Wealth Structuring Tools

What is a trust?

A trust is a legal instrument of Anglo-Saxon origin used for the management, protection, and transmission of assets. The structure is based on the separation of formal ownership and economic benefits: a person (the settlor) transfers certain assets to a trustee, who administers them for the benefit of one or more beneficiaries, according to the rules established in the trust deed.

The trust therefore allows the creation of an estate separate from the personal assets of the trustee and the settlor, intended for the pursuit of specific purposes.

Although the trust originated in common law systems, it is now also recognized in civil law countries thanks to the 1985 Hague Convention, ratified by numerous European jurisdictions, including Italy.

 

When to use

The trust is particularly used in the following situations:

estate and succession planning

protection of family assets

management of complex assets

governance of family businesses

protection of vulnerable individuals (minors or incapacitated persons).

Internationally, trusts are frequently used by business families and individuals with assets spread across multiple jurisdictions.

 

Advantages

Among the main advantages of the trust we can identify:

1. Asset segregation
The assets placed in the trust are separate from the personal assets of the settlor and the trustee.

2. Flexibility
The structure can be shaped according to the needs of the owner and the family.

3. Continuity in asset management
The trust helps ensure stability in the management of assets even in the event of succession or family changes.

4. Asset governance
It is possible to define precise rules on the management and distribution of assets over time.

 

Limits

Despite the many advantages, the trust also has some elements to be careful about.

In particular:

requires proper legal and tax planning

must comply with tax transparency regulations

can be complex in civil law legal systems.

Furthermore, in recent years, international regulations on tax transparency (CRS, DAC6, trust registers) have increased the levels of reporting required.

 

International context

The trust continues to be one of the most widespread tools in international estate planning.

The most commonly used jurisdictions include:

- United Kingdom

- Jersey and Guernsey

- Cayman Islands

- Singapore.

In continental Europe, trusts are often used in combination with other asset structures, such as holding companies or foundations.

In the context of contemporary estate planning, the trust remains a central tool for combining asset protection, family governance, and long-term wealth management.

What is a foundation?

A foundation is a legal entity established to manage assets intended to pursue specific goals.

Unlike companies, foundations have no members or shareholders: their assets are tied to a specific purpose.

Foundations can be used both for philanthropic purposes and for the management and transmission of family assets.

 

When it is used

Foundations are frequently used for:

- estate planning

- family wealth management

- philanthropic activities

- governance of business groups.

In some European jurisdictions, foundations are also used as an alternative to trusts.

 

Advantages

1. Institutional stability
The foundation guarantees continuity in the management of the assets.

2. Structured governance
The foundation's bodies can define precise management rules.

3. Asset protection
The assets are tied to the purpose of the foundation.

4. Philanthropic tool
The foundation is one of the main vehicles for charitable and cultural activities.

 

Limits

Foundations require proper governance and compliance with local regulations.

Furthermore, in some jurisdictions, the flexibility of the foundation may be less than that of other patrimonial instruments.

 

International context

Foundations are widespread in numerous European legal systems.

Among the most relevant jurisdictions:

- Liechtenstein

- Swiss

- Austria

- Netherlands.

In particular, the Liechtenstein Foundation represents one of the most widely used models in international estate planning.

What is an investment fund?

An investment fund is a financial instrument that raises capital from multiple investors to invest in a diversified portfolio of assets.

The fund is managed by a specialized company, which makes investment decisions in the best interests of investors.

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When to use

Investment funds are used for:

portfolio diversification

access to complex markets

professional investment management.

There are numerous types of funds, including:

- equity funds

- bond funds

- private equity funds

- real estate funds.

 

Advantages

1. Diversification
Investors gain access to a broad and diversified portfolio.

2. Professional management
Investment decisions are entrusted to specialized managers.

3 Access to global opportunities
The funds allow you to invest in international markets.

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Limits

Among the main limitations:

- management costs

- less direct control over investments

volatility of financial markets.

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International context

The global investment fund market is one of the pillars of the contemporary financial system.

Among the main jurisdictions for the domiciliation of funds:

- Luxembourg

- Ireland

- United States

- Singapore.

In Europe, the regulatory framework is mainly defined by the AIFMD Directive and the UCITS Regulation.

What is a Private Investment Company

A Private Investment Company (PIC) is a company used to hold and manage the investments of a family or family group.

Unlike mutual funds, private investment companies are generally owned directly by family members or by a family trust.

The main objective of this structure is to organize the management of family assets in an efficient and coordinated manner.

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When it is used

Private investment companies are used in a variety of estate planning contexts, including:

- financial portfolio management

- corporate shareholdings

- real estate investments

- intergenerational investment strategies.

They are often used by entrepreneurial families who wish to centralize the management of their investments.

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Advantages
1. Family governance

The company allows you to define governance rules that govern the management of family assets.

2. Generational continuity

The structure facilitates the transmission of wealth between generations.

3. Operational efficiency

Investment management is centralized within a dedicated corporate structure.

4. Coordination with other equity instruments

The private investment company can be integrated with trusts, foundations, or family offices.

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Limits

Establishing a private investment company requires careful planning from a tax and corporate perspective.

Among the main aspects to consider:

- corporate governance

- tax regulation

- managing relationships between family members.

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International context

Private investment companies are widespread in several financial jurisdictions.

Among the most relevant:

- United Kingdom

- Swiss

- Singapore

-Luxembourg.

In recent years, these structures have become increasingly widespread among European entrepreneurial families and family offices.

Today, they represent one of the most widely used tools for the professional management of family wealth.

What is a holding company?

A holding company is a company that holds shares in other companies with the aim of exercising control, coordination, or financial management functions.

Holding companies are one of the most common structures for organizing corporate groups and business assets.

Through a holding company, it is possible to centralize the management of shareholdings, financial flows, and investment strategies.

 

When it is used

The holding is mainly used in the following contexts:

1. organization of corporate groups

management of business investments

estate planning for entrepreneurs and families

2. investment in multiple economic activities

corporate portfolio management.

In the international context, holding companies are often used as an investment vehicle for cross-border transactions.

 

Advantages

Among the main advantages of holding companies we can identify:

1. Organizational efficiency
The holding company allows you to separate operating activities from capital ownership.

Financial flow management
The structure facilitates the distribution of dividends and the reinvestment of profits.

2. Asset protection
The shareholdings are concentrated in a corporate structure that allows for more orderly management of the assets.

3. Tax planning
In many jurisdictions, there are favorable tax regimes for holding companies.

 

Limits

Holding companies must be carefully structured, especially when operating in international contexts.

Among the main critical aspects:

- economic substance requirements

- anti-abuse regulations

- regulation of cross-border dividend flows.

Tax authorities today pay particular attention to corporate structures that do not present adequate economic activity.

 

International context

Holding companies are a fundamental instrument in international finance.

Among the most commonly used jurisdictions for holding companies are:

- Luxembourg

- Netherlands

- Swiss

- United Kingdom

- Singapore.

In Europe, the evolution of anti-tax avoidance regulations has reinforced the importance of economic substance and corporate governance.

What is a RAIF?

The Reserved Alternative Investment Fund (RAIF) is an investment vehicle established in Luxembourg in 2016 with the aim of offering a flexible structure for alternative funds aimed at qualified investors.

RAIF belongs to the family of funds regulated by the European framework of the AIFMD (Alternative Investment Fund Managers Directive). However, unlike other Luxembourg funds, it is not subject to the direct supervision of the CSSF (Commission de Surveillance du Secteur Financier).

Supervision is exercised indirectly through the fund manager (AIFM), which must be authorized in accordance with European regulations.

This model allows you to combine:

- high regulatory standards

- speed in constitution

- wide operational flexibility.

The RAIF is today one of the most widely used vehicles for structuring private equity, real estate, private credit, and infrastructure funds.

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When to use

RAIF is mainly used for:

- private equity funds

- real estate funds

- infrastructure funds

- private debt funds

- multi-investor investment platforms.

It is particularly suitable when:

the fund is intended for professional investors

it is necessary to quickly structure the vehicle

you wish to operate in the European context with an AIFMD passport.

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Advantages
1. Speed of constitution

The RAIF does not require prior authorization from the Luxembourg supervisory authority, allowing for relatively rapid incorporation.

2. Structural flexibility

It can be structured in various legal forms, including:

SICAV

SCS (limited partnership)

SCSp (special limited partnership).

3. Access to the European passport

If managed by an authorised AIFM, the RAIF can be distributed in several European countries.

4. Favorable tax regime

RAIF benefits from a generally efficient tax regime for international investments.

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Limits

Despite its flexibility, the RAIF has some limitations.

In particular:

- it is reserved for qualified or professional investors

- requires the presence of an authorized AIFM

- involves management and governance costs typical of regulated funds.

Therefore, the RAIF is generally used for investment structures with significant amounts of capital.

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International context

Luxembourg is now a major global hub for investment funds, with thousands of vehicles established under European regulations.

RAIF has become one of the preferred tools for:

- private equity managers

- institutional investors

- international investment platforms.

Thanks to its combination of legal flexibility, regulatory stability, and access to the European market, the RAIF currently represents one of the most efficient vehicles for structuring alternative funds.

What is an AMC?

Actively Managed Certificates (AMCs) are structured financial instruments that replicate the performance of an actively managed investment strategy.

Technically speaking, an AMC is a certificate issued by a financial institution that allows investors to participate in the performance of a portfolio or strategy defined by a manager.

AMCs are often used for:

- quantitative investment strategies

- multi-asset portfolios

- trading or asset allocation strategies.

The certificate is listed or distributed through an issuing bank, while the manager makes the investment decisions.

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When to use

AMCs are used in numerous contexts of international finance.

In particular:

- launching investment strategies without creating a fund

- management of thematic portfolios

- implementation of macro or quantitative strategies

- investment platforms for family offices or private banks.

They are often used by:

- emerging asset managers

- hedge fund boutique

- investment advisors.

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Advantages
1. Launch speed

Setting up an AMC is generally quicker than setting up an investment fund.

2. Flexibility

The manager can modify the composition of the portfolio according to the strategy.

3. Access to qualified investors

AMCs can be distributed through private banks or investment platforms.

4. Operational efficiency

Compared to a regulated fund, AMCs involve more streamlined operating procedures.

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Limits

However, AMCs have some limitations.

In particular:

depend on the solidity of the issuer

They are often intended for professional investors

liquidity may be limited.

Furthermore, the distribution of AMCs is subject to the financial regulations of different countries.

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International context

AMCs are especially widespread in the main European financial centers.

Among the most active jurisdictions:

- Swiss

- Luxembourg

- Liechtenstein.

Many private banks and investment platforms use AMCs to offer personalized investment strategies to their clients.

In the context of contemporary finance, AMCs represent an extremely flexible tool for the distribution of investment strategies, particularly in the private banking and boutique asset management segments.

What is an SPV?

A Special Purpose Vehicle (SPV) is a company established to carry out a specific economic or financial transaction. Unlike traditional operating companies, an SPV generally has a limited and specific purpose, tied to a single investment or project.

SPVs are used to separate a specific investment from the rest of the assets of a corporate group or investment portfolio. This separation allows risks and liabilities to be isolated within a dedicated structure.

SPVs can take various legal forms, including corporations, partnerships, or trusts, depending on the jurisdiction and the purpose of the transaction.

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When to use

SPVs are frequently used in various contexts of international finance, including:

- private equity transactions

- real estate investments

- project finance operations

- securitizations

- joint venture between investors.

An investment fund or a group of investors can, for example, set up an SPV to acquire a specific company or carry out an infrastructure project.

 

Advantages
1. Risk isolation

The SPV allows the risk of a single transaction to be separated from the rest of the investors' or corporate group's activities.

2. Clarity in the investment structure

The creation of an SPV allows for the transparent organization of relationships between investors involved in a given transaction.

3. Flexibility

SPVs can be structured with great flexibility to adapt to the needs of specific investment transactions.

4. Efficient structure for multiple investors

They are particularly useful when several investors participate in the same transaction.

 

Limits

Despite the operational advantages, the use of SPVs requires attention in several respects.

In particular:

- set-up and management costs

- transparency and reporting requirements

- need to comply with the tax and regulatory laws of the jurisdictions involved.

In some situations, tax authorities may also verify the economic substance of the structures used.

 

International context

SPVs are widely used in major international financial centers.

Among the most common jurisdictions for the incorporation of SPVs are:

- Luxembourg

- Ireland

- Netherlands

- United Kingdom.

These jurisdictions offer a stable legal environment and flexible corporate structures, making SPVs a central tool in structuring international investment transactions.