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The National Council has relaxed foundation law. Family foundations in Switzerland will now also be used for estate and asset planning. What’s behind the idea? An overview.
The National Council has decided to relax foundation law – the Council of States had already agreed. Maintenance foundations are intended to make it possible to pass on family assets to heirs without any prerequisites.
What is the idea of the family foundation? It serves to preserve family assets and provide financial support to family members. Construction is currently only permitted in Switzerland for specific purposes. For example, for raising or supporting relatives. Up to now, maintenance foundations that only serve the general subsistence of descendants are not permitted.
There is a risk that unwanted assets will be attracted, whether for tax evasion, money laundering or terrorist financing.
Why does the restriction exist? At the beginning of the 20th century, when the law was drawn up, the legislature wanted to put a stop to feudal structures. Since the Middle Ages, lands could be tied to the family in a so-called family fidei commission. In 1945 there was also a federal court ruling that spoke out against family support foundations. For example, because people feared that heirs would become lazy if they simply got money like that. Since then the ban has remained the same. Switzerland wanted to introduce the Anglo-Saxon construct of trusts. Because implementation would be complicated, this is now being avoided.
What would a family support trust bring? The ban is an old tradition, say supporters. Families would be forced abroad, where foundations and trusts cost a lot. Switzerland would also have to subsequently recognize the foreign constructs, but without being able to control their content. The innovation would also bring more tax revenue. A study by the Bass research institute from 2020 speaks of additional tax revenue of up to 190 million francs.
The risk of money laundering or terrorist financing is no higher.
What do the opponents say? Opponents argue that the maintenance foundation is for the rich. Others see potential for abuse by shielding money from tax authorities or creditors. “There is also a risk that unwanted assets will be attracted, be it for the purposes of tax evasion, money laundering or terrorist financing,” says Hans Michael Riemer, emeritus law professor at the University of Zurich.
What is controversial? The risk of money laundering or terrorist financing is no higher, says Andrea Opel, tax law professor at the University of Lucerne. “The Swiss Family Foundation is embedded in the relevant international measures and reporting obligations of the automatic exchange of information (AEOI) and it stays that way,” Opel continues. She also doesn’t see any potential for tax abuse. The maintenance foundation is not recognized for tax purposes. The assets are attributed to the founder or the beneficiaries.
What will the easing bring to the Swiss financial and foundation center? “Switzerland’s foundation position is being strengthened,” says Dominique Jakob from the Center for Foundation Law at the University of Zurich. He expects more family and more charitable foundations. Today, Switzerland has around 500 family foundations and 13,700 charitable foundations. The amendment to the law promises more orders, particularly for asset managers, lawyers and trustees.
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China has decided to cut mortgage rates
– 2024-02-27 18:58:39
China announced its largest mortgage rate cut to support the real estate market and economy. This decision was reported by Reuters, Day.Az reports with reference to Lenta.ru.
Five-year loans (LPR) were reduced in price from 4.2 to 3.95 percent per annum. The decline of 25 basis points was a record since 2019 and far exceeded the forecasts of experts who did not expect such a collapse in rates.
“This is the biggest signal. In other words, the largest cycle of interest rate cuts in history has begun,” said Yan Yuejin, an analyst at the Chinese research institute E-House.
The rate cut suggests that Beijing is no longer worried about the negative effects of lower lending rates on the currency and banks, as it was in 2023. However, the decision to cut the rate did not strengthen investor confidence in the stock markets.
Beijing has stepped up efforts to save the struggling real estate sector, which accounts for a quarter of the economy, but the measures have so far failed to produce the expected results. Most analysts and investors expect additional measures to stimulate consumption and support property prices. Most people don’t buy houses because mortgage costs are too high and they worry developers will go bankrupt and house prices will fall, according to Asia-Pacific investment strategist at Legal and General Investment Management Ben Bennett.
At the beginning of December 2023, the Chinese authorities presented an emergency plan to restore the economy from a protracted crisis. It is hoped to achieve sustainable economic growth by more actively attracting foreign investment, as well as encouraging innovation in the industrial and agricultural sectors.
In 2021, China is faced with the bankruptcy of its largest developer, Evergrande. Behind it, collapse befell smaller players. Due to a lack of liquidity, developers are selling apartments even before construction is completed, and using the funds received they continue to create new projects, freezing the implementation of previous ones. Now in the country there are thousands of unfinished houses and millions of empty square meters, mortgage payments for which the Chinese are boycotting due to distrust of construction companies. Analysts admit that the housing bubble could undermine China’s financial system and shake the entire global economy.
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China has decided to cut mortgage rates – 2024-02-27 18:58:39
Apple Inc. Abruptly Cancels Decade-Long Electric Car Project, Surprising Employees, Reports Say
Surprising decision by tech giant shocks employees
In a surprising turn of events, Apple Inc. has made a significant decision to halt its ambitious plans of developing an electric car, marking the end of its decade-long endeavor. Reliable sources familiar with the matter, who have requested to remain anonymous as they are not authorized to publicly discuss the matter, reported that this announcement was disclosed internally to the shocked employees of the tech giant on Tuesday.
Unprecedented Hiatus:
The news has sent shockwaves through the industry, leaving many people speculating about Apple’s sudden change of direction. With nearly 2,000 employees tirelessly working on the electric car project, the decision was unexpectedly shared by Apple’s Chief Operating Officer, Jeff Williams, and Kevin Lynch, a vice president overseeing the effort.
Disrupting the Automotive Industry:
Apple’s foray into the automotive industry had been highly anticipated and regarded as one of the boldest and most innovative undertakings of the company. The company had allocated substantial resources towards developing a cutting-edge electric vehicle – a move that could potentially have disrupted the entire automotive industry.
The Underlying Factors:
While the exact reasons behind Apple’s decision remain undisclosed, industry pundits are suggesting a multitude of factors that may have contributed to this surprising turn of events. One such factor could be the numerous challenges the company faced throughout the project’s lifespan.
Developing a state-of-the-art electric car involves overcoming various obstacles such as building efficient battery technology, establishing a robust charging infrastructure, complying with stringent regulatory standards, and ensuring the vehicle’s safety and reliability. With several well-established players already dominating the market, the highly competitive nature of the automotive industry requires immense resources, expertise, and extensive research and development. It is likely that Apple’s assessment of these complexities influenced its decision.
Apple’s Shifting Focus:
Apple is a company known for its ability to adapt and pivot its focus based on market dynamics. With the electric car project being a highly capital-intensive undertaking, halting it provides Apple the opportunity to allocate its resources to other strategic endeavors.
It is worth noting that Apple’s exploration of the automotive sector is not entirely abandoned. Industry insiders speculate that the tech giant may choose to partner with established players in the future, harnessing its expertise in software, battery technology, and design to contribute to the development of autonomous vehicle technology.
Future Implications:
Industry analysts are closely watching the consequences of Apple’s decision within the broader context of the electric vehicle market. With the company’s immense brand recognition and vast consumer base, its entry into the industry would undoubtedly have disrupted existing players, posing new challenges and opportunities. However, this recent development signifies that the landscape may evolve differently than anticipated, prompting the industry to reassess the future of electric mobility.
Apple Inc. Abruptly Cancels Decade-Long Electric Car Project, Surprising Employees, Reports Say