Small family office

Hello all,

Has anyone had an experience of setting up a small family office? I am interested specifically in the canton of Zug.

What are the costs involved and other key considerations, such as taxation and regulation of family offices?

I will appreciate any pointers in the right direction!

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I’m living in (and loving) Zug. I don’t have experience with starting a company here, but I’m definitely interested, as one of my post-FI dreams is to run a mustachian “wealth management” cooperative to help normal folks get to FI in the most optimal way. So I’m also interested in what other people have to say about tax and regulation implications of starting such business here.

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Could you give a description of the activities and clients you had in mind for the business? Generally speaking, of course (subject matter). This would help.

i actually thought also this direction. however, i found it conflicts 180° with my ideals: low cost stuff. suppose i manage wealth and have it “low cost”, i.e. take 0.1% p.a., i’d have to manage ~CHF 500’000’000 to make a tiny living from it. risks not accounted for… and if i charge 0.5%, then there are established players who do a more professional job than i do^^

Hello all, thank you for your comments. In terms of activities, typical asset management, managing my own and my family money, no external clients, so researching companies and deciding which stocks to buy, then selling when believing it’s time to sell, also of course asset allocation, in terms of asset classes (stocks, bonds, commodities), industries and geographies. My understanding is that while there will be company expenses, there are tax advantages when investing through a company rather than as a self-employed investor/trader. So I wonder if anyone could share a personal experience of setting up a small family office in the canton of Zug? Any comments are very much appreciated!

Well, here are my 2 cents. If you want the advice of a real tax lawyer, you have to cough up more (edit: to pay somebody else).

I assume you are under the normal taxe regime, neither at source (Quellensteuer) nor in another special tax situation.

For the administration of your securities by third persons, securities held in your private property, you obviously just have this flat rate of between 0.3 and 0.5% up to a certain limit (5k?). After that and according to a newer court decision, you have to itemize. If the deductible costs are not well enough separated by the financial institutions, we can forget it.
The fact that you pay your own GmbH to do this does not change the deductions for you. It just creates administrative hassels with the taxation of the Gmbh, the books, the taxes and social security paymens on wages etc.

So what if you put your securities into the GmbH? Then you have still the described hassle, but you can deduct all expenses from earnings. Unfortunately, capital gains become taxable in a company. And all gains that you receive from the company will be taxed again (maybe as privileged dividends) in your declaration.

Let’s assume you wanted to deploy some capital for risky crowdlending at higher rates. There, the company would allow you to compensate losses from one credit with gains from another. And credit income is taxable anyway. Plus you could pay certain expenses at least partially over the company(phone/compuyer). It could make sense.

This is what I know.

Thanks for sharing your thoughts!

Setting up the company is straightforward.
In Zug the company will be taxed at about 12% if the planned Tax Reform III is ever going to be approved.
There are a few little tax tricks for companies, like special provisions, but it’s peanuts.

Things you need to be aware:

  1. If you manage your own and your family money, you should be exempt from Anti Money Laundering Law (GeldWaschereiGesetz). Otherwise it’s a pain and this is very serious stuff, you need to register with a SRO (e.g. VQF) get audited / submit annual declaration / do some training or hire a AML consultant…
  2. If you have assets of more than 10million in the company, the company will have to register as a securities dealer for stamp duty, and fill quarterly forms.
  3. The tax advantages of investing through a company are mainly:
  • dividends from investments worth 1 million or more (held for 1 year at least) are tax free (but you may incur foreign non-reclaimable withholding taxes, e.g. 15% in US)
  • fixed income is more efficient in a company, you would pay only 12% in Zug (assuming the Tax Reform III gets approved…)
  • you can defer taxation on some income.
  • you can smoothe your income at your convenience.
  • you don’t risk getting caught and taxed as a Professional Securities Dealer (Gewerbsmässiger wertschriftenhandel)
  • if the amount of money is significant, through a company you don’t get caught by US estate taxes (it’s a potenital issue until the Double Taxation Agreement CH-US is updated).
  • you can expense the costs of doing research.
  1. the disadvantages of investing through a company are:
  • companies pay tax on capital gains, whereas natural persons don’t (within limits)
  • double taxation when you take the money out of the company, but it depends if/when/from where you plan to take money out and where is the money now (personal account or a company?).
  • there could/probably will be a tax liability getting out of the structure (money out of the company), google for Transponierung / Indirekte Teilliquidation / Verkauf eines vollen. Portemonnaies. For this you need high level, expensive tax advise.

I’ve been assuming that the money to be invested is in the Swiss Company, but that might not be the most efficient solution. Maybe an offshore company advised from the Swiss Company is more efficient (you might get a tax ruling on this).
a lot of the tax considerations depend on where you are going to invest (geography, equity, fixed income, real estate) and how often you turn over.
If the money is now in a foreign company that you bring to CH, it is probably possible to create some reserves that can be paid out tax free (subject to changes in legislation…).

If the money is not in the company, and you just use the company to advise yourself/family and you live in CH VAT is due on the fees… 7.7% now, going up probably… if the customers are foreigners you get away with 0%, but still need to register for VAT.

Of course if you pay yourself a salary, there are AHV and all the rest due:

Zug might not be the best location and company might not be the best solution. For natural persons the income from investments is taxed only at 80% of the normal tax rate in Nidwalden (for kantonal taxes only) and the tax on assets is much lower than in Zug.


Regarding company overhead expenses it depends a lot from what is going on in the company and from the provider (there are cheaper and gold plated).
You’ll have:
cost of keeping accounts
cost of preparing annual tax declaration
calculating salary and handle AHV payments
then potentially VAT, Stamp Duty compliance

If you want my guess for all of the above excluding Stamp Duty (which you could do yourself) it would be 3-5k CHF depending on provider and number of transactions/billings.

If you can opt out of being audited (if your other partners/investors don’t mind), you save 10k CHF for an audit (Revision). You do it when you set up the company (Verzicht auf Revisions, Opt-out).

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