Trust Formation
Trusts structured and set up in 8 jurisdictions, to protect assets, hold businesses, plan succession and manage family wealth over the long term.
Nimius Advisory helps corporate clients, family offices and private clients set up trusts in 8 jurisdictions. We run the whole process: we work out what the structure is for, handle the selection of the jurisdiction and the preparation of the trust deed, complete KYC and move the assets across.
In a trust, the settlor hands assets to a trustee, who holds and manages them for one or more beneficiaries. Depending on how it is structured, a trust can hold a business, protect assets, plan succession, manage family wealth or keep particular assets over the long term.
Which jurisdiction fits best depends on the kind of assets, what the structure is meant to achieve, where the parties involved are tax resident, the requirements for trustees and the local law that applies.
When a trust makes sense
Protecting assets
Placing assets in a trust gives their ownership a structure and takes them out of the settlor’s direct ownership. How well this works depends on the law of the chosen jurisdiction, when the trust is set up and the particular circumstances.
Holding a business
When the shares of an operating company go into a trust, the business can be owned and managed over the long term. Depending on the structure, the settlor may keep some influence through the trust’s terms, a protector or a letter of wishes.
For holding company shares there are specialised structures, among them VISTA trusts in the British Virgin Islands and STAR trusts in the Cayman Islands.
Passing wealth between generations
With a trust, you can set out in advance how assets will pass to future generations: the conditions for distributions, age requirements, or the stages at which beneficiaries take control of the assets.
Long-term or perpetual trust structures may be possible, depending on the jurisdiction.
Confidentiality
Many jurisdictions keep trust information off public registers, but a trust does not make anything completely confidential. Details of settlors, beneficiaries and assets may have to be disclosed under AML, CRS, FATCA, tax and other rules that apply.
Intellectual property and strategic assets
A trust can hold intellectual property over the long term, as well as stakes in investment and venture projects, works of art, real estate and other assets.
Managing family wealth
In a family structure, the trust can be paired with a protector, an advisory committee and a letter of wishes. Through them the settlor sets out principles for family wealth management and for how decisions are made as circumstances change.
The main kinds of trust
Discretionary trust
Within the terms of the trust, the trustee has some freedom to decide how income and capital are shared among the beneficiaries.
Fixed trust
The trust deed fixes the beneficiaries’ rights and how the assets are distributed from the outset.
Purpose trust
Set up to serve a particular purpose, which need not be tied directly to benefiting a specific individual.
VISTA trust
A specialised British Virgin Islands structure whose uses include holding company shares while keeping the trustee’s role in running the underlying business limited.
STAR trust
A specialised Cayman Islands structure that can be set up for beneficiaries, for specific purposes, or for both at once.
Asset protection trust
Designed to help protect assets, within the limits of the applicable law and provided there are no circumstances that could open the transfer of assets to challenge.
Charitable trust
Set up for charitable aims, or for other purposes the applicable law allows.
Trust jurisdictions compared
| Jurisdiction | Legal Framework | Regulator | Key Features |
|---|---|---|---|
| Jersey | Trusts (Jersey) Law 1984 | JFSC | Established trust industry, flexible structures and the possibility of establishing a Private Trust Company |
| Guernsey | Trusts (Guernsey) Law 2007 | GFSC | Flexible trust legislation and an established professional trustee infrastructure |
| Singapore | Trustees Act + Trust Companies Act 2005 | MAS | Established international financial infrastructure and professional trust services |
| Dubai, UAE | DIFC Trust Law No. 4 of 2018 | DIFC Courts / DFSA | Common law framework within DIFC and a specialised DIFC court system |
| BVI | Trustee Act + VISTA 2003 | BVI FSC | VISTA trusts can be used for trust structures holding shares in BVI companies |
| Cayman Islands | Trusts Act, Part VIII STAR | CIMA | STAR trusts for structures established for beneficiaries, specific purposes or a combination of both |
| Nevis | Nevis International Exempt Trust Ordinance | Nevis FSC | Jurisdiction for international trusts and asset protection structures |
| Cook Islands | International Trusts Act 1984 | Financial Supervisory Commission | Specialised jurisdiction for international trust and asset protection structures |
Choosing the right structure
- Tax residence. The structure has to reflect where the settlor and beneficiaries are tax resident and the rules of the countries they live in. For US clients, the reporting requirements for foreign trusts need separate consideration.
- Type of assets. For holding company shares, VISTA or STAR structures are options to consider. Certain investments, intellectual property and other assets may call for specialised trust structures. For particular asset protection goals, Nevis and the Cook Islands may be worth considering.
- Trustee and substance requirements. Depending on the jurisdiction, there may be rules on trustee licensing, the place of business, corporate governance and other aspects of substance.
- CRS, FATCA and disclosure requirements. Before an international trust is set up, the requirements for CRS, FATCA, beneficial ownership and tax reporting should be assessed. A trust structure is not meant for hiding assets or helping anyone evade tax.
How trust formation works
- Step 1
Strategy consultation
Together we set out what the structure is for, which assets and parties it involves and the main requirements.
- Step 2
Choosing the jurisdiction and trustee
We weigh up the jurisdictions that fit and find a suitable professional trustee.
- Step 3
Drafting the trust deed
The main legal documents are drawn up, setting the terms on which the trust operates.
- Step 4
Letter of wishes
If it is useful, a separate document can set out how the settlor would like the assets to be managed and distributed.
- Step 5
KYC and onboarding
The settlor, the beneficiaries, the trustee and the source of the assets all go through the required checks.
- Step 6
Transferring the assets
When the structure is in place, the assets concerned are moved into the trust by legal transfer.
- Step 7
Continuing support
We can help with the structure’s day-to-day administration and with coordinating the professional service providers involved.
Why Nimius Advisory for your trust
- 8 jurisdictions: one advisory process lets you compare several jurisdictions for your trust.
- Structural approach: we start from the client’s objectives and assets, not from a particular jurisdiction, and choose the trust structure to suit them.
- Experience with regulated structures: we know the requirements that apply to financial companies, asset owners and international structures.
Talk to us about your structure
Thinking of a trust to hold a business, protect assets, plan succession or manage family wealth? Get in touch with Nimius Advisory, and we will help you work out which structure and jurisdiction suit your objectives and the requirements that apply.