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Forms of Company

Liechtenstein corporate bodies are formed under the Law on Persons and Companies 1926, known as the PGR Code. Trust Enterprises are formed under the Law Concerning the Trust Enterprise 1928. A wide variety of types of entity can be formed under the PGR Code, the most commonly used of which are described below; other possible forms include the limited partnership with a share capital, the company limited by quota shares, the association, the cooperative association and the company without juridical personality; but they are not commonly met with in offshore situations.

All corporate forms that are allowed under the Code, and the Trust Enterprise, can additionally be either 'holding' companies (companies that hold investments) or 'domiciliary' companies (not having trading activities inside Liechtenstein). Holding, domiciliary and non-resident entities are sometimes known as 'exempt', ie exempt from certain types of taxation. See see Offshore Legal and Tax Regimes for further details.

No permits or licenses are required to do business, except for financial sector companies and professional services. It is a notable feature of the Liechtenstein PGR Code that there is very great freedom, within the basic forms it describes, to constitute corporate and share structures in a flexible way according to the particular purpose of the entity and its originators' wishes. Therefore only rather general statements can be made about the rules governing the operation of the various forms; the rest will depend on circumstances.

Corporate bodies formed under the PGR Code (not Trusts) share a number of characteristics:
  • there must be written Articles of Association; they are deposited with the Registrar and are available on the public file, including details of capitalisation, share structure, registered office, etc;
  • the corporate body does not come into existence until its details have been entered into the public register;
  • the names of the directors, officers and shareholders are kept at the registered office;
  • the corporate name can be in any language and must include the name of the type of body concerned (Limited, Foundation, etc), but some words are not permitted, mostly those with national or international territorial meanings (exemptions may be available).

In May 2010, the Liechtestein government adopted tax reform proposals that will usher in a 12.5% flat rate of corporate tax. See Domestic Corporate Taxation for more information.


Liechtenstein Company Limited by Shares

The Company Limited by Shares is designed to be used as a public company, although it does not have to be public. There are founders who are (can be) distinct from the shareholders.

The Company Limited by Shares has a minimum capital of (at the time of writing) SFr 50,000, 20% of which must be paid up, with a minimum paid up of SFr 50,000. Bearer shares must be fully paid up, although the Articles can permit them to be 50% paid up; the minimum is still SFr 50,000.

If there is to be no public subscription, the company is formed 'simultaneously', in one legal act, and the founders are the shareholders. They create the company by entering into a Deed.

If there is to be a public subscription, the company is formed 'successively': first, the founders declare their intentions in general, then the subscription process takes places, and in a general meeting of subscribers (shareholders) the final details of the company's constitution are ratified.

Shares can have variable voting rights (eg multiple votes, or restricted votes), but non-voting shares are not permitted. The appointment of an auditor, and the annual submission of audited accounts to the Registrar, are mandatory for the Company Limited by Shares.


Liechtenstein Limited Liability Company

The Limited Liability Company (Aktiengesellschaft) is formed by two or more members and has a minimum capital of SFr 30,000 (at the time of writing). The minimum subscription amount from any one shareholder is SFr 50. Further amounts need not be paid up unless the Articles provide for it; but the joint liability of the shareholders on liquidation or withdrawal is the amount of the registered capital.

  • Various types of share can be issued, including preference, registered, voting, no-par-value and bearer shares; only registered shares can be issued at below par value;
  • Voting rights can be allocated or not freely to all types of shares, and voting rights can be limited according to defined circumstances or occasions;
  • A minimum of one director is required, who may be corporate; secretaries are not required; an exempt company needs to have a local professional as an agent;
  • Audited annual accounts have to be filed.


Liechtenstein The Establishment (Anstalt)

The Establishment, or Anstalt, is a corporate form that is peculiar to Liechtenstein. It has no members or shareholders. It is an autonomous fund with beneficiaries. It is often used as a holding company for patents or royalties, or for estate assets. It has a founder or founders, who are not necessarily the same as the beneficiaries; the founders' rights can be transferred, if the capital is not divided into shares, giving the current tenants of the founders' rights considerable powers over the Establishment. In this respect, the Establishment is similar to the Foundation.

  • The minimum capital, if not divided into shares, is SFr 30,000 (at the time of writing); and if higher, at least half (minimum SFr 30,000) must be paid up;
  • the minimum capital, if divided into shares, is SFr 50,000 (but this form is never nowadays used);
  • a minimum of one director is required; it is normal to delegate substantial powers of management to the director(s);
  • if the Establishment has commercial objects, audited annual accounts must be filed; but note that the management of investments or other assets is not deemed 'commercial'


Liechtenstein The Foundation (Stiftung)

A foundation exists to give effect to the stated, non-commercial wishes of its founder, as set out in a foundation deed and the Articles of Association (Statutes). In effect, the assets with which the foundation is endowed become a separate legal entity. The Foundation has no members or shares; it is set up by a founder (or founders). Most often, this is the form that is used for the continuation of family assets. The Foundation has beneficiaries, who may be identified in a variety of ways.

  • No public registration is necessary, except that a copy of the Foundation Deed is lodged with the authorities. It need contain only very general statements about the purpose of the Foundation, while detailed rules are set out in private bye laws.
  • Founder's rights are transferable, and they normally include the right to terminate the Foundation or amend the bye laws.
  • Commercial activities are not permitted except in so far as they are in pursuit of the Foundation's non-commercial goals. The minimum assets of a Foundation are SFr 30,000 (at the time of writing), which can not be divided into shares; the assets do not necessarily have to pass to the Foundation on formation;
  • A Foundation is normally administered by what amounts to a board of trustees.

In summer 2008, it emerged that the Liechtenstein parliament had approved a reform of the jurisdiction's foundations law, which the government claimed adhered to international standards while continuing to protect privacy.

The new foundation law entered into force on April 1, 2009 and is part of the government's ongoing modernization of Liechtenstein company structures, which so far has included revision of the law governing associations and cooperative societies, and the introduction of the European Company and the European Cooperative Society.

As announced by the government, a revision of trust law will follow, the cornerstone of which – as in the case of Liechtenstein foundations – was laid in 1926 with the creation of the Law on Persons and Companies.

"Liechtenstein’s total revision of foundation law is based on the contemporary demands and needs of the financial centre's’s clients," the government announced.

"The balanced overall concept of the reform...meets international standards without deviating from the Liechtenstein legal tradition, which has always considered the protection of privacy to be a valuable good," the government said.

The main aim of the reform of foundation law was to harmonize with international standards, but the changes were also carried with the popularity of the foundation and its national economic significance to the Principality in mind.

"The requirements of market participants were taken into account, as well as the need to create a legal foundation that can be measured in accordance with scientific criteria and international standards, as the government stipulated in its guideline at the beginning of the reform process," the government stated.

The new foundation law is a self-contained body of law with a new systematic structure differentiating private-use from charitable foundations and strengthening the responsibility of the founder. The protection of the foundation assets is subject to new rules, as are the supervision of foundations and foundation governance. The non-transferability of the founders’ rights as a further new key feature entails greater legal certainty and clarity.

The “deposited” foundation, which need not be registered in the Public Registry and has thus been an object of criticism, was retained. The government justified the retention of this type of foundation by noting that it serves to protect the confidentiality of the founder if he wants to engage in long-term asset planning in the interest of his family. The exemption from the registration requirement only applies to private-use foundations, however, not to commercially operating foundations, which as a rule are limited to the mere management of assets.

The so-called “Futuro” project launched by the government calls foundations the “heart of the financial centre's" According to “Futuro,” family foundations are increasingly being recognized as autonomized assets and thereby constitute an instrument of succession planning that is sought worldwide.

In the future, the Liechtenstein professional trustee is no longer envisaged as merely a broker and administrator of this structure, but rather – thanks to his internationally recognized competence – will be seen as an important advisor in personal contact with the founders.

“Futuro” also plans to make Liechtenstein into a location for trusts, by harmonizing them completely with Anglo-Saxon trust structures.


Liechtenstein The Trust Enterprise

The Trust Enterprise is set up by a Trustor (settlor) through a Deed of Trust which is equivalent to Articles of Association, and must specify the name and purposes of the Enterprise, the identity of the trustees, the composition of the trust fund, and (if the purposes are commercial) the identity of the auditors. As usual, 'commercial' does not include asset management or holding operations. The Deed of Trust is filed with the Registrar of Trusts. The minimum trust fund is SFr 30,000 (at the time of writing). The participants in a Trust Enterprise are largely shielded from creditors of the Enterprise, who have access only to its own assets.

A Trust Enterprise can be created either without legal personality, and is then called an 'active trust' (eigentliche Geschaftstreuhand), or with legal personality, in which case it is called a 'non-active trust' (uneigentliche Treuunternehmen). Only non-active trusts have gained currency in Liechtenstein, and they are frequently used to hold investment assets, for instance in merger situations, and for the distribution of income from real estate holdings. The legal form of the Trust Enterprise is close to that of the American 'Massachusetts Trust'.

One of the trustees must be a resident of Liechtenstein holding a recognised professional or other qualification. In the case of a non-commercial (ie unaudited) Trust Enterprise, this person certifies to the Registrar that the Trust has kept proper books and that no commercial activities have been carried out. This is the only reporting that is required.


Liechtenstein Trusts

Liechtenstein is the only civil law jurisdiction which has adopted largely anglo-saxon trust legislation (contained in the PGR Code), although, unlike the common law trust, there is no bar against accumulation of income, nor against perpetuities.

A Liechtenstein Trust is set up by a written agreement (Trust Deed) between the trustor (settlor) and trustee(s) which does not have to contain the names of beneficiaries. If the Trust Deed is deposited with the Registrar of Trusts, it will not be publicly available, and later instruments (eg naming beneficiaries) will not have to be revealed; if the Trust Deed is not deposited within 12 months, details of the Trust must be placed on the public register. A registration fee of US$200 (at the time of writing) is payable on registration.

Some of the characteristics of Liechtenstein Trusts are as follows:

  • a trustee (apart from the Liechtenstein professional mentioned above) can be an individual or a corporation or association;
  • trustees are liable for breach of trust to the full extent of their assets; joint trustees are jointly liable; supervision of the trust is ultimately under the Court, even if the Trust Deed specifies alternative supervision;
  • the interests of named beneficiaries can be embodied in trust certificates, which if registered are transferable securities;
  • being a civil law jurisdiction, trust assets are vulnerable to forced heirship provisions, although there are time limitations on such claims;
  • in general, there is a limitation of one year on creditors' claims;
  • trust documents, including the Trust Deed, can be in any language.

Trusts may be set up under foreign law, but may not have more favourable treatment than would apply under Liechtenstein law. A trust under foreign law is a Liechtenstein Trust and subject to local taxation. Liechtenstein law applies to a foreign trust if the trustee, or more than half of the trustees, are resident in Liechtenstein, if the trust property is in Liechtenstein, or if the Trust Deed says so.





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