Small family office

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: https://www.akzug.ch/online-schalter/online-berechnungen/berechnung-der-ahv-beitraege-fuer-einen-arbeitnehmenden/

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.

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