Leo Trust is a pioneer in planning and implementing trust structures which incorporate crypto assets. In this interview, Dimitar Jauch, CEO of Leo Trust, talks about the advantages, risks, and costs of such structures. He also answers questions about the complexity and adaptability of these structures – and covers data security, estate planning, speed to market as well as philanthropy.
I have a range of interests in the crypto world: mining, bot trading, NFT, own cryptocurrency etc. Now I want to unite my crypto assets under one roof and fully exploit their potential. Is Leo Trust the right place for me?
Dimitar Jauch: Absolutely. Leo Trust is a market leader in the planning, formation, and management of both corporations and trusts. We offer a multidisciplinary, dynamic team consisting of trust specialists, tax experts, lawyers, asset managers, and wealth planners. This is combined with 40 years of experience as a financial service provider. During the past 10 years, we have branched out into crypto asset-based services. But to know exactly what you need, we must learn more about you.
Gladly, but what exactly?
Every client’s situation is new for us and, accordingly, we start from scratch. This is the only way to construct the perfect, bespoke solution for that client. But to come back to your question, we undertake detailed discussions with the client to identify that client’s exact requirements, ideas, and wishes.
OK. Speed to market, discretion, scalability, security, cost, and philanthropy are all important to me. And my structure must be adaptable going forward.
(Laughs) Is that all? Well, the more information you can provide, the better. This includes not only hard facts, but also information about your personal preferences. Each of your requirements is important, and the perfect solution will combine all of your requirements.
Well, I am Swiss, have no direct descendants, and can count on a loyal crypto community. Tokens already exist and are widely held. My family and I are the shareholders of a company. This company offers various services and is remunerated for these services in tokens. However, I would prefer not to hold these shares directly. Can a trust structure help with this?
Trusts are an excellent means of holding different assets, including crypto assets. A trust is a fiduciary relationship usually recorded in a document known as a trust deed or instrument. In a trust, assets are transferred from an owner (the settlor), to a trustee, and held for the benefit of a third party (the beneficiary). There may also be an enforcer or protector involved with the trust, depending on the jurisdiction. The enforcer/protector supervises the trustee, to ensure the trust deed/instrument is complied with. Using a trust means that you would no longer hold the shares in the company but would be able to benefit from them. It also provides a degree of confidentiality.
Crypto assets are considered a «black box» by many and each country has its own laws regarding them. How do I know today what will be legal tomorrow?
As I said, we have been involved in the crypto world for many years now. We have genuine experience in areas such as crypto currencies advisory, crypto asset management, and crypto assets forming part of a person’s estate. These services are used by private as well as institutional investors, and family offices. In other words, we have long believed in crypto assets, and our experienced in-house compliance team monitors a wide range of jurisdictions for issues relevant to crypto assets. We follow global events closely, including actual and proposed legislative changes. Also, as dynamic as the crypto world is, new laws are not introduced overnight.
And how do trust structures operate in terms of scalability and speed to market?
One structure could be: underlying Liechtenstein special purpose vehicles, then a holding company domiciled in the British Virgin Islands (BVI), with the shares in the holding company held by a Jersey-law trust with a Swiss trustee. The Principality of Liechtenstein, BVI, Jersey – these are all crypto-friendly jurisdictions. At present, crypto assets are unregulated in each of these jurisdictions. This means we don't have to go through any tough licensing procedures, meaning you don't lose time in starting your business. The ideas you mentioned earlier can be integrated into this structure. There is considerable flexibility as in each of these jurisdictions, company formation and liquidation can be done in a matter of days. As I briefly mentioned earlier, we are closely monitoring events in countless jurisdictions. We know when and where we need to react, or rather, act, if changes are imminent.
How does «non-regulated» fit with my need for security?
Non-regulated does not equate to wild west lawlessness. In the BVI, for example, we must comply with SIBA (Securities and Investment Business Act), with FATCA (Foreign Account Tax Compliance Act), and with FMSA (Financing and Money Services Act). There are regulatory requirements, such as BOSS (Beneficial Ownership Secure Search System Act), to add to that. The list could easily go on – not to mention our in-house due diligence.
Your proposal includes multiple jurisdictions. Does it have to have more than one?
Each jurisdiction has its own advantages. Jersey, as well as Liechtenstein and BVI, to stay with our proposal, are «pro cryptos», as indicated. Further advantages of these jurisdictions are efficient company formation, as well as low formation and administration costs.
Cost is a good keyword – what can I expect?
Every solution is different. A reliable, general cost estimate is not possible. We attach great importance to transparency, including the transparency of our costs. However, to give you a general idea, we recently developed and implemented a similar solution with initial costs of around 60,000 Swiss francs. In addition, there were annual maintenance fees of around 20,000 Swiss francs and a further 10,000 Swiss francs p.a. payable in relation to the enforcer. But please note, the cost framework varies from solution to solution.
That seems expensive to me!
You want security, discretion, flexibility – to name just a few of your requirements. From the moment the contract is signed, Leo Trust deals with everything required. We represent you in foreign jurisdictions, go through all necessary approval procedures, negotiate contracts, establish companies, appoint appropriate company officers, and ensure these officers understand all their responsibilities. Last but not least, we undertake responsibility for the tax optimization and relevant tax filings of the structure. As you might expect, this can be extremely complicated.
Security, discretion, flexibility – how exactly does this solution pay off?
To pick up where I left off, the tax situation gives you a certain degree of planning and financial security. If such a structure were implemented at present, tax would only be payable on distributions from the trust. The proposed structure also offers a certain degree of confidentiality as you are not named as a shareholder of the SPV. A further option is to have a Swiss lawyer as the enforcer of the Jersey purpose trust. This means that the trust benefits from Swiss legal certainty and from Switzerland’s other advantages as a «safe haven». The fact that many project companies can be established or liquidated under the parent holding company increases entrepreneurial freedom and offers flexibility. Speaking of entrepreneurial freedom, this crypto-trust structure allows you to operate across your existing markets and branch out into new ones. You can position yourself nationally or internationally and attract attention from all kinds of potential stakeholders.
And how do you fulfill my philanthropic aims?
The purpose of the Jersey trust is to establish and develop your crypto ecosystem. However, it may have a further, charitable purpose. As you say, you have no direct descendants and you value charity. One of the purposes of the trust can be to benefit a charitable foundation, for example, the Leo Future Foundation. This Swiss foundation for children focuses on a wide variety of charitable projects in the areas of education, scholarships, health, research, etc. In this way, you have settled part of your estate and are doing something laudable by giving a certain part of your wealth to a charitable institution.
How do you ensure that the purpose is met?
Once the assets have been transferred to the trust, the trust instrument is authoritative. In its function as trustee, Leo Trustees LLC must manage the transferred crypto assets appropriately. Trust law requires that the provisions of the trust instrument are complied with. This is reinforced by the protector – or, as in our Jersey trust solution, the enforcer, who would be a Swiss lawyer.
And what about data security?
Leo Trust Switzerland is a Swiss financial service provider headquartered in Zürich. Although we have a global presence, the data is located here in Zurich, and we have – generally said – data sovereignty. Swiss legislation is exemplary in this regard, and this is one way in which Switzerland lives up to its role as a safe haven.
What makes me different from a typical trust client?
(Laughs) Nothing. But let me explain. Our clients couldn't be more different, and they are scattered all over the world. One client is a top athlete and has a trust structure for his income, for example, from sports and advertising contracts. Another has an art collection and a fleet of vintage cars – and an appropriate solution for these assets. A third owns real estate and securities portfolios. But what unites the «normal» trust client, and the crypto trust client is forward-looking wealth planning. That's exactly what our services are made for.
Speaking of looking ahead, I might also want to start a family in the future. How does that affect the proposal?
As I said, trust structures are flexible and can be adapted. This also applies to your proposal, which can adapt to fit legal and regulatory circumstances. It can also adapt to changes in your personal circumstances. And here you can see how important it is that we understand every aspect of your personal requirements.
_
This article is aimed at providing a general overview and summary of the issue. It is non-binding, and does not and should not be taken to constitute legal advice.
Leo Trust Switzerland AG is bronze sponsor of this year's STEP ALPINE CONFERENCE
The long-awaited updated of Leo Trust Switzerland’s Economic Substance & Beneficial Ownership Reporting general overview of various jurisdictions is available.
This article describes key changes in the new Swiss inheritance law, including some examples.
The Role of the Board of Directors and Management in Sustainable Value Creation
We are very pleased to announce that Leo Trust Switzerland AG has won for the second time in a row at the prestigious Swiss Wealth Briefing Awards 2023 in the Private Client Category Best Institutional Trust or Fiduciary Company.
The authors of this article review the 78 submissions presented on 475 pages to the Swiss Federal Government in Italian.
In this article, Dr. Strobl explores the growing importance of smart contracts and the significant growth in the Crypto Valley, which is gaining importance.
COVID-19 has had a profound impact on family businesses, especially with respect to operations, investments, digital money and the coaching of the next generation.
It is time to raise the awareness of the UK’s registers that it has put into place and intends to introduce regarding beneficial ownerships, which refers to the person who ultimately owns or controls an asset such as a property or a company and may differ from the legal owner. The purpose of beneficial ownership registers is to prevent individuals from being able to hide assets and income on which they own tax.
Popular holiday destination or major international financial centre? Both, says Harris Makriyiannis. The Managing Director of Leo Trust Cyprus talks also about services, products, the future – and eco-label awarded beaches.
Digital assets are increasingly becoming a fixed portfolio component of a demanding international clientele. In terms of effective estate planning, however, digital assets still lead a wallflower existence today.
Asia Outbound, designed to assist corporate structuring, asset protection, and immigration service providers, is one of the most trusted resources for Asia’s business and investment leaders. Leo Trust was not just attending this year’s Asia Outbound Summit in Dubai but participating with various key-note speeches.
What Leo Trust specialised in a few years ago was a much-discussed topic at this year's World Economic Forum: Non-Fungible Tokens, NFT. Leo Trust shed light on the fascination of NFT from an investment perspective at the WEF in Davos – and captivated the numerous guests with a live tokenization of a work of art.
Trusts have become an integral part of international wealth structuring and estate planning. Switzerland does not yet have its own trust law. Nevertheless, in 2018 the Federal Council was mandated to create the legal basis for a Swiss trust to strengthen Switzerland as a financial centre. But what is the situation today and what does the future hold?
Interlaken was calling. A delegation of Leo Trust Switzerland participated this year’s STEP Alpine Conference and talked, amongst others, about the impact of the COVID-19 crisis on the private client industry and provided insights to more than 300 participants.
At Leo Trust’s special event, special investigator of the Kantonspolizei Zürich, Adrian Leuzinger, appeared in front of a «full house». The deputy head of the task force did not, of course, go into the tactical and technical procedures of the police, but nevertheless revealed a great deal.
Switzerland's flat-rate taxation is an attractive tax model for wealthy foreign individuals. The approved flat-rate taxation, also called «lump-sum», «golden visa» or «tax ruling», is at the same time a residence permit. But beware: Requirements, handling, assessment bases etc. can vary from canton to canton. Moreover, not every canton offers this tax model.
Trust is an integral part of customer relationships and services, including digital services. But what are trust factors, what about the charter of trust – and what role plays artificial intelligence?
Didn’t you always want to know what sets Leo Trust apart from its peers? How Leo Trust masters the challenging environment? Be ready for some key insights.
Thanks to client-centric and trust-based strategy, first-class service quality, committed interdisciplinary teams of trust experts and the optimal position to provide highly complied crypto currency services – Leo Trust Switzerland wins the WealthBriefing Swiss Awards 2022 in the category «Institutional Trust or Fiduciary Company».
Investors and trustees need a clearer assessment of their investment risks, which calls for new risk assessment models and tax regulations for crypto assets.
In 2022, Panama will enforce two new obligations on entities: exclusively asset holding companies will be subject to the requirement to maintain accounting records going back five years, and both «commercial» entities operating outside Panama and exclusively asset holding entities will be obliged to submit annual accounting records to their Resident Agents.
On 15 October 2021, Cyprus approved the «Strategy for Attracting Businesses for Activities or/and Expansion of their Activities in Cyprus». With various key proposals, this action plan offers significant advantages for investors in Cyprus – and shows how Cyprus is becoming ever more business friendly.
Leo Trust’s CEO, Dimitar Jauch, reviews the past year and gazes into the future to predict what the new year promises for our crypto offering.
Forward-looking asset management includes estate planning. If assets are inherited on death or given away during the donor’s lifetime, inheritance or gift taxes are incurred. It is possible to reduce the tax burden by making a gift during your lifetime, with a usufruct.
Leo Trust is a pioneer in planning and implementing trust structures which incorporate crypto assets. In this interview, Dimitar Jauch, CEO of Leo Trust, talks about the advantages, risks, and costs of such structures. He also answers questions about the complexity and adaptability of these structures – and covers data security, estate planning, speed to market as well as philanthropy.
Economic Substance Act, Beneficial Onwership Act, possible sanctions, deadlines ... Are you keen on some insights on Bahamas, Belize, B.V.I., Cayman Islands, Marshall Islands Panama and Cyprus?
Polo sport is interdisciplinary, sophisticated, strategically challenging and racy. On top of that, it is synergizing tradition and innovation. No wonder we were excited to be part of the Patrons Cup.
Congratulations to Accuro Fiduciary, the winner of the STEP Private Client Awards 2021/2022 – category trust company of the year (midsize firm).
What may lead to a loss of trust between Swiss family offices and Swiss financial institutions and how it may be restored.
Leo Trust Switzerland has been shortlisted in the category of trust company of the year (midsize firm) in the prestigious STEP Private Client Awards, which highlights excellence among private client advisors in the international trust and financial services industry.
In front of around 25 select onsite attendees and 30 online participants, six experts guided the listeners through specific highlights such as state-of-the-art estate planning, asset management with cryptocurrencies, asset protection based on a real life case study with savvy take-aways and the evolution of corporate services in the new global tax environment.
Leo Trust hosts a wealth planning seminar for Chinese HNWI. Lauren Nan, Relationship Manager Key Clients at Leo Trust, will show how Chinese families in particular can diversify, protect and grow their wealth.
Leo Trust Switzerland AG is a globally active financial services provider for 40 years, offering a variety of services for institutional and private clients. However, the business is changing. On the one hand, due to constantly changing regulatory standards and laws; on the other hand, due to digitalisation, globalisation and highly specific client expectations.
Leo Trust Switzerland AG is a globally active financial services provider for 40 years; with a broad spectrum of services for institutional and private clients. Since April, the operational management company based in Zurich has been overseen by the 31-year-old CEO Dimitar Jauch. In this interview, he talks about changes in the competitive environment, where and why the digitalisation of the business makes sense, the balance between the tried and tested and change - but above all about why Switzerland has a future as a financial centre.
