Country code – LI
Legal Basis – Civil law
Legal framework – Persons and Companies Act 1926 (as amended)
Regulatory board - Liechtenstein Office of Land and Public Registration
Entity – Stiftung (Foundation)
Liability - A foundation has its own separate legal personality, the properties and resources of it constitute an independent patrimony from that of the Founders, the Foundation Council members, Protector, and Beneficiaries.
Dedication of assets – A Stiftung must have an initial endowment of assets or cash with a value of at least CHF30,000.
Founder – The founder of a Liechtenstein foundation has to determine the purpose of the foundation and establish the group of beneficiaries in the foundation documents. The founder may be a natural or legal person, resident or non-resident
Foundation Council – The supreme authority of the Foundation is the Foundation Council. At least one member of the foundation council must have his law office address in Liechtenstein and be in possession of certain professional qualifications. The foundation council may be formed by one or more natural or legal persons, residents or non-residents.
Protector – An optional role that is defined in the statutes. The protector is the representative of the beneficiaries and ensures that the board is acting to implement the purpose of the foundation. The protector may be a corporate body and its details are not publicly disclosed.
Beneficiaries – The rights of the beneficiary of the Liechtenstein foundation are regulated in the articles of association and by-laws. The founder can be a beneficiary.
Regarding the issue of claims, there are different types of beneficiaries:
Beneficiaries of prospective entitlements of the Liechtenstein foundation have a legal claim, fixed in the foundation documents.
Discretionary beneficiaries designated by the founder. Their benefit interest is at the discretion of the foundation council. Discretionary beneficiaries have no actionable claim
The ultimate beneficiaries receive the remaining assets of the foundation after its liquidation, according to the foundation documents.
The beneficiaries have the right to confidentiality.
Beneficiaries’ right to information - Liechtenstein law contains possibilities to restrict the information rights of beneficiaries by transferring those rights to other bodies such as an internal controlling body (similar to a protector) to carry out supervisory duties. In such cases, the rights of the beneficiaries can be limited to an indefeasible minimum (their own rights, the foundation's purpose, the organization of the foundation). In the case of charitable foundations, which are generally subject to the supervision of the authorities, the beneficiaries have no information rights.
Regulated Person – At least one member of the foundation's council (the representative) that is authorized to manage and represent the foundation must be a qualified professional with a place of residence in Liechtenstein.
Foundation Deed – It contains the key elements of the foundation and must be signed by either the founder or the founder's agent with the signatures authenticated. The name of the foundation, the foundation purpose, the appointment and functioning of the foundation council, and the identity of the founder or his agent should the founder decide to remain anonymous. Hence, if a foundation is set up by an agent, the founder need not sign any foundation documents and is not identified in the Foundation Articles.
Additionally, the founder can also set up a Supplementary Foundation Deed (By-laws), which can deal with areas that need not necessarily be included in the Foundation Articles such as provisions regarding the beneficiaries. The supplementary foundation deed can be issued only if the Foundation Articles specifically say that they can.
Re-domiciliation – A Liechtenstein Anstalt or Stiftung may continue into a foreign jurisdiction. There is a charge of CHF 600.00.
Mergers - There is no ability for an Anstalt or Stiftung to merge with any other entity.
Charitable/Philanthropic Purposes - Permitted.
Compliance – Foundations which operate a business along commercial lines, which is only permissible under very limited circumstances, will be subject to the general accounting standards. These foundations must produce a balance sheet as well as annual audited financial statements. For all other common-benefit or private-benefit foundations, the foundation council must keep records of the use of foundation assets.
Private-benefit foundations whose Foundation Articles make them subject to voluntary oversight by the Foundation Supervisory Authority, may appoint an auditor. The auditors constitute a mandatory body of the foundation. The auditors are under an obligation to verify once a year whether the foundation assets are being managed and used in accordance with the foundation purpose. An audit report must be submitted to both the foundation council and the Foundation Supervisory Authority. Auditors, auditing firms, professional trustees or trust companies can be appointed as the auditors.
Foundations are subject to an annual charge of 0.1% of the nominal capital and net asset value, or a minimum of CHF1000. Annual charge of 0.075% on net asset value in excess of CHF 2 million, annual charge of 0.05% on net asset value of CHF 10 million and above.
The registration fee is up to CHF700 depending on the type of foundation. Private interest foundations merely deposit the foundation charter with the Public Registrar (for declaration purposes). Charitable foundations (as well as foundations with a combination of charitable and private purposes) only come into effect when they are entered on the public register.
- Corporate founder permitted
- Corporate council members permitted
- Protector/Guardian required
- Local regulated person required
- Founder not disclosed in a public registry
- Council members not disclosed in a public registry
- Protector/Guardian not disclosed in a public registry
- Beneficiaries not disclosed in a public registry
- Beneficiaries have right to information
- Merge permitted
- Redomiciliation permitted
- Charitable purposes permitted
- Registered agent required
- Civil law Legal basis
- CHF 30,000 Initial endowment of assets
- 1 Minimum council members
- CHF700 Registration fee
- CHF1000 Annual government fee
- 2018 AEOI
Liechtenstein foundations engaging economic activities are taxed as corporations and subject to a 12.5% profit tax. Investment income and capital gains may be exempted from taxation, under certain conditions.
Alternatively, foundations that only hold private wealth or investments and do not carry out economic activities may apply for the tax status of a Private Asset Structure. Foundations considered Private Asset Structures are only liable to pay the minimum annual profit tax of CHF 1,200, and tax return filing may not be required.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 12.5% Offshore Income Tax Rate
- 12.5% Corporate Tax Rate
- 12.5% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFOAverage cost Inventory methods permitted
- 5.00% Social Security Employee
- 7.25% Social Security Employer
- 28% Personal Income Tax Rate
- 8% VAT Rate
- 37 Tax Treaties
The Principality of Liechtenstein is a small German-speaking landlocked state of alpine Europe that borders with Switzerland to the west and Austria to the east.
It is an enclave that, along with Switzerland, is not part of the European Union, but is part of the Schengen Area.
Its international relations are coordinated with Switzerland (the state with whom it delegates its military defense).
It has an area of just over 160 sq. km and it is inhabited by about 37,000 people. The capital is Vaduz and the most populated city is Schaan.
Liechtenstein is the fourth smallest country in Europe, after Vatican City, Monaco, and San Marino. Its resident population is composed of about a third of foreigners, mainly Germans, Austrians, Swiss, and Italians.
Liechtenstein is a constitutional monarchy, headed by the prince, or Fürst. The sovereignty of the state is shared between the prince and the citizens, who choose a parliament. The parliament of Liechtenstein, the Landtag, is composed of 25 representatives chosen by the people. A five-member chamber is responsible for daily political affairs.
The country has an economic union with Switzerland and uses the Swiss franc as the national currency, although it had its own currency, the Liechtenstein franc.
Liechtenstein is a member of the European Economic Area (an organization that acts as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.
Its economy, despite its small size and scarcity of natural resources, is highly industrialized, free-enterprise oriented and has the third highest per capita income in the world, after Qatar and Luxembourg.
Its economic bases are industrial exports, tourism, and financial services.
Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals, and food products.
It has an important financial center, specialized in financial services for foreign entities and wealth management for non-resident individuals.
Low business taxes and very advantageous incorporation laws have led to a significant number of multinational companies to establish nominal offices in Liechtenstein.
Regarding the primary sector, it produces wheat, barley, corn, potatoes, dairy products, livestock, and wine.
Tax treaties Map
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