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A Portuguese resident settlor who appoints a trustee in Switzerland is, in practice, running a small three-way relationship: you, an adviser in Portugal who knows your tax and family position, and a trustee in Switzerland who holds and administers the assets. Most disappointments in this arrangement do not come from the trust deed. They come from information that never reaches the right person at the right time.
This page is about that flow. It does not set out Portuguese law or tax, which belong with a local adviser, and it does not compare jurisdictions. It describes what a Swiss trustee will ask of you, what it will ask of your Portuguese advisers, and how a first year usually unfolds.
What the trustee needs from you
Before a trustee accepts a trust, it has to know who you are, where the assets come from and what you want the trust to do. A regulated trustee in Geneva works under anti-money-laundering rules (the AMLA, or LBA in French), so these questions are not optional courtesies. Expect requests in three groups.
Identity and origin of the assets
You will be asked to document your identity, your residence in Portugal, and the source of the assets you intend to place in the trust. For a business owner this often means company records and evidence of a sale or of dividends. For an inheritance it means the estate papers. The trustee also needs to identify the beneficial owner in the sense used by banks, and the bank accounts of the trust will follow the same logic; see your trustee and the trust bank accounts.
Your objectives
A trustee cannot administer a purpose it has not understood. Be ready to explain who the beneficiaries are, where they live, whether any of them is a minor or vulnerable, and what you expect the trustee to do when a decision is hard. A letter of wishes is the usual place to record this, because it can be updated without amending the trust deed.
Your own powers
Many settlors want to keep some say: a right to be consulted, a power to remove the trustee, or a protector who can block certain decisions. The Hague Convention accepts that powers reserved by the settlor are not by themselves incompatible with a trust (Article 2). That does not make every reservation wise, and the way you keep control can change how a court or a tax authority reads the structure. Read settlor reserved powers and the trustee before you decide what to keep.
What the trustee needs from your Portuguese advisers
The trustee in Switzerland will not give you Portuguese tax advice, and it should not try. What it needs is a written position from someone who can. That position should answer questions the trustee cannot answer for you.
| Question for the Portuguese adviser | Why the trustee needs the answer |
|---|---|
| How will Portugal treat the transfer of assets into the trust? | It affects when and how the trust is funded |
| How will Portugal treat income and gains inside the trust while you are resident? | It shapes the reports the trustee must prepare for you |
| How will distributions to beneficiaries living in Portugal be taxed? | It guides how the trustee plans distributions |
| Are there Portuguese reporting duties for you or the beneficiaries? | The trustee can supply the data, but cannot file for you |
| How would a Portuguese court or authority look at the trust and at a Swiss trustee? | It bears on risk and on the choice of governing law |
| What happens if you cease to be resident in Portugal? | It links to planning for a settlor who moves country |
These are questions, not answers. The answers depend on your residence history, your nationality, where the assets sit and the type of trust. A serious adviser will ask for the draft trust deed before replying, which is one more reason to involve them early.
Who talks to whom
The diagram below shows the order in which information normally moves. The trustee is the hub for the trust; your Portuguese adviser is the hub for your personal position in Portugal. You decide what each of them sees.
A practical rule follows from this. Ask both sides to copy you, not each other, until you are comfortable with the mechanics. You then see where a request is stuck.
Governing law and recognition: what to flag
Two separate questions are often mixed up. The first is which law governs the trust. Under the Hague Convention, the trust is governed by the law you choose, expressly or by implication; if the chosen law does not know the trust, the choice has no effect and the law with the closest links applies instead (Articles 6 and 7). Those links include the place of administration, the location of the assets, the trustee's residence and the purposes of the trust.
The second question is whether a Portuguese authority will treat the trust the way the Convention expects. Under Article 13, a State need not recognise a trust whose significant elements are connected essentially with States that do not have the institution of the trust. Whether that provision matters for a Portuguese resident settlor with a Swiss trustee is a point for Portuguese counsel. Article 15 also keeps mandatory local rules in play, including those on family protection, succession rights and creditors. The practical conclusion: ask for a local opinion before funding, not after.
Switzerland itself has recognised foreign trusts since the Convention came into force for it on 1 July 2007, and the Federal Office of Justice confirms this. Recognition in Switzerland is therefore not the open question; recognition and tax treatment at your end are.
Swiss tax: only the outline
The Swiss federal circular on trusts distinguishes trust types, and the answer for you depends on the type. In a revocable trust the assets and income stay taxable with the settlor at the settlor's place of residence. For an irrevocable discretionary trust, where the settlor was domiciled abroad at the time of creation, the assets are attributed neither to the settlor nor to the beneficiary under that circular. That statement concerns the Swiss position only. It says nothing about how Portugal taxes you, and it should never be read as a conclusion for a Portuguese resident. Your Portuguese adviser and the trustee need to compare notes on both.
For the structure types themselves, see the trustee of a discretionary trust and the trustee role in revocable and irrevocable trusts.
An example first-year calendar
The example below is an illustration, not a timetable. The sequence is more important than the exact dates, which depend on how quickly documents and approvals arrive.
Example: a family from the Algarve, with a business they plan to sell, appoints a trustee in Geneva.
| Stage | What happens | Who acts |
|---|---|---|
| Opening discussion | Objectives, beneficiaries and a first view of the assets | Settlor and trustee |
| Local review | The Portuguese adviser reads the outline and states the local position | Portuguese adviser |
| Onboarding | Identity, source-of-assets and beneficial-owner documents are checked | Trustee |
| Drafting | Trust deed, governing law and powers are settled with counsel | Trustee, counsel, settlor |
| Letter of wishes | Written guidance for the trustee is prepared | Settlor |
| Funding | Assets move in the order both advisers confirmed | Settlor, trustee, banks |
| First report | The trustee sends a statement of assets and decisions | Trustee |
| Mid-year contact | Review of changes in family, residence or assets | Settlor, both advisers |
| Year-end data | The trustee supplies figures needed for the settlor's local filings | Trustee to Portuguese adviser |
| Annual review | Compliance, objectives and the letter of wishes are revisited | Trustee, settlor |
The last two rows connect to the yearly compliance review by your trustee. If something goes wrong in the first year, the fastest remedy is usually a missing document, not a legal argument.
Mistakes specific to cross-border settlors
- Funding the trust before the local adviser has confirmed the position.
- Giving the Portuguese adviser and the trustee different descriptions of the same assets.
- Assuming the trustee will file in Portugal on your behalf.
- Forgetting to tell the trustee about a change of residence, nationality or marital status.
- Leaving the letter of wishes unchanged after a family event.
The wider list is in common mistakes with an existing trustee. If you are still choosing, how to choose a trustee in Switzerland sets out a method.
Frequently asked questions
Does a trustee in Switzerland give Portuguese tax advice?
No. A trustee can explain how the trust is administered and what information it can produce. Portuguese tax treatment of you or your beneficiaries is a matter for an adviser qualified in Portugal. The trustee will usually ask for that adviser's written position.
Is the trust recognised in Switzerland if I live in Portugal?
Switzerland has recognised foreign trusts since the Hague Convention came into force for it on 1 July 2007. Your residence does not change that. Whether Portugal treats the trust in the same way is a separate question for Portuguese counsel.
Which law will govern my trust?
Normally the law you choose, expressly or by implication. If that law does not know the trust, the choice has no effect and the law with the closest links applies. Counsel chosen for the governing law will explain the options.
Can I keep control of the trust as the settlor?
Reserved powers are not incompatible with a trust under the Convention. They can still affect how the structure is read by others, so the balance between control and independence deserves advice from both sides before the deed is signed.
What documents will the trustee ask me for?
Proof of identity and residence, evidence of where the assets come from, information on beneficiaries, and the draft documents. Gathering them early avoids most delays.
What happens if I stop living in Portugal?
The trustee should be told at once. The effect on tax and reporting depends on where you move and on your Portuguese position at that moment, so your local adviser should be involved. See also the page on a settlor moving abroad.
How are the trustee's charges set?
They depend on the structure and the work involved, and are given after the confidential assessment. The models are explained in how trustees are paid.
Sources
Considering a trust, or reviewing one?
Describe your situation in a few lines. A Geneva-based trustee reviews it in confidence and replies in writing.