Investing for a child from abroad

I am not a Swiss resident but my grandson is and he is 2 yo.
Can I open an investment trust in his name?

I don’t have a specific answer, but someone else from this forum might. But to help you better, it would be helpful if you could describe what you want to achieve. Do you want to save for yourself or for your grandson? The former would not be a good idea. If it’s the latter, I would think carefully about whether you really want to do this. In many cases, it’s easier if you save under your own name and then give the money to your grandson as soon as he’s grown up (depending on the country, canton and amount, this may be tax-free). Otherwise, the money automatically belongs to him at 18, which can be a disadvantage if he’s not ready for it at 18.

I know people who would have been better off being given this kind of money when they were ~25. Before that, they would have simply spent the money on cars and alcohol.

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thank you for the quick answer.
I might not make it until he’s 18. I actually want him to have it for university.

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Does the grandson have parents too and are they resident in Switzerland?

To understand the situation better: do you want to avoid gifting this money to the child’s parents because you would not be sure that they are actually going to spend it on his university?

If yes, I think what might be possible is that parents open an investment account in the child’s name (the choice for these is much more limited than normal adult accounts but there are some, for example search for “child account” in this forum) and then you send the money directly to that account. The money will be in child’s name and can be used by the parents before he is 18 under certain conditions (ultimately it will be controlled by the banks and judges - so you might want to read a bit about that, to see if you feel they will sufficiently protect the child’s interests against parents’ interests or not).

If the legislative framework of your inheritance allows for it, maybe keeping the money but simply writing the grandson in your will does the trick? Then if you are still around - you will gift it personally, if you die before then - I believe the money then will need to go to an bank or investment account in child’s name (so it will force the parents to follow the situation described above)

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As a non-swiss resident, can I open an broker account for share dealing? I am UK resident.

Sure, if you can find a broker that will take you.

What efforts have you already made yourself to find out?

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I really don’t know where to start. first stop was here

The LLM of your choice is really handy for doing that digging (I did the same for Australia some months back). After you checked its answers personally, report back here. I’m sure someone will help you go over it after putting in that work.

what is LLM?

May I ask why you want a Swiss broker?

As a non-resident, this does not make sense in most cases. Swiss brokers are also more expensive in most cases. That is also the reason why most brokers do not offer this service, because there are too few customers for it, or only above a certain amount (private banking).

My grandson is Swiss resident - 3 yo - and I want to open an investment account for him to have it when he will go to university.

But your original post seem to imply that you want to open an account in your name, so it’s still not clear why the residence of your grandson matter? Just open an account in whatever country suits most your needs and when you will want to gift stuff to your grandson you will transfer him cash or stocks into his account (whatever that account will be)

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What happens if I open an account in his name? I don’t want him to take anything until he’s 18.

Is it even possible to open an account for a 3yo?

There are solutions such as:

The money/assets is blocked there until the child turns 18.

But parents must declare the assets on their tax returns. And I have no idea whether it makes sense to open such an account as a non-parent, or whether it is even possible :slight_smile:

How is the child portfolio taxed?
Until the child reaches the age of majority, the child’s portfolio is attributed to the parents for tax purposes. The separate, free e-tax statement is also available for download. To do so, click on the user menu in the top right-hand corner and select «Tax Statement».

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It won’t be blocked: it will be managed by the parents/guardians, they will be free to move it, invest in something else, or withdraw to buy stuff. In theory the parents will be able to spend the money only in the interest of the child and the bank/broker and the courts are supposed to enforce it. I don’t have insights into how well this works in practice.

OP wouldn’t need to open the account: parents would open it in child’s name and OP would just transfer funds there as a gift.

@dorin it is not clear what problem are you trying to achieve by having the funds kept in the child’s name. With respect to the most simple and straightforward approach (invest the money yourself, gift to grandson when you feel he is ready, add your grandson to your will to ensure the money is transferred in case you die before you gift the money) - what is not working in it for you and what are you trying to change?

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No, these are parents who have to open the account in child’s name. After that, anyone can deposit money into the account. And I am already looking forward to learn about fees related to money transfer from UK to a BLKB account.

@dorin : Investing in children’s name is really not optimal in Switzerland.