Trusts and the transparency register – who is the beneficial owner when a trust holds an ownership interest in a Swiss company

Trusts are not a separate legal institution under Swiss law, but they are regularly encountered in practice by Swiss companies limited by shares. Entrepreneurial families use them for succession and wealth planning, international investors hold ownership interests through trust structures, and the share register may then list not a family member but a trustee or a trustee company. With the entry into force of the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA) and the Ordinance on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETO) on 1 October 2026, this constellation became a reporting issue for the company concerned. It must identify its beneficial owners and report them to the transparency register (Art. 7 and Art. 9 LETA). Where a trust is involved, the circle of such persons is considerably broader than for an ordinary ownership interest.

This article explains who qualifies as a beneficial owner of a Swiss company when a trust holds an ownership interest in it and how the trust is reflected in the report to the transparency register. It first explains what a trust is from a legal perspective and how LETA deals with trusts, then outlines typical practical cases and finally addresses two borderline cases that repeatedly raise questions during the recording process: a trust without a trustee and a trust without beneficiaries.

Table of contents

• What a trust is from a legal perspective

• How LETA deals with trusts

• Where Swiss companies encounter trusts in practice

• Who is a beneficial owner when a trust is involved

• How the trust is represented in the chain of control

• Borderline cases that raise questions in practice

• What the company and its board of directors should do in practice

• Conclusion

• Record trust-held ownership interests correctly now

What a trust is from a legal perspective

A trust is a legal institution originating in Anglo-Saxon law. One person, the settlor, transfers assets to another person, the trustee. The trustee becomes the legal owner of those assets but may not use them for the trustee’s own benefit. The trustee administers them in accordance with the provisions of the trust deed for the benefit of beneficiaries or to fulfil a defined purpose.

For transparency law, one characteristic is particularly important. A trust is neither a legal person nor a legal entity and has no legal personality of its own (Dispatch, BBl 2024 1607, p. 84 and p. 108). Only the trustee can act. If a trust holds an ownership interest in a Swiss company limited by shares, it is therefore the trustee who holds the shares in the name of the trust (Explanatory report on LETO, p. 17). In such cases, the share register therefore lists the trustee, rather than the trust, as the shareholder.

Roles within a trust

In addition to the settlor and the trustee, many trusts involve other persons. The protector oversees the trustee and, depending on the trust deed, may have extensive powers, such as the right to remove the trustee. Beneficiaries receive distributions from the trust assets or their income, either on the basis of fixed entitlements or at the trustee’s discretion. A trustee may be a natural person or a company, often a professional trustee company. LETA focuses specifically on these roles, which is why it is important to distinguish them clearly.

Discretionary or fixed, revocable or irrevocable

Trusts differ considerably in how they are structured. In a discretionary trust, the trustee decides at its discretion whether and to what extent beneficiaries receive anything. In a non-discretionary trust, the beneficiaries have fixed entitlements. A revocable trust may be terminated by the settlor or another authorised person; an irrevocable trust may not. Banks have long recorded these characteristics in Form T under the Agreement on the Swiss Banks' Code of Conduct with Regard to the Exercise of Due Diligence (CBD 20, Form T).

These distinctions also have legal consequences under LETA. When establishing the chain of control, the company must expressly record whether a trust is discretionary (Art. 15 para. 2 let. d no. 3 LETO). The explanatory report states that this is because the beneficiaries of a discretionary trust cannot necessarily be identified by name and such trusts are regarded as presenting a significantly higher risk from an anti-money-laundering perspective (Explanatory report on LETO, p. 24).

The trust under Swiss law

Swiss private law does not provide for the trust as a legal institution (Dispatch, BBl 2024 1607, p. 108). Foreign trusts are, however, recognised in Switzerland on the basis of the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition (Dispatch, BBl 2024 1607, p. 109). A trust holding an ownership interest in a Swiss company is therefore governed by foreign law, such as the law of England, Jersey or the Cayman Islands, and is administered by a trustee in Switzerland or abroad. The law applicable to the trust is among the information the company must obtain for the chain of control (Art. 15 para. 2 let. d no. 1 LETO).

How LETA deals with trusts

Because a trust is not a legal entity, it is not itself subject to LETA and is not entered in the transparency register as a reporting legal entity (Explanatory report on LETO, p. 17). LETA addresses trusts in two other ways.

The first route is through the trustee. Trustees resident or domiciled in Switzerland and trustees who administer a trust in Switzerland must identify, verify and document the beneficial owners of the trust and retain this information for five years after the end of their function (Art. 2 para. 2 and Art. 16 LETA). Trustees that are already subject to the Anti-Money Laundering Act are exempt because the due diligence obligations under the AMLA apply to them (Art. 2 para. 2 LETA). These obligations are intended to ensure that the authorities can access the information even in the case of non-professional trustees (Dispatch, BBl 2024 1607, p. 109). In this capacity, the trustee does not itself make a report to the transparency register (Explanatory report on LETO, p. 17).

The second route is more important for boards of directors and executive management. It operates through the company in which the trust holds an ownership interest. If a trust controls a company subject to LETA, for example because the trustee holds a significant ownership interest in the name of the trust, the company must trace the chain of control and identify the beneficial owners of the trust (Explanatory report on LETO, p. 17). Those persons are then beneficial owners of the company and are reported by the company to the transparency register. Accordingly, the register also contains trusts that reporting legal entities report as part of their chain of control (Art. 43 let. a LETO).

Where Swiss companies encounter trusts in practice

A trust is rarely apparent at first glance. The share register shows the trustee as shareholder; in an indirect structure it may even show only a company whose ownership interests are in turn held by a trustee. Swiss companies typically encounter trusts in the following situations.

• For succession and wealth planning, a founder transfers her shares into a family trust whose beneficiaries are her children and grandchildren, and the trustee is entered as shareholder.

• The trustee does not hold the ownership interest for the trust directly, but through an underlying company, as it is known in banking terminology, which itself holds an ownership interest in the Swiss company (SBA Commentary on the CBD 20, p. 59).

• A professional trustee company acts as trustee and is itself controlled by natural persons.

• The trustee holds the ownership interest for a purpose trust in order to preserve the company’s continuity and independence after the founder’s death (SBA Commentary on the CBD 20, p. 60).

There are several reasons why trusts play such an important role in the review process. First, they fundamentally change the circle of beneficial owners, as the next section shows. Second, where a trust is involved, the company must always establish and report the chain of control, regardless of how many levels lie between it and the beneficial owners (Art. 15 para. 1 let. b LETO). Third, a trust increases the verification effort. The company must verify the information received with the due diligence required in the circumstances (Art. 7 para. 2 LETA), and the Dispatch specifically cites companies held by trusts in complex international structures as examples of cases in which more in-depth verification is necessary (Dispatch, BBl 2024 1607, p. 64 and p. 91). Fourth, the control authority takes trusts in the chain of control into account when assigning legal entities to risk categories (Art. 64 para. 3 let. d LETO).

Who is a beneficial owner when a trust is involved

First, the threshold at company level

The starting point is the general rule. A beneficial owner is any natural person who ultimately controls a company, whether through a direct or indirect holding of at least 25 per cent of the capital or voting rights or by other means (Art. 4 para. 1 LETA). The trust is an intermediate link in this context. An ownership interest held through a trust is regarded as an indirect holding for the persons behind the trust (Art. 2 para. 1 LETO).

This gives rise to two basic cases. If the trustee directly holds at least 25 per cent of the company for the trust, the threshold is met and, for this ownership interest, the company’s beneficial owners are the beneficial owners of the trust (Art. 1 para. 2 LETO; Dispatch, BBl 2024 1607, p. 89). If the trustee does not hold shares in the company itself for the trust, but instead holds ownership interests in an underlying company, that holding must exceed 50 per cent, and the underlying company must itself hold at least 25 per cent of the reporting legal entity (Art. 2 para. 2 LETO). If the ownership interest is below these thresholds, it does not, on its own, result in beneficial ownership. Control by other means, for example through a shareholders’ agreement (SHA), remains reserved (Art. 3 LETO).

All roles within the trust count

Once the threshold is met, the core trust question arises. Unlike in the case of a company, there is no calculation of which proportion belongs to which person. Instead, the following natural persons are deemed to be beneficial owners of a trust (Art. 15 para. 1 LETA):

• the settlor,

• the trustee,

• the protector,

• the beneficiaries, and

• any other natural person who controls the trust directly, indirectly or by other means, including the beneficial owners of a legal person that performs one of the roles listed above.

This broad definition follows the international FATF standard, under which all persons involved in a trust are regarded as beneficial owners and must be identified (Dispatch, BBl 2024 1607, p. 108). For the company, this means that each of these persons is a separate beneficial owner of the company, regardless of the size of that person’s economic interest in the trust assets. If there are several beneficiaries or several trustees, all of them must be reported.

For each of these persons, the company reports as the extent of control the direct holding in the company that is held for the account of the trust (Art. 13 para. 3 LETO). If the trustee holds all the shares, the settlor, the trustee and each individual beneficiary appear in the register with an extent of control of more than 75 per cent, even though none of them can dispose of the trust assets alone (Explanatory report on LETO, Annex 1, no. 2.6).

Who qualifies as a beneficiary

Beneficiaries are all persons with rights to the trust assets or their income, regardless of whether those rights are fixed or distributions are at the trustee’s discretion (Explanatory report on LETO, p. 18). Discretionary beneficiaries of a discretionary trust are therefore also included. All beneficiaries who are identified by name at the relevant time must be identified (Art. 6 let. a LETO). A person who can acquire a right only upon the occurrence of a condition precedent or after the expiry of a period need be identified only once the condition has occurred or the period has expired (Explanatory report on LETO, p. 18).

If the trust deed does not specify individual beneficiaries but instead defines a class of persons, it is sufficient to describe unambiguously the group of potential beneficiaries by class (Art. 6 let. b LETO). The company then does not have to identify every potentially entitled person (Explanatory report on LETO, p. 18). The Dispatch gives “persons in need in City X” as an example of such a class, but states that a description such as “the settlor’s children” is not a class in this sense (Dispatch, BBl 2024 1607, p. 111). In such cases, banks identify by name the persons who are already alive (SBA Commentary on the CBD 20, p. 58). If a beneficiary is itself a legal entity, the natural persons who ultimately control it must be identified (Explanatory report on LETO, p. 18).

Who controls the trust by other means

LETO specifies the residual category for other controlling persons (Art. 15 para. 1 let. e LETA). Control over a trust may be exercised, on the one hand, through a chain of control and, on the other hand, by a person who determines who may exercise control over the trust (Art. 5 para. 1 LETO). The latter applies where a person, alone or jointly with third parties, has the right or actual ability to dispose of or invest the trust assets, decide on or approve distributions, add or remove beneficiaries, appoint or remove trustees, or terminate or revoke the trust (Art. 5 para. 2 LETO).

Such powers may arise from the law, the trust deed or a purely factual situation (Explanatory report on LETO, p. 17). By contrast, third parties that merely manage the trust assets operationally, such as asset managers or banks, are not covered, because the power to invest refers to the fundamental decision rather than day-to-day implementation (Explanatory report on LETO, p. 18). The explanatory report also gives an illustrative example of control through a chain. If a person designated as a beneficiary is in fact acting in a fiduciary capacity for a related person to whom the distributions flow, that related person is the beneficial owner of the trust (Explanatory report on LETO, p. 17).

Where a company is the trustee

Often, the trustee is not a natural person but a trustee company. A company can, however, never itself be a beneficial owner (Art. 4 para. 1 LETA). It is replaced by the natural persons who control the trustee company (Art. 15 para. 1 let. e LETA). The explanatory report illustrates this with B Ltd, which is 100 per cent owned by shareholder A and has been appointed trustee of Trust C. In this case, A is the beneficial owner both of B Ltd and of Trust C (Explanatory report on LETO, p. 17). A holding of more than 50 per cent in the company acting as trustee is decisive (Explanatory report on LETO, pp. 23–24). The same applies if another role within the trust, such as the settlor or a beneficiary, is performed by a legal person (Art. 15 para. 1 let. e LETA).

This look-through approach may result in more persons being listed in the transparency register than a bank documents under the CBD 20. Financial intermediaries do not have to report as discrepancies differences resulting from the differing rules of anti-money-laundering legislation (Art. 56 let. a LETO; Explanatory report on LETO, p. 43).

How the trust is represented in the chain of control

As a general rule, a company only has to obtain information on the chain of control if there are at least two levels between the company and the beneficial owner (Art. 15 para. 1 let. a LETO). A stricter rule applies to trusts. As soon as the chain of control includes a trust or a fiduciary arrangement, information on the chain must always be obtained, regardless of the number of levels (Art. 15 para. 1 let. b LETO; Explanatory report on LETO, p. 23). The reason is the increased risk that such structures, which are often cross-border, may be used to conceal the identity of the beneficial owners (Explanatory report on LETO, p. 23).

For the trust itself, the company must obtain the following information (Art. 15 para. 2 let. d LETO):

• the name of the trust, the law applicable to it and, if available, the UID or an equivalent foreign identification number,

• the identification details of the trustee and of any other beneficial owners of the trust, as well as their role in the trust,

• whether the trust is discretionary.

The trustee’s details are required in all cases because, as the holder of legal control over the trust assets, the trustee occupies the central role in the trust structure (Explanatory report on LETO, p. 23). For natural persons, the identification details comprise surname and first name, date of birth, nationalities, and municipality, postal code and country of residence. If a person does not have a Swiss social security number (AHV number), a copy of that person’s passport, identity card or Swiss foreign national identity document must also be obtained (Art. 10 LETO). If the trustee is a company, its company name, legal form, registered office and UID or an equivalent foreign number must be recorded (Art. 11 LETO). If additional legal entities, such as an underlying company, lie between the trust and the reporting legal entity, they must also be recorded with their details as legal entities (Art. 15 para. 2 let. b LETO).

The example in the explanatory report

The annex to the explanatory report on LETO contains an example illustrating the basic case (Explanatory report on LETO, Annex 1, no. 2.6). Person 4 established Trust B; Persons 1 to 3 are its beneficiaries. Person 5 administers the trust as trustee and holds 100 per cent of the shares in A Ltd for the trust. A Ltd is therefore controlled 100 per cent by Trust B. The beneficial owners are the settlor, the trustee and the three beneficiaries, i.e. five persons in total, all of whom indirectly control A Ltd. For each of them, the extent of control reported is the ownership interest in A Ltd held for the account of the trust, i.e. more than 75 per cent. Although there is only one level between these persons and A Ltd, A Ltd must report the trust as an element of the chain of control.

Report by A Ltd in the example from the explanatory report, supplemented by the information under Art. 15 para. 2 let. d LETO

Where an underlying company is interposed

Often, the trust’s ownership interest does not lead directly to the Swiss company but through an underlying company. Assume that the trustee holds all the shares in a foreign holding company for the trust and that the holding company holds 40 per cent of Swiss A Ltd. The holding company holds at least 25 per cent of A Ltd, and the trust holds more than 50 per cent of the holding company (Art. 2 para. 2 LETO). The beneficial owners are again all persons under Art. 15 para. 1 LETA. They are reported with an extent of control of at least 25 per cent and no more than 50 per cent, because the holding company’s direct holding in A Ltd is decisive (Art. 13 para. 1 let. a and para. 3 LETO). The chain of control shows the holding company with its details as a legal entity and the trust with the information under Art. 15 para. 2 let. d LETO (Art. 15 para. 2 let. b and let. d LETO).

Borderline cases that raise questions in practice

Two situations regularly cause uncertainty when trusts are recorded. The legislative materials do not address every detail, which is why some of the classifications below are derived from the wording and structure of the Act and the Ordinance. Where this is the case, it is expressly stated.

A trust without a trustee

A trust without a trustee cannot be represented in the transparency register. The Act lists the trustee as a separate role among the beneficial owners (Art. 15 para. 1 let. b LETA). For every trust in the chain of control, the Ordinance requires information on the trustee, while referring to the trust’s remaining beneficial owners as “any other” beneficial owners (Art. 15 para. 2 let. d no. 2 LETO). The explanatory report explains that trustee information is required in all cases because the trustee holds legal control over the trust assets (Explanatory report on LETO, p. 23). There is also a structural reason. Because the trust has no legal personality, someone must legally hold the ownership interest in the company, and that person is the trustee (Explanatory report on LETO, p. 17).

If the review does not identify a trustee, the conclusion should therefore not be that there is a trust without a trustee, but that the review is incomplete. The company must determine who actually holds the shares and request the necessary information and evidence from the shareholder and the persons involved in the chain of control (Art. 7 para. 2, Art. 13 para. 4 and Art. 14 para. 3 LETA). If this is unsuccessful, the company documents that fact and the steps taken and states in the report that the identification was unsuccessful, together with all relevant information available to it (Art. 8 para. 2 and Art. 9 para. 3 LETA; Art. 21 LETO). This must be distinguished from a trust whose trustee is a company. In that case, there is no absence of a trustee; the trustee is simply not a natural person. The trustee company is looked through to the natural persons who control it (Art. 15 para. 1 let. e LETA).

A trust without beneficiaries

The first step is to determine whether there truly are no beneficiaries. Transparency law interprets the term broadly. Discretionary beneficiaries are also included and, where the trust deed does not name individuals, the group of potential beneficiaries described by class takes their place (Art. 6 LETO; Explanatory report on LETO, p. 18). A trust whose beneficiaries will only be determined in the future or are described only as a class is therefore not a trust without beneficiaries.

Genuine cases without any beneficiaries exist in the case of purpose trusts, known in English as Non-Charitable Purpose Trusts. They do not serve specific persons but a defined purpose (SBA Commentary on the CBD 20, p. 59). Enforcement of that purpose is often entrusted to a special person, the so-called enforcer. Neither the Ordinance nor the explanatory report expressly addresses purpose trusts. The following can, however, be inferred from the structure of the rules. If there are no beneficiaries, that category remains empty (Art. 15 para. 1 let. d LETA), but the other roles remain unaffected. The settlor and the trustee remain beneficial owners (Art. 15 para. 1 let. a and let. b LETA). In the case of the enforcer, it must be assessed whether that person has been appointed as protector or has powers under Art. 5 para. 2 LETO, such as the right to appoint or remove trustees. If either applies, the enforcer is a beneficial owner as protector or as another controlling person (Art. 15 para. 1 let. c and let. e LETA). The absence of a group of beneficiaries therefore never means that the trust as a whole falls outside the identification process.

For their own purposes, banks go one step further. According to the Swiss Bankers Association’s commentary on the CBD 20, in the case of a purpose trust it must be assessed in each individual case whether persons benefit economically, directly or indirectly, from the stated purpose, and such persons are treated as beneficiaries. If a purpose trust holds an ownership interest in an operating company in order to preserve its continuity, banks treat that company as a beneficiary and identify the persons controlling it (SBA Commentary on the CBD 20, pp. 59–60). Whether this approach can be transferred to LETA remains open. The legislative materials on LETA do not address the issue, and the reasoning leads to a circularity where the beneficiary company is precisely the reporting legal entity whose shares the trustee holds for the trust. It is therefore advisable to analyse carefully the purpose and the powers of all persons involved on the basis of the trust deed and to document the classification adopted and the reasons for it (Art. 8 para. 1 LETA).

No fallback to the most senior member of the governing body

In hard-to-understand trust structures, it may seem natural to report the most senior member of the governing body as the beneficial owner on a subsidiary basis. However, this fallback solution applies only if no person meets the criteria for beneficial ownership (Art. 4 para. 2 LETA). If a trust holds a significant ownership interest, there is always at least one beneficial owner in the form of the trustee or the persons controlling the trustee company. If the company fails to identify the relevant persons, this is therefore not a case for the subsidiary rule but a case of unsuccessful identification (Art. 9 para. 3 LETA). The most senior member of the governing body is then reported not as a beneficial owner but as the person required to provide information (Art. 21 para. 1 let. b LETO).

What the company and its board of directors should do in practice

Responsibility for reports to the transparency register lies with the most senior member of the governing body, even if that person delegates the task to other persons within the company or to third parties (Art. 12 LETA). Where an ownership interest is held through a trust, the company depends on the trustee’s cooperation. As shareholder, the trustee must report the beneficial owners to the company within one month after control arises and, upon request, provide the necessary information and evidence (Art. 13 paras. 1, 3 and 4 LETA). The beneficial owners and all third parties involved in the chain of control must cooperate with the verification (Art. 14 para. 3 LETA).

A structured approach is advisable. The company should request from the trustee an extract of the relevant provisions of the trust deed or equivalent confirmation of the roles within the trust, collect the information on each person required under Art. 10 LETO and record whether the trust is discretionary (Art. 7 para. 2 LETA; Art. 15 para. 2 let. d LETO). The information and evidence must be documented and retained for ten years after the person concerned ceases to be a beneficial owner (Art. 8 paras. 1 and 3 LETA).

Trusts are not static structures. Trustees are replaced, beneficiaries are added or cease to qualify, and conditions precedent occur. The company must report any change to a fact entered in the transparency register within one month after becoming aware of it (Art. 10 LETA). In turn, the trustee, as shareholder, must notify the company of any change to the reported information within one month (Art. 13 para. 5 LETA). Regular confirmation of the information by the trustee helps ensure compliance with these deadlines.

Especially in trust structures, Excel lists and email enquiries quickly reach their limits because several roles, classes of beneficiaries and intermediate companies must be represented and kept up to date at the same time. Konsento’s digital transparency register assistant guides users step by step through the legal assessment under LETO, also covers trust constellations, visualises the chain of control and generates the reporting data together with a documentation dossier.

Conclusion

A trust is not a legal entity and is not entered in the transparency register as a reporting legal entity. Nevertheless, it has far-reaching consequences for a Swiss company in which it holds a significant ownership interest. The beneficial owners are not individual persons with a particular proportionate entitlement, but all persons who perform a role in the trust or control it: the settlor, trustee, protector, beneficiaries and other controlling persons; where companies perform such roles, the relevant persons are the natural persons behind those companies. Each of them is reported with the extent of the direct holding in the company held for the account of the trust. In addition, the trust must always be reported as an element of the chain of control, together with the applicable law, the trustee’s details and whether the trust is discretionary.

The trustee is the constant element of every trust structure. If no trustee emerges from the review, the review is incomplete. If there are no beneficiaries, the other roles remain decisive, and in the case of purpose trusts the position of the enforcer warrants particular attention. Where the legislative materials do not provide an express answer, a carefully reasoned and documented classification provides the necessary traceability vis-à-vis the control authority and banks.

Record trust-held ownership interests correctly now

Check whether a trustee or trustee company is entered as shareholder in your share register, or whether the ownership interests of one of your shareholders are themselves held by a trustee for a trust. If so, it is worth clarifying the roles within the trust with the trustee at an early stage. With Konsento’s digital transparency register assistant, you can also record complex trust structures in a guided and traceable manner, make the chain of control visible and prepare the report to the transparency register.