Technical article
Which Countries Recognise a Trust, and Which Treat It as Something Else
A country that joins agrees to recognise a trust formed under another country's law.
Imagine a family with a trust set up under the law of one country. The father lives in the United States. One daughter lives in Germany, one son in Mexico, and a niece in Italy. The question is whether each country will treat the trust as a trust.
One treaty speaks to this: the 1985 Hague Convention on trusts. A country that joins agrees to recognise a trust formed under another country's law. The treaty body's status table (tier A) lists 14 parties in one extract and 16 rows in a later print, which adds France and the US as signatories without an entry date. Counts differ by the version read.
The parties
Australia (1992), Canada (1993, for nine provinces), Hong Kong through the UK (1992), Cyprus (2017), Italy (1992), Liechtenstein (2006), Luxembourg (2004), Malta (1996), Monaco (2008), the Netherlands (1996), Panama (2018), San Marino (2006), Switzerland (2007) and the UK (1992).
France signed in 1991 and the US signed in 1988. Neither has an entry date. Germany, Spain, Mexico, Ireland and Portugal are not on the list. One law firm says Panama is not a party, while the treaty table shows it from 1 December 2018. The two sources differ.
What each country does
| Place | Treaty | How the trust is treated |
|---|---|---|
| UK, Australia, Canada (nine provinces) | Party | Recognised |
| Italy | Party | A foreign-law trust is recognised but must respect the shares set aside for family (tier U) |
| Netherlands | Party | No Dutch trust exists. Foreign trusts are common, and Dutch tax looks through a discretionary trust to the settlor |
| Switzerland | Party | Recognised in principle, but a transfer that infringes family shares can be pulled back |
| Germany | Not a party | No domestic trust. A foreign trust is taxed as transparent or as opaque, depending on how much control the settlor kept |
| Spain | Not a party | Not recognised. Tax looks through the trust |
| France | Signed only | Not a civil-law institution. Taxed under its own rule, at 45% or 60% in some cases (tier C) |
| Portugal | Not a party | A beneficiary receiving the assets at the end of a trust pays 10% stamp tax as a gift; income paid out is taxed as investment income at 28% |
| Mexico | Not a party | A Mexican trust, the fideicomiso, needs a bank as trustee. Foreign trusts are generally tax-transparent |
| Thailand | Not a party | Personal trusts are not recognised. Benefits from an overseas trust brought into Thailand are taxed for residents since 2024, at 5% to 35% |
The German view comes from a 2021 Federal Fiscal Court series, published in 2022, according to a German tax journal (tier B). The Thai, French and Portuguese points come from advisory and law firms (tier C).
What this means for the family
For the daughter in Germany, the trust is not a Dutch or an English kind of trust. It is something to be sorted by how much control the settlor kept, and taxed on that reading. For the son in Mexico, the trust is not set up under Mexican law, and the tax office may treat it as see-through. For the niece in Italy, the trust may be recognised, and still bound by Italian family shares.
The pattern in the table is plain. A country may have no place for a trust in its civil law and still have a tax rule for it. That is true for Germany, Spain, France, Portugal and Thailand.
You could
You could list each heir's country and mark whether it is a party to the treaty. You could ask a lawyer in that country what the trust is called on the local tax form. You could also ask each heir whether a bank there asks for a trust certificate and what else it wants.
Who it touches
Children in the countries on the list meet the trust as a recognised thing. Children in the others meet it as a tax event.
Where do your heirs live, and what did their tax adviser call your trust? Share it here, because the same trust can wear a different name in each country.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- Hague Conference on Private International Law, status table of the 1985 trusts convention (A)
- Chambers Succession and Estate Planning 2026 on Spain, Germany, Switzerland and the Netherlands (B)
- Der Betrieb on German trust tax (B)
- wiki.private.law on Italy (U)
- Etudes fiscales internationales on France (C)
- Sovereign Group on Thailand (C)
- Pardini law on Panama (C)
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