What a private trust company is
A private trust company, usually called a PTC, is a company formed to act as trustee of one family's trusts. It does not offer trustee services to the public. Its clients are a defined group of trusts connected to a single family, sometimes only one trust.
The reason families use them is control over decision-making. With a commercial trustee, decisions are made by the trust company's staff, who may change over time and who apply the firm's own policies. With a PTC, the family can choose the directors. Those directors might include trusted advisers, an independent professional, and in some structures family members themselves. The board of the PTC then makes the trustee decisions.
Several offshore jurisdictions have specific regimes for PTCs. The British Virgin Islands, Cayman Islands and Isle of Man are common choices, each with its own conditions about licensing exemptions, registered office arrangements and the involvement of a licensed provider. The detail varies, and families should take local advice before choosing a jurisdiction.
Why families use them
The motives tend to be practical. A family with an operating business inside the trust may want directors who understand that business, rather than a trustee who is uneasy holding a concentrated stake. A family with several trusts across generations may want one consistent decision-making body. Some families simply want continuity, so that the people they have relationships with remain in place regardless of changes at a service provider.
There are costs. A PTC needs a properly functioning board, accurate minutes, annual filings and usually an administrator. If the family members on the board treat the PTC as an extension of their personal affairs, the protective benefits of the trust can be undermined. A PTC works well when it is run like a fiduciary, and badly when it is run like a family chequebook.
A PTC also concentrates responsibility. With a commercial trustee, a mistake falls on a regulated firm with insurance and internal controls. With a PTC, the directors carry the duties personally and the family may carry the consequences. Families considering a PTC should be realistic about the time their chosen directors can give, and whether those directors have the experience to read a trust deed, weigh competing beneficiaries and say no when they need to.
Who owns the PTC
A trust company has shareholders, and the question of who holds those shares matters. If the settlor or a beneficiary owned the PTC outright, they would indirectly control the trustee of their own trust, which can create tax, asset protection and governance problems.
The usual answer is to place the shares of the PTC in an orphan structure. Two arrangements are common:
- A purpose trust. A non-charitable purpose trust holds the PTC's shares. Its purpose is to own and support the PTC, and it has an enforcer in place of beneficiaries. The purpose trust's own trustee is usually a licensed professional.
- A foundation. A foundation, a civil-law vehicle with a council and a charter, holds the shares. The foundation council then exercises the shareholder rights, including appointing PTC directors.
Either way, the shares are held by a structure with no individual owner. Control flows through the people who can appoint the PTC's directors, which is why those appointment powers receive close attention at onboarding.
Board governance in practice
The PTC's board is the trustee's mind. Every trustee decision, from investing to paying a distribution, should be taken by the board or by someone to whom the board has properly delegated. Good governance looks unexciting:
- Board meetings held at regular intervals and when significant decisions arise, with written minutes.
- Decisions taken in the right capacity, recorded as decisions of the PTC as trustee of a named trust.
- Conflict policies, so a director who is also a beneficiary steps out of decisions that benefit them.
- A signing policy that says who may give instructions to banks and payment providers, and in what combinations.
- An independent director, ideally from a regulated firm, who brings fiduciary discipline.
Where the PTC acts for more than one trust, the minutes should be clear about which trust each decision concerns. Mixing trusts in a single resolution is a common source of confusion when a provider later asks for evidence of authority.
The role of the administrator
Most PTCs appoint a licensed trust or corporate services firm to provide the registered office, keep the statutory registers, prepare minutes and handle day-to-day administration. In some jurisdictions this involvement is a condition of the PTC's exemption from licensing.
The administrator is often the first point of contact for banks and payment providers. It prepares onboarding packs, certifies documents and coordinates signatures. It is helpful when the administrator also keeps a current list of the trusts the PTC acts for, the beneficiaries known for each, and any protector or enforcer, so that information can be produced quickly when a provider asks.
What onboarding a PTC involves
From a provider's point of view, a PTC is a corporate trustee with two layers of control to understand: the trust whose assets will be in the account, and the PTC structure itself. Expect requests covering both.
For the PTC: certificate of incorporation, constitutional documents, register of directors and shareholders, the board resolution approving the account, the signing policy and identification of the directors and signatories.
For the owning structure: the purpose trust deed and identification of its trustee and enforcer, or the foundation charter and regulations with identification of the council members and any guardian.
For each trust the PTC acts for: the trust deed and supplemental deeds, and identification of the settlor, known beneficiaries and any protector. Canadian rules also require identifying beneficiaries of discretionary trusts when they are named or receive a distribution.
Source of wealth will be assessed at the level of the family, because the PTC itself has no wealth of its own beyond what it holds as trustee. A clear narrative of how the family's assets were built, supported by documents, does more than a large stack of paper without explanation.
One account per trust
A PTC that acts for several trusts should keep the assets of each trust separate. In banking terms, that usually means a separate account or sub-account for each trust, titled to show the PTC as trustee of that particular trust. Pooling funds of different trusts in one account makes it hard to show which beneficiaries own what, and complicates both audit and distributions.
A platform that supports several entities under one login helps here. Each trust can sit as its own entity with its own balances and statements, while the PTC's signatories see everything they are authorised to see. Approvals can follow the PTC's signing policy for every trust without duplicating user set-up. Our article on multi-entity treasury platforms explains how this usually works.
Instructions and evidence of authority
When a PTC instructs a payment, the provider is checking three things. First, that the instruction comes from authorised signatories in the combination the signing policy requires. Second, that it is made for the correct trust. Third, that the payment fits the purpose and expected activity described at onboarding.
For routine payments, the signatures and the platform's approval controls are usually enough. For distributions, large capital movements or payments to new counterparties, a provider may ask for the board minute or resolution, and any consent required from a protector. Keeping those documents in a form that can be sent quickly avoids delay. A one-page resolution naming the trust, the payee, the amount, the currency and the power relied upon is ideal.
Common problems at onboarding
Most delays in onboarding a PTC come from a small number of recurring issues, and nearly all of them can be fixed before the application is submitted.
- Incomplete chain of deeds. The PTC was appointed trustee by a deed of retirement and appointment that cannot be found, so the provider cannot confirm the PTC is in office.
- Unclear capacity. Board resolutions approve the account in the PTC's own name, with no reference to the trust whose money will flow through it.
- Missing owning structure documents. The purpose trust deed or foundation regulations are treated as confidential and withheld, leaving the provider unable to see who appoints the directors.
- Directors who are not yet identified. A family member was added to the board recently and has not supplied identity documents.
- A vague activity profile. The application says the account will be used for investments and family expenses, with no currencies, countries or typical sizes.
A short covering memorandum from the administrator, listing each document provided and explaining how the pieces fit together, prevents many follow-up questions. It is also worth checking that names are spelt identically across every document, as small inconsistencies in an entity name can hold up verification.
When directors or ownership change
PTC boards change. Directors retire, a new generation joins, an independent director's firm is replaced. Each change should be reflected in the PTC's registers, then passed to every bank and provider with a resolution updating signatories. Platform access for departing directors should be removed promptly.
Changes in the owning structure, such as a new enforcer of the purpose trust or a new foundation council member, also matter, because they alter who ultimately controls the trustee. Tell providers about these changes as they happen rather than waiting for the next periodic review. For the wider process when the trustee itself changes, see changing trustees and banking.
General information only
This article is general information about private trust companies and how they are commonly onboarded. It is not legal or tax advice. The rules for PTCs differ between jurisdictions, and families should take specialist advice before forming or restructuring one.
CCYFX works with PTCs on foreign exchange and international payments, acting on the instructions of the PTC's authorised signatories. Our page on fiduciaries describes how we support trustee clients.
