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Liechtenstein Foundation and Trust Enterprise. Service offer

It first became possible to form Foundations and Trust Enterprises in Liechtenstein in 1926, when the Persons and Companies Law was adopted and the Anglo-Saxon concept of trust was introduced into the national legislation, which is a highly unusual thing for a continental law country.

A Foundation (Stiftung) and a Trust Enterprise (registriertes Treuunternehmen/Trust reg.) are both legal entities established for non-commercial purposes (charity, preservation of family assets etc.) and operating on account of the property contributed by the settlor. Neither Foundation nor Trust Enterprise has members or shareholders, but can have beneficiaries appointed by the settlor and entitled to the income from the Foundation or Trust Enterprise on the terms set by the settlor.

The settlor of the Foundation and Trust Enterprise can be either an individual or a legal entity, without restriction as to the country of residence or nationality. The settlor signs a foundation deed or a deed of trust, adopts the statutes/bylaws, appoints the Foundation Board or Board of Trustees and pays in the share capital.

The minimum statutory capital is CHF 30 000, however the capital can also be denominated in USD or EUR, in which case the same amount should be paid in in the selected currency.

The minimum share capital must be fully paid up BEFORE the entity’s registration by depositing it to a special account at a Liechtenstein or a Swiss bank.

The bank issues a special letter to confirm payment of the capital which is required for the completion of registration.

The assets put into the Foundation or Trust Enterprise become the property of this legal entity and can only be taken back by the settlor if the deed or the statutes specifically permit the settlor to do that.

The details of the settlor must be stated in the foundation documents and submitted to the Trade Register.

At least one member of the Foundation Board or the Board of Trustees must be a licensed practitioner such as trustee, lawyer or accountant and be an EU resident.

The settlor can be a member of the Foundation Board or the Board of Trustees if he/she is not also a beneficiary of this Foundation or Trust Enterprise.

The settlor must state the following in the foundation deed or the deed of trust:

  • Name and registered office;
  • Purpose of the Foundation / Trust Enterprise;
  • Initial Members of Foundation Board or Board of Trustees, and their appointment / resignation mechanism;
  • Methods of distributing liquidation proceeds of the Foundation / Trust Enterprise;
  • Details of the auditor, if the Foundation / Trust Enterprise is going to carry on commercial activity.

Any other matters of the future operations of the Foundation or Trust Enterprise can be dealt with in the statutes. Upon formation, the affairs of the Foundation or the Trust Enterprise, including distributions to the beneficiaries, will be managed by the Foundation Board or Board of Trustees.

In addition to the statutes, the settlor can adopt the so-called supplementary foundation deeds which, unlike the statutes, need not be submitted to the Land and Public Registry Office of Liechtenstein. This means that, despite being part of the statutes, such information will not be public or available to third parties. Supplementary foundation deeds normally contain details of beneficiaries of the Foundation or Trust Enterprise, the manner of asset management and functions of the protector (if the settlor finds it necessary to appoint one).
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As the Liechtenstein laws do not have strict requirements for the content of supplementary foundation deeds, the settlor is practically free to draft them as he/she chooses, in particular the settlor may specify different priorities of beneficiaries and the terms on which beneficiaries become entitled to income in the Foundation or Trust Enterprise.

The settlor can also state that no-one but himself/herself has the power to amend or modify the foundation deeds, in particular with respect to adding or removing beneficiaries of the Foundation or Trust Enterprise.

Neither Foundation nor Trust Enterprise is allowed to carry on commercial activity unless such activity is aimed at achieving the purpose of the Foundation or Trust Enterprise which should also be non-commercial in nature. The purpose of the Foundation or Trust Enterprise is normally defined as management and preservation of family assets.

The worldwide income derived by the Foundation or Trust Enterprise from commercial activity is subject to tax at the rate of 12.5%. Besides, all legal entities incorporated in Liechtenstein must pay a minimum tax of CHF 1200 even if they had no profit in the financial year.

However, dividend income is not taxed in Liechtenstein.

Local companies must also pay stamp duty upon payment of initial share capital and in the case of share capital increase. The stamp duty is levied at the rate of 1% of the capital, but the first CHF 1 000 000 is exempt.

The Foundation and Trust Enterprise are obligated to keep accounting records and prepare financial statements that should be filed with local tax authorities. The financial statements must be audited by a licensed certified accountant if the Foundation or Trust Enterprise carries on commercial activity.

Fees for basic services [1]

Services
Fees
Total cost of incorporation with standard constitutive documents (including preparation and provision of original constitutive documents of the company, but excluding payment of share capital)
CHF 15 290
Local Manager (per year)
CHF 7 700
Renewal (starting from the second year of existence), including secretarial services, local manager and registered office
CHF 12 650
Drafting the Regulations, creating an individual structure of the Foundation or Trust Enterprise
Charged on time spent basis at the lawyer’s rate
CHF 150-350 per hour
Preparation and submission of financial statements
Charged on time spent basis at the auditor’s rate
CHF 150-350 per hour

[1] The fees are valid as of March 2022 and may change without prior notice.

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