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The description of corporate structures and prices quoted below is serving as a general guide and may be subject to the most recent changes of the legislation in various jurisdictions. We invite you to contact us for the latest update and free quotation.

COUNTRY: Liechtenstein

Liechtenstein Offshore – Foundation

Legal form: The foundation, also known as the Stiftung, is the most frequently used by foreign investors legal form in Liechtenstein. Foundation is a hybrid entity, which incorporates many of the characteristics of both a company limited by guarantee and a trust. A foundation cannot generally be formed to pursue commercial purposes so it is suitable only for holding assets such as properties, shares in other companies and other forms of investments and has traditionally been used to hold and pass assets from one generation to another in complete confidentiality. Assets donated for a specific purpose acquire an independent status and an independent legal personality. Such assets are no longer part of the private assets of the founder and then constitute the assets of the foundation. The foundation for public utility is subject to state supervision under specific conditions. 
The other form of setting business in Liechtenstein is the establishment. The Establishment is a legally independent company set up for permanent economic or other purposes. It is a non-public institution and must be registered in the Public Register. The Establishment is constituted upon its registration with the Public Register (FL Öffentlichkeitsregister).

Objects of foundation: Foundations are particularly suitable for discrete asset and family asset management and succession arrangements. The beneficiaries are decreed in the by-laws. There are following use possibilities: Family foundation for securing assets, for support and education; The foundation for public utility for artistic, scientific or social determinations; Charitable trusts; Foundations for subsistence purposes; Foundations with ecclesiastical determination. The family foundation and the foundation for asset management are the most frequently used forms. The foundation is unsuitable for business application. Trading in a commercial way is possible only if used for achieving the non-economic purpose or if the extent and the manner of the participation necessitate a commercial business.

Types of the foundation:  There are two basic types of the foundation. If the foundation is “registered” the formation documents (“Articles”) are available for inspection at the public registry. If the foundation is “deposited” the Articles are delivered to the public registry but are not available for inspection. Thus the deposited foundation is most frequently used and gives the highest degree of confidentiality and the rest of the information appearing herein relates the deposited foundation.

Formation: The allocation or endowment of funds or assets is essential to the formation of a foundation and a deed has to be set up containing the essential provisions such as name, purpose and duration of the foundation, nomination of the foundation board (council) and beneficiaries, as well as provisions as to the application of the assets in case of liquidation. If it is desired that a foundation shall come into effect only after the death of the founder it may be formed by a legally valid last will and testament, or by means of a contract of succession.  The deed of foundation generally contains the basic provisions, while the nature and extent of the beneficial interest and the circle of beneficiaries ensues usually in the form of so-called subsidiary provisions or by-laws. Also, the foundation may be formed by a trustee, so that the name of the actual donor or founder does not appear.  The family foundation and the mixed foundation are not entered in the Public Register, but the statutes, excluding subsidiary provisions or by-laws, must be deposited with the Court of Justice of the Principality of Liechtenstein as the supervisory authority. Documents deposited in this manner are not subject to public inspection.  If a foundation conducts an enterprise within the framework of its non-commercial purpose, it must be entered in the Public Register and does not achieve juridical personality until it has done so.

Name: The name of the foundation must be approved by the Liechtenstein Registry.  It is not permissible to use place names, state names, country names or well-known international names. Additionally names indicating banking, insurance or collective investment type activities cannot be used without the appropriate license for the indicated activity.

Beneficiaries: The Liechtenstein Company Law (PGR) is the legal basis of the foundation. According to the foundation law, contributions can be made unconditionally. The beneficial interest can be limited in time and linked to conditions or restrictions. Furthermore, the beneficial interest of under-age children or spouses can be adapted to their specific needs at any time by distributions or by support during the educational period. In addition, the foundation may be used as an instrument to preclude the splitting of a company through succession, by including the companies in a foundation.

Share capital: The minimum capital (foundation capital) required is CHF 30,000. Before the Foundation is established it is a requirement to pay up the nominal capital by transferring into a Liechtenstein bank, which must give a certificate to the Registry to verify that the required capital has been paid up.

Administrative body: As a rule the sole organ of a foundation is the foundation board (council), whose powers are determined by the deed of foundation. Legal provisions are only applicable, if the deed of formation does not include any appropriate provisions. The scale of operations of the foundation council may be reduced at founder’s option, for example, by a protector, exercising general control functions or by a curator, supervising the beneficiaries.  An auxiliary organ having an advisory function and to which also the foundation beneficiaries may belong can be appointed for specific purposes which must be precisely described.  An audit office may be appointed for the supervision of the administration and examination of accounts, but is not mandatory by law.

Taxation: Holding companies, domiciliary companies, and investment companies (investment funds) domiciled in Liechtenstein pay no profits taxes, but only capital taxes in the amount of 0.1% of the paid-up capital or assets invested in the company or 1000 francs annually, whichever is higher. This minimum tax amount is paid one year in advance. For foundations, the capital tax for the amount of assets including reserves exceeding 2 million francs is reduced to 0.075% and for the amount of assets including reserves exceeding 10 million francs to 0.050%. For Liechtenstein investment companies (investment funds), the tax is also reduced to 0.040% for the amount of assets including reserves exceeding 2 million francs.

Annual reporting: The registered agent is required to pay the capital tax to the Liechtenstein Registry every year. Audited accounts are not generally required by instead an internal statement of assets has to be drawn up by the foundation Council.

Time needed for formation: The Liechtenstein foundation can be founded within 3 business days from the ordering date. The formation and administration is determined in the commission with tariff as integral part.

In order to proceed with the formation of the Liechtenstein foundation please visit our how do I start  page and then proceed to  filling in our application form