2007, Switzerland amended its Private International Law (CPIL) and Bankruptcy Law (DEBL) to explicitly address trust-related matters. These legal enhancements ensure clear rules for jurisdiction, the recognition of foreign judgments, and the separation of trust assets from a trustee’s personal estate.

This legal infrastructure creates a sophisticated environment for resolving trust-related disputes and enhances Switzerland’s appeal as a secure base for trust administration.

2. Flexibility

Swiss trustees can administer a wide range of trust types, including discretionary, accumulation and maintenance, and fixed interest trusts, with flexible structures tailored to meet the Settlor’s intentions. This adaptability allows trustees to respond to changing family circumstances, regulatory environments and tax residency. A discretionary trust can evolve alongside the needs of its beneficiaries, while an accumulation trust can serve long-term wealth preservation goals.

3. Stability and Reputation

Switzerland offers exceptional economic, political, and legal stability, making it an ideal location for long-term wealth preservation and administration. Building on its long-standing legacy in private banking, financial services, and investor protection, Switzerland offers unmatched credibility and confidence.

4. Discretion and Confidentiality

Swiss law and professional standards ensure strict confidentiality in trust administration. Swiss trustees are bound by professional secrecy to keep all client-related information confidential. Disclosure is only allowed in case of legal obligation, such as in criminal investigations. This discretion is a key benefit for families seeking privacy in their financial and estate planning.

5. Favourable Tax Environment

Switzerland offers an efficient tax framework for trusts:

• Trusts have no legal personality and are not considered taxable entities under Swiss law.
• Swiss-resident trustees are not subject to Swiss income or capital gains tax on trust assets.
• Non-resident Settlors and Beneficiaries are not taxed in Switzerland on trust income or distributions.
• Taxation depends primarily on the residence of the Settlors and Beneficiaries, offering opportunities for international tax planning.

6. High-Quality Professional Management

Swiss Trustees are regulated financial intermediaries, affiliated with self-regulatory organisations (SROs) and authorised by FINMA (Swiss Financial Market Supervisory Authority). Dixcart Switzerland is a FINMA regulated Trustee, affiliated with OSIF, and also a member of the Swiss Association of Trust Companies (SATC). Dixcart Switzerland has been providing Swiss Trustee services for nearly twenty years.

Our experts bring a wealth of legal, accounting, and investment expertise, combined with an understanding of international trust laws and multi-jurisdictional considerations.

The trustee role is a regulated profession under the Financial Institutions Act (FinIA) — unlike in many other European countries. Trustees must maintain adequate capital, strong internal controls, and qualified staff.

7. Strategic European Location

Located at the heart of Europe, Switzerland offers exceptional accessibility.

Compared to international trustees, who are based in all parts of the world, Swiss trustees offer geographic proximity. This allows for closer, more consistent contact with settlors – not only during the establishment of the trust but throughout its duration – allowing them to adapt to needs of both Settlors and Beneficiaries. They also maintain close relationships with banks and asset managers who are typically based in Switzerland.

Dixcart Switzerland

Dixcart Trustees (Switzerland) SA has been delivering Swiss trustee services for over two decades and, as of early 2024, is fully licensed by FINMA. As a member of the Swiss Association of Trust Companies (SATC) and affiliated with OSIF, we maintain the highest standards of compliance and professionalism.

For more information on Swiss Trusts, please contact Christine Breitler at: advice.switzerland@dixcart.com.

Background

The Delacroix family, a European high-net-worth family, had spent generations building wealth across various industries, including real estate, private equity, and financial markets. As their assets grew more complex and spread across multiple jurisdictions, they needed a robust and tax-efficient structure to manage their wealth efficiently, ensuring strategic oversight of investments, protect their assets from external risks (such as legal claims or political instability), and ensure they established a seamless succession plan to preserve the family wealth for future generations.

With Switzerland’s financial stability, legal certainty, and strong fiduciary expertise, the family decided to establish a Swiss Family Office using a Swiss Private Trust Company (PTC) structure. With careful planning, the Delacroix family implemented a structure that balanced wealth preservation, regulatory compliance, and investment flexibility while retaining control over decision-making.

Structuring the Swiss Private Trust Family Office

Unlike a traditional Trust where an external Trustee manages the assets, the Delacroix family opted for its own Swiss Private Trust Company (PTC) to act as the Trustee of the structure. This bespoke approach ensured that the Delacroix family retained control over their wealth structure whilst benefiting from Swiss fiduciary expertise and compliance oversight.

1. Forming the Swiss PTC

Establishing a Swiss Limited Company allowed the family to:

• Determine the composition of the PTC’s Board of Directors, appointing a mix of family members, trusted advisors, and professionals to guide its governance.
• Recruit and oversee employees responsible for the administration and management of the Trust structure.
• Engage asset managers, tax specialists, and legal advisors to provide expert advice and guidance in investment management, tax structuring, and regulatory compliance.

2. Asset Segregation: Creating Multiple Trusts for Different Asset Classes

The Delacroix family possessed a variety of asset classes that required consideration when setting up the PTC. Their assets included, a substantial investment in a Swiss private bank, a luxury yacht, several high-value collectibles, and a portfolio of commercial and residential properties that needed to be customized accordingly. As a result, they decided to establish three separate Trusts to sit within the PTC, each holding the different types of assets:

1. Real Estate Trust
2. Yacht and Lifestyle Trust
3. Portfolio & Investment Trust:  Overseeing their financial assets.

3. Ensuring a Smooth Succession Plan and Long-Term Governance

One of the most important objectives of the Delacroix family was to also secure the financial well-being of future generations, including minor children, their, grandchildren, and any vulnerable family members. Philanthropy is also important to the family, and as such they wanted to ensure they could continue to support the various charitable initiatives important to them.

With this in mind, the Delacroix family’s succession plan needed to include:

• A governance framework aligned with their family values. The PTC Board defined clear distribution policies to ensure responsible wealth management.
• Predefined conditions for Trust distributions, ensuring that the wealth is transferred to beneficiaries based on age, education, and other milestones as set out by the family.
• Long-term preservation of key assets. Certain assets, such as their family businesses and real estate, were protected from forced sales or external claims.

By structuring the PTC to serve as a multi-generational Trustee, the Delacroix family ensured financial stability, continuity, and governance flexibility over time.

Compliance and Regulatory Considerations

Due to Switzerland’s stringent regulatory framework, it was crucial for the Delacroix family’s PTC to collaborate with a Swiss professional Trustee to ensure full compliance with Swiss anti-money laundering (AML) laws, the Common Reporting Standard (CRS), and FATCA. By controlling the PTC, the family maintained financial privacy, minimising the necessity to disclose sensitive wealth information to external Trustees.

The Outcome

By establishing their family office through a Swiss Private Trust Company, the Delacroix family successfully created a long-term, legally robust and adaptable structure for wealth preservation and intergenerational governance. The structure allowed them to customise the management of their assets, retain full control over all Trustee decisions, facilitate a smooth transition of wealth across generations, subject to their criteria, and ensure full compliance with minimal exposure.

The Delacroix family’s experience highlights why Switzerland remains a premier jurisdiction for high-net-worth families looking for a structured, secure, and tax-efficient family office model. Dixcart Trustees (Switzerland) SA has been providing Swiss Trustee services for over twenty years and has obtained the FINMA license beginning of 2024, demonstrating its adherence to the highest regulatory standards for Trust management and ensuring compliance with Swiss financial regulations to uphold security and integrity. Dixcart Trustees (Switzerland) SA is a member of the Swiss Association of Trust Companies (SATC) and affiliated with the Organisme de Surveillance des Instituts Financiers (OSIF).

If you would like additional information regarding Swiss PTCs, or to discuss if this structure is right for you and your family, please contact Christine Breitler at the Dixcart office in Switzerland: advice.switzerland@dixcart.com.

For high-net-worth individuals and families, managing wealth across generations requires careful planning and a balance between control, flexibility, and asset protection. While traditional Trust structures are very effective, many families wish to retain control over decision-making.

A Private Trust Company gives families the possibility to manage their own estate, through a bespoke estate planning tool, to suit their specific needs.

What Is a Private Trust Company?

A Private Trust Company (PTC) is a legal entity established to act as the Trustee of one or more family Trusts. Unlike traditional Trust companies, which manage Trusts for multiple clients, a PTC serves only a single family or related group, offering a tailored approach to wealth management. They offer a higher level of control to the settlor or their family and can be particularly advantageous for families with complex or significant assets.

Benefits of a Private Trust

1. Retain Control Over Decision-Making: A PTC allows family members to control investments, distribution, and governance decisions. Unlike an institutional Trustee, a PTC enables more direct influence over Trust management, ensuring that family values and long-term goals remain intact.
2. Enhanced Privacy and Confidentiality: A PTC keeps Trust-related matters within the family, reducing the need to share sensitive information with external Trustees. This structure enhances privacy and minimises exposure to public scrutiny, as the family members decide what they wish to share and with who.
3. Efficient and Flexible Administration: With a PTC, Trust-related decisions can be made quickly without the delays associated with external Trust companies. The flexibility of a PTC allows for easier adaptation to changing financial goals and family circumstances.
4. Custom Governance and Succession Planning: A PTC enables families to establish a governance framework that aligns with their values and long-term vision. This structure allows for a smooth transition of wealth across generations, ensuring continuity, stability and flexibility
5. Stronger Asset Protection and Risk Management:By structuring a PTC correctly, families can enhance asset protection while maintaining compliance with legal obligations. A well-managed PTC can mitigate risks associated with external trustee decisions that may not align with the family’s best interests.
6. Tax and Estate Planning Advantages:While a PTC is not inherently a tax planning tool, by establishing one in a tax-efficient jurisdiction such as Switzerland, families can optimise their estate planning strategies when transferring wealth, as well as potentially minimise estate taxes.

Is a Private Trust Company Right for You?

A PTC is best suited for ultra-high-net-worth families with substantial assets, complex financial structures, and long-term intergenerational wealth management needs. If your priority when establishing a structure is to ensure control, privacy, and flexibility while ensuring proper governance, a PTC might be the ideal solution for managing your family’s Trust assets.

How to Set Up a Swiss Private Trust Company

Establishing a PTC involves legal, regulatory, and structural considerations.

A PTC is often set up and administered by an existing licensed professional Trustee, such as Dixcart Trustees (Switzerland) SA, which advises the board members of the PTC, in terms of corporate governance and Trustee matters. In some cases, a representative of the professional Trustee company will sit on the board of the PTC together with family members. This combination of family and professional advisers allows the PTC to react quickly to the needs of an extended family and to meet its best business interests. 

Dixcart Switzerland

Switzerland is often considered the main hub for family offices. Discretion, expertise and security, together with one of the best jurisdictions in the world for asset protection and asset management makes it the best place for a high-net-worth family to conduct its estate management and control of its assets.

Dixcart Trustees (Switzerland) SA has been providing Swiss Trustee services for over twenty years and has obtained the FINMA license beginning of 2024, demonstrating our adherence to the highest regulatory standards for trust management and ensuring compliance with Swiss financial regulations to uphold security and integrity. Dixcart Trustees (Switzerland) SA is a member of the Swiss Association of Trust Companies (SATC) and affiliated with the Organisme de Surveillance des Instituts Financiers (OSIF).

Additional Information

If you would like additional information regarding Swiss PTCs, please contact Christine Breitler at the Dixcart office in Switzerland: advice.switzerland@dixcart.com.

In recent years, Malta has become an attractive jurisdiction for high-net-worth individuals and families looking to establish Single Family Offices (SFOs) due to its robust regulatory environment and favourable tax regime. A SFO is an entity that manages the wealth of a single family, offering services such as investment management, estate planning, philanthropic activities and lifestyle management. The primary objective is to preserve, increase, and seamlessly transfer family wealth across generations.

Family Offices are one of the priority areas indicated in the Strategy for Financial Services launched in March 2023. On the same line, the Malta Financial Services Authority (MFSA), in a recent circular, has identified family offices as a growth opportunity for Malta’s financial services sector. In collaboration with the Malta Financial Services Advisory Council and other representative industry bodies, it has updated its regulatory framework to facilitate the establishment of such structures in the country.

The MFSA circular amends the framework for setting up and operating SFOs in Malta.

Key Frameworks Amended

The circular, published on 27 November 2024, outlines regulatory updates and guidelines, requirements, compliance obligations, and operational expectations for individuals or entities setting up SFOs within Malta’s jurisdiction. The document highlights the framework adjustments aimed at attracting high-net-worth families to manage their wealth from Malta while ensuring compliance with financial regulations and risk mitigation. The MFSA has amended two frameworks, namely the Investment Services Rules for Notified Professional Investor Funds (PIFs) and Related Due Diligence Service Providers; and the Trustees of Family Trusts Rulebook.

Amendments to the Investment Services Rules for Notified PIFs

A Notified PIF, an instrument that was launched at the end of 2023, can now be managed by a Fund Manager in Malta who is exempt from needing an investment services license, provided the PIF only invests in the private wealth of family members and does not raise external capital. This is applicable to family office vehicles. The amendments also clarify what constitutes a “family office vehicle” and specify the types of investors that can use such structures.

In addition, local managers who are exempt from an investment services license will now have reporting obligations. These managers are required to report according to specific parts of Annex 2 to the Rules.

A new Section has been added to provide supplementary rules for Notified Professional Investor Funds (PIFs) managed by exempt managers. It defines specific thresholds for the applicability of exemptions available to Fund Managers, requiring Due Diligence Service Providers and the governing body of the Notified PIF to verify and confirm the eligibility for these exemptions both initially and on an ongoing basis.

Amendments to the Trustees of Family Trusts Rulebook

One of the most significant changes is about the definition of ‘family member/family dependent’, which has been broadened to reflect modern family structures. In certain cases, the definition may now extend to include ‘family clients’ who can benefit from family Trusts.

As a consequence of these amended definitions, registration considerations also needed to be amended to accommodate Trusts involving family clients as beneficiaries.

What Changes for High-Net-Worth Families

The amendments to these frameworks present an opportunity to create wealth management structures that include investment capabilities, while reducing reporting requirements. When combined with Malta’s existing global mobility and immigration programmes, EU membership, use of English as an official language, and a diversified financial services sector, these new elements are designed to enhance Malta’s appeal to high-net-worth families.

Additional Information

The Dixcart Malta office can assist from a structuring, regulatory compliance and operational perspective. For further information on Single Family Offices in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com 

The popularity of Family Investment Companies (FICs) has increased over recent years, and they are viewed as a corporate alternative to the more common discretionary trust.

What is a Family Investment Company?

FICs are companies limited by shares (an “Ltd” or “Limited”) and often established by parents and/or grandparents (“Founders”), to benefit themselves and their family, as shareholders. An FIC owns assets such as property, which generate income and capital gains, which can be distributed to the family shareholders over time.

Assets generally come from the Founders themselves, either through a loan or a direct transfer into the FIC. Each shareholder owns a different class of shares (often referred to as “alphabet shares”), gifted to them by the Founders.

Generally, the Founders’ shares will have the usual rights to vote and receive dividends but not capital, whereas the gifted shares will only have the rights to receive dividends and capital, but not to vote.

This ensures that the Founders have the sole right to make decisions, regarding the FIC, at both shareholder and board level, including decisions relating to dividend payments.

Benefits of a Family Investment Company

A number of benefits are available through the use of an FIC. It is, however, important to speak with a tax specialist, such as Dixcart, who can help advise on the tax merits of an FIC, taking into account each potential Founder’s circumstances and objectives.

The benefits offered through the use of an FIC, include:

1. FICs can be used to move assets from individuals’ personal estates into a corporate vehicle, which can then be used, to control those assets by those individuals (Founders), being the only shareholders with the power to vote and to decide the composition of the board. This allows them to provide a controlled source of income for both themselves and their family over a period of time.
2. Limited companies offer the advantage of flexibility. This is ideal in situations where family structures, objectives and other considerations, are changing regularly. Examples of such flexibility, include: shares being transferred, new shares being issued with different rights, and changes to the composition of the board of directors.  All of which can be decided by the Founders.
3. There are a number potential tax advantages when using FICs, including Inheritance Tax, but these will vary depending on; the size of the investments/loans, the assets held by the FIC and the personal circumstances of the Founders.
4. If the Founders loan funds to the FIC, the loan can be repaid over time from the FIC’s post tax profits, in addition to any profit paid out by way of dividends. This can provide the Founders with an ongoing source of income.
5. Alternatively, if the capital value of the loan is no longer needed, the Founders could gift the value of the loan to other family members. This would move the value of that loan out of their taxable estate, for Inheritance Tax purposes, subject to them surviving the date of the ‘gift’ by seven years.

Opportunities Provided Through the Use of a Non-UK Resident FIC by International Families

International families making direct investments into UK companies, as individuals, are liable to UK Inheritance Tax on those UK situs assets. It is also advisable to have a UK will to deal with those assets on their death.

Making those investments through a non-UK resident FIC can remove the liability to UK inheritance tax as well as the need to have a UK will.

An Example Using a Guernsey Company

The example below details the potential benefits provided through the use of a Guernsey company.

The company will pay tax at a rate of 0% on any profit that it generates, due to the fact that this is the corporate tax rate in Guernsey (with limited exceptions and subject to any specific provisions in the counties where investments are held).

Provided that the company is correctly managed and controlled from Guernsey and the register of members is kept, as required, ‘offshore’ it is possible to retain ‘excluded property’ status for IHT (apart from in relation to UK residential property and certain other assets).

The shares in the company are not a UK situs asset. If the company is a private Guernsey company, it does not need to file accounts. There is a beneficial ownership register for companies in Guernsey, this is private and not searchable by the public.

Additional Information

To find out how an FIC might be of benefit to you, and for assistance in establishing an IFC appropriate to meet your needs, please contact the Dixcart office in the UK: advice.uk@dixcart.com

The Dixcart office in the UK can also provide advice as to whether a non-UK resident FIC might be applicable in your particular family circumstances.

The Middle East is home to a growing number of high-net-worth families with diverse and often complex wealth management and estate and succession planning needs. As families in the region focus on preserving their legacies and planning for the next generation, innovative structures like the Private Trust Foundation (PTF) offer an ideal solution. Combining the best aspects of Guernsey Trusts and Foundations, a PTF provides a tailored approach to managing and safeguarding wealth in alignment with the region’s unique cultural, financial, and legal considerations.

What is a Private Trust Foundation?

A Private Trust Foundation is a hybrid structure where a Guernsey Foundation acts as the trustee for a Guernsey Trust. This innovative arrangement combines the flexibility, confidentiality, and tax efficiency of a trust with the legal personality, governance, and control offered by a foundation.

For Middle Eastern families, this structure provides a robust mechanism to align with Sharia-compliant principles, address succession challenges, and centralise asset management, whilst maintaining privacy and often most importantly for our clients, control.

In this arrangement:

• The Foundation serves as the trustee, holding legal ownership of the trust assets and managing them according to the Trust Deed. This could include holding shares in the family business.
• The Trust retains its role as a fiduciary vehicle to protect and distribute wealth in line with the settlor’s wishes via the Trust Deed.
• A Guardian is appointed by the Founder of the Foundation to ensure the Foundation Council acts in accordance with the Foundation’s objectives and charter.
• The Settlor transfers the legal ownership of assets to be held by the Trust in accordance with the Trust Deed.
• Beneficiaries are appointed by the Settlor within the Trust Deed detailing whom the structure should benefit. The Settlor may also be a beneficiary.
• The Foundation Council can be made up of family members, working alongside professional fiduciaries to ensure decisions reflect both family values and professional expertise.

• In order to benefit from the Guernsey regulatory regime either the Guardian of the Foundation or one of the Council members must be a licensed Corporate Service Provider in Guernsey

The Appeal of Private Trust Foundations to Middle Eastern Clients

1. Succession Planning Across Generations
   Many Middle Eastern families operate multigenerational businesses or hold significant wealth across jurisdictions. A PTF ensures seamless wealth transfer, providing a clear and controlled framework for succession planning. The foundation’s governance allows for family representation while adhering to the settlor’s vision.
2. Sharia Compliance and Family Harmony
   Islamic principles, such as the equitable distribution of wealth and asset preservation, can be accommodated within the flexible structure of a PTF. The foundation’s role as trustee ensures that the trust is managed according to specific family or religious requirements, reducing potential disputes and fostering unity.
3. Privacy and Confidentiality
   Discretion is paramount for many families in the Middle East. Guernsey offers a high degree of confidentiality, with no public register of trusts and the register of foundations only includes the following information; foundation name, registered office address, registration date and foundation status. . This ensures that details about the Settlor / Founder, beneficiaries, assets, and governance remain private.
4. Centralised Control and Governance
   The foundation’s council acts as a decision-making body, balancing professional expertise with family involvement. This structure aligns with the preference for centralised control often seen in Middle Eastern family enterprises.
5. Protection Against External Risks
   Political or economic instability can pose risks to family wealth. The PTF structure provides a stable, legally robust framework to protect assets from external claims or unforeseen challenges.
6. Adaptability
   Whether for holding shares in a family business, preserving real estate, or facilitating philanthropic endeavours, the PTF adapts to the family’s unique needs.

Real-World Applications for Middle Eastern Clients

1. Business Succession Planning
   Many Middle Eastern families rely on family businesses as their primary source of wealth. A PTF allows for professional management while preserving family control. It can hold business shares and ensure continuity through generations.
2. Asset Protection
   In jurisdictions with uncertain political or legal environments, a PTF offers security and stability. Wealth is managed under Guernsey’s strong legal framework, reducing exposure to local risks.
3. Philanthropy and Religious Giving
   A PTF can be used to structure charitable giving or fulfil zakat obligations through the Trust in a transparent and compliant manner. The foundation’s oversight and control of the Trust ensures that philanthropic objectives are met appropriately.
4. Multi-Jurisdictional Asset Management
   For families with assets across the globe, the PTF provides a centralised structure, simplifying management whilst respecting local regulations.

Why Choose Guernsey?

• Global Reputation: Guernsey is renowned for its stability, expertise, and innovation in fiduciary and wealth structuring. Its legal framework ensures that structures like PTFs meet international standards while offering flexibility.
• Favourable Tax Environment: Guernsey’s tax-neutral regime benefits Middle Eastern families by enhancing tax efficiency without compromising compliance.
• Expertise: Service providers in Guernsey, such as Dixcart, bring decades of experience in tailoring solutions to clients with complex needs, ensuring a seamless and professional experience.

Conclusion

A Private Trust Foundation is a modern, adaptable solution for Middle Eastern high-net-worth families seeking to preserve wealth, plan for succession, and uphold cultural values. Its unique combination of trust and foundation benefits ensures privacy, protection, and a legacy that aligns with your family’s vision.

At Dixcart Guernsey, we specialise in crafting bespoke wealth management solutions tailored to your specific circumstances. Contact Beth Le Cheminant at advice.guernsey@dixcart.com to discuss how a Private Trust Foundation could meet your family’s unique needs.