Liethtenstein

Forms of Companies in the
Principality Liechtenstein

A Survey
Introduction

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Atrium Incorporators provides a comprehensive range of services in the corporate sector and also in tax and legal consultancy. A staff of near to 20 professional experts are available for personal and discreet customer relationship management.

The information contained in this page gives a first impression of the legal requirements and use of the different corporate company and legal forms available in Liechtenstein. The capital tax (a special form of corporation tax) referred to in this report refers only to holding companies and domicile companies. Companies which conduct commercial activities in Liechtenstein are liable for the normal taxes on capital and income.

Company Limited by Shares (Aktiengesellschaft)

Use:
Suitable for all economic purposes, in particular for international commercial transactions and as a holding organization for subsidiary companies. Other organizational structures are however preferable for the handling of private assets and for asset administration/asset security.

Name and Language

The name can be freely chosen, but enquiries must first be made of the Liechtenstein Land and Public Register Office to establish whether the name is still available. Names of countries, places and national or international organizations are not allowed as part of the name.

The name of the company must include either the word “Aktiengesellschaft” or the abbreviation “AG” or the equivalent expression in another language.

Formation

On average, 5 to 10 days are needed to form a company limited by shares. At least two founding shareholders are required; they may be either natural or legal persons. The formation of the company must be recorded with the Public Register.

Capital

The statutory capital is to be quoted either in Swiss francs (CHF) or in Euros or in US-Dollars; the minimum amount for each currency being 50,000.

The minimum capital must be paid up in full. Evidence of payment of the capital must be provided by a Liechtenstein or Swiss bank.

Purpose

The following purposes can be envisaged:

(a) Commercial purpose
Trading in industrial products and consumer goods and the related financial transactions; the provision of services and consultancies; the purchase and sale of participations and of real estate, and the related financing transactions; the acquisition and marketing of patents, trade marks and licences; intermediary activities and the acceptance of representations.

(b) Purpose of a holding company
The holding and long-term management of participations in other enterprises, as well as related services, such as corporate management, the administration of patents and licences, research and development, coordination and financing of existing subsidi-aries and such yet to be established.

Shares

Bearer or registered shares may be issued. The issue of voting shares, shares with no par value and participation certificates is also possible.

General Meeting

The General Meeting of shareholders is the supreme body of the company limited by shares. Its powers include election of the Board of Directors and the Statutory Auditors, adoption of the business report and fixing of the dividend, granting of a release to the Board and decisions on amendments to the Statutes and on other matters which are reserved for the Annual General Meeting by the Statutes.

Board of Directors

The Board of Directors conducts and manages the company business. It may have one or more members.

At least one member must be a citizen of an EEA (European Economic Area) Member State and have his permanent place of residence in an EEA Member State (A state treaty with Liechten-stein can grant other persons of the respective treaty state the same rights). This sole member must also be authorized to pursue the inland profession of trustee according to the law on trustees. The same authorization applies to citizens of an EEA Member State resident in an EEA Member State (or persons having the same rights due to a state treaty) who possess evidence of a qualification according to art. 2 of the law on trustees. They have also to be in at least one year full-time employment in Liechten-stein of a trustee or a trust company and exercise their activities in the context of that employment relationship according to the first sentence in this alinea. Nationals who are not citizens of an EEA Member State or who do not have the same rights according to a state treaty must have a Liechtenstein residence permit.

Therefore, Swiss nationals with a residence permit are treated in the same way as Liechtenstein citizens in respect of access to the profession of trustee, pursuant to the legislation of the cantons on the basis of reciprocal recognition of the laws.

Persons who want to practise as a licensed trustee must notify the Government of such intention. The Government will check if all conditions are met and will issue a confirmation and set up a list of all relevant persons. Changes of conditions have to be announced immediately to the Government.

Due to transitional provisions attorneys-at-law, legal agents and auditors who held a relevant licence/admittance before enactment of the revised law in spring 2003, can continue practising.

Shareholders

The membership rights of the shareholder comprise his entitlement to have sight of the business report and audit report no later than 20 days before the date fixed for the Ordinary General Meeting, the right to vote at General Meetings, the right to contest decisions, the entitlement to a dividend and a share of the assets remaining after liquidation.

Bookkeeping

The company is required to keep duly drawn accounts.

The annual statement of accounts comprises the balance sheet, the income statement and the notes on the accounts.

The business report consists of the annual statement of accounts and, if necessary, the annual report (situation report). It must be compiled within six months of the end of the financial year.

As a form of company harmonized within the EU, companies limited by shares are subject not only to the general obligation to keep duly drawn accounts but also to special valuation, structural and disclosure regulations, which depend on the size of the company concerned.

For holding companies and domicile companies, the books may be kept in any freely convertible foreign currency and also in the English, French, Italian, Spanish and Portuguese languages.

Disclosure obligation

Within 15 months of the balance sheet date, depending on the size category of the company concerned, companies limited by shares are required to submit the documents listed below to the Land and Public Register Office and then to state, in the official organs for publication, the registration number under which the documents have been submitted to the Land and Public Register Office.

Companies limited by shares are divided into size categories on the basis of the following criteria:

Small Companies

Companies limited by shares are regarded as small if two of the following three size criteria are not exceeded on the balance sheet date:

1. Balance sheet total CHF 6 million
2. Net sales value CHF 12 million in the 12 months prior to the balance sheet date
3. Average number of employees during the financial year: 50

Small companies are required to submit the following documents:
– the abbreviated balance sheet approved by the supreme body of the company with the abbreviated notes (excluding items of the income statement)
– the proposal for use of the profit
– the decision on use of the profit
– information on the annual profit or annual loss where this does not emerge from the abbreviated balance sheet or abbreviated notes

No annual report (situation report of the company) is required.

Medium-Sized Companies

Limited companies are regarded as medium-sized if two of the above size criteria are passed but two of the following three size criteria are not exceeded on the balance sheet date:

1. Balance sheet total CHF 24 million
2. Net sales value CHF 48 million in the 12 months prior to the balance sheet date
3. Average number of employees during the financial year: 250

Medium-sized companies must in principle submit the same documents as big companies. The balance sheet and notes may, however, be substantially abbreviated.

Large Companies

As soon as two of the criteria applicable to medium-sized companies have been exceeded, a company is deemed to be a large company limited by shares.

Large companies must submit the following documents:

– the annual statement of accounts approved by the supreme body of the company with the notes
– the audit report of the statutory auditors
– the proposal for use of the profit
– the decision on use of the profit
– information on the annual profit or annual loss in so far as this does not emerge from the annual statement of accounts.

The annual report (situation report of the company) does not have to be submitted to the Land and Public Register Office but, together with the other documents referred to above, must be kept freely available for inspection at the registered office of the company; on request, copies must be made available against payment of the cost incurred.

Consolidation Obligation

Companies limited by shares which have subsidiary companies may be required, if certain conditions (size criteria, ownership conditions etc.) are met, to compile a consolidated business report consisting of the consolidated annual statement of accounts (consolidated balance sheet, income statement and notes) and the consolidated annual report.

Statutory Auditor

A statutory auditor authorized by the Liechtenstein Government must be appointed for the company limited by shares.

Filing of the Annual Accounts

The annual accounts verified by the auditors must be submitted to the Liechtenstein tax authority every year within six months of the last day of the financial year.

Representation

Companies limited by shares which are holding companies or domicile companies must appoint a national of an EEA Member State permanently resident in Liechtenstein as the company representative. The representative is the official address for mail and representation of the company in relation to the Liechtenstein authorities (e.g. post office, tax authority, Land and Public Register Office).

The representative (representation) may also be a domestic corporate entity.

Creation

The company limited by shares is created when it has been entered in the Public Register (Commercial Register).

Liquidation

The supreme body of the company decides on the winding up and liquidation of the company. The company may not be wound up until six months have elapsed after the third call for creditors to make themselves known, provided that no further commitments exist.

Transfer of Registered Office

Transfer of the registered office of the company to or from Liechtenstein is possible.

Double Taxation Agreement

Liechtenstein has not concluded any double taxation agreements with other states relating to holding companies / domicile com-panies.

Tax

Companies limited by shares which are holding companies or domicile companies are required to pay a specific corporation tax taking the form of a capital tax. This amounts to 0.1 % of the paid up capital or of the assets invested in the company and of the reserves, subject to a minimum annual sum of CHF 1,000 payable in advance.

A coupon tax of 4 % is levied on profit distributions and on the proceeds of liquidation.

Establishment  (Anstalt) And
Trust Enterprise (Treuunternehmen / Trust reg.)

Use

The establishment and trust enterprise are highly versatile forms of legal entity specific to Liechtenstein. They can be structured like a corporation (for commercial purposes) or have features similar to those of a foundation (for non-commercial purposes).

Name and Language

The name of the legal entity can be freely chosen, but enquiries must first be made to the Liechtenstein Land and Public Register Office to establish whether the name is still available. Names of countries, places and national or international organizations are not allowed as part of the name.

The chosen name of the entity must always be accompanied by the full designation of its legal form: e.g. “Anstalt” (establishment), “registriertes Treuunternehmen” (Trust Enterprise or Trust Reg.) or the corresponding foreign language expression.

Formation

Formation generally takes 3 to 5 days on average. One founder, who may be a natural or legal person, will suffice.

Capital

The statutory capital must be paid up in Swiss francs (CHF) or in Euros or in US-Dollars. The law prescribes a minimum amount of 30,000 for each currency.

The minimum capital must be paid up in full. Evidence of payment of the capital must be provided by a Liechtenstein or Swiss bank.

Purpose

The following purposes can be envisaged:

(a) commercial purpose
Commercial transactions, the management and exploitation of intangible assets, the purchase and sale of real estate, the management of company assets, as well as participation in other enterprises.

(b) non-commercial purpose
The holding and management of its own assets, in particular participations, real estate, patents, licences and other rights, as well as related financial and legal transactions.

Holder(s) of founder’s rights/ Holder(s) of the settlor’s rights: The holder of the founder’s rights / holder of the settlor’s rights is the supreme body of the legal entity. The founder’s rights are generally transferred by means of an act of assignment of the founder’s rights. The Statutes may also stipulate that the rights and powers of the supreme body rest with the Board (Board of Directors / Board of Trustees).

Status of the Act of Assignment

The act of assignment of the founder’s rights / settlor’s rights (Zessionserklärung) is a document attesting the ownership and also embodies the right to a share of the profit, save where other-wise stipulated in any by-laws.

Board

The administration of an establishment rests with the Board of Directors and, in the case of a trust enterprise with the Board of Trustees. It may have one or more members.

At least one member must be a citizen of an EEA (European Economic Area) Member State and have his permanent place of residence in an EEA Member State (A state treaty with Liechten-stein can grant other persons of the respective treaty state the same rights). This sole member must also be authorized to pursue the inland profession of trustee according to the law on trustees. The same authorization applies to citizens of an EEA Member State resident in an EEA Member State (or persons having the same rights due to a state treaty) who possess evidence of a qualification according to art. 2 of the law on trustees. They have also to be in at least one year full-time employment in Liechten-stein of a trustee or a trust company and exercise their activities in the context of that employment relationship according to the first sentence in this alinea. Nationals who are not citizens of an EEA Member State or who do not have the same rights according to a state treaty must have a Liechtenstein residence permit.

Therefore, Swiss nationals with a residence permit are treated in the same way as Liechtenstein citizens in respect of access to the profession of trustee, pursuant to the legislation of the cantons on the basis of reciprocal recognition of the laws.

Persons who want to practise as a licensed trustee must notify the Government of such intention. The Government will check if all conditions are met and will issue a confirmation and set up a list of all relevant persons. Changes of conditions have to be announced immediately to the Government.

Due to transitional provisions attorneys-at-law, legal agents and auditors who held a relevant licence/admittance before enactment of the revised law in spring 2003, can continue practising.

Beneficiaries

The benefit from the income and/or assets accrues to the creator of the company (founder of an establishment, settlor of a trust enterprise) or, depending on the statutory provisions, to some other body or third party. This will be stipulated in the Statutes or in the by-laws. The by-laws, which generally form an integral part of the Statutes and frequently take precedence over the latter, do not have to be deposited with the Land and Public Register Office. They may be revocable or irrevocable, modifiable or unalterable. If no beneficiaries are designated, the creator of the company is generally assumed to be the beneficiary. The statutory provisions on inheritance will then apply. Under certain provisions in the law and conditions included in the Statutes of the legal entity, the beneficiaries may be protected against action by creditors.

Bookkeeping

Appropriate accounts must be kept for both these legal forms. If the legal entity pursues a commercial trade, it is required to produce full accounts and at the end of each financial year must present an annual statement of accounts, consisting of the balance sheet, income statement and, where appropriate, notes to the annual statement of account. The annual statement of account must be drawn up within six months of the last day of the financial year.

The account books may be kept in any freely convertible foreign currency and may also be written in English, French, Italian, Spanish and Portuguese language.

Statutory Auditors

Statutory auditors must be appointed if the legal entity pursues a commercial trade or if the Statutes provide for the pursuit of such a trade. The statutory auditors must be authorized by the Liechten-stein Government.

Filing of the Annual Accounts

If a commercial business is pursued, the annual statement of accounts verified by the statutory auditor must be presented annually within six months of the last day of the financial year to the Liechtenstein tax authorities.

Declaration

If no commercial trade is pursued and the Statutes do not permit the pursuit of such a trade, a member of the Board of Directors who satisfies the requirements set out on page 10 in the heading “Board” must file a declaration with the Land and Public Register Office. This declaration must confirm that a statement of assets exists and that no commercial business was pursued in the previous year. The statement of assets does not have to be submitted.

Representation

Establishments and trust enterprises with the character of a holding company or domicile company must appoint a national of an EEA Member State who is permanently resident in Liechten-stein as a representative of the legal entity. The representative is the official address for mail and representation of the legal person in relation to the Liechtenstein authorities (e.g. post office, tax authority, Land and Public Register Office).

The representative (representation) may also be a domestic corporate entity.

Creation

Both types of legal entity are created on entry in the Public Register.

Liquidation

The supreme body decides on winding up and liquidation. The legal entity may not be wound up until six months have elapsed, following the third call for creditors to make themselves known, and provided that no further commitments exist.

Double taxation agreement

Liechtenstein has not concluded any double taxation agreements with other states relating to holding companies / domicile com-panies.

Tax

Establishments and trust enterprises with the character of a holding company or domicile company are required to pay a specific corporation tax taking the form of a capital tax. This amounts to 0.1 % of the paid up capital or of the assets invested in the company and of the reserves subject to a minimum annual sum of CHF 1,000 payable in advance.

Foundation (Stiftung)

Use

The foundation may be formed as a pure family foundation (e.g. to pay the costs of maintenance, education, training, endowment and support etc), as a non-profit foundation (e.g. to support and promote charitable, artistic, scientific and social purposes) or also as an ecclesiastical foundation. It may also be used purely for maintenance purposes. The foundation is not suitable for purely commercial purposes. Commercial activities may only be pursued if they serve to achieve the non-commercial purpose or if the nature and scope of the participations which are held require a commercial operation.

Name and Language

The name of the foundation can be freely chosen in any language, but enquiries must first be made to the Liechtenstein Land and Public Register Office to establish whether the name is still available. Names of countries, places and national or international organizations are not allowed as part of the name. The chosen name must always be accompanied by the designation “Stiftung” (Foundation) or “Familienstiftung” (Family Foundation) or the corresponding foreign language expression in unabbreviated form.

Formation

The foundation may be set up by an individual (natural person) or by a corporate entity (legal entity). No prescriptions in respect of nationality or domicile apply to the founder.

The Formation May be Arranged

(a) through a foundation deed, which must be attested by the signature of the founder
(b) by a last will and testament
(c) by an inheritance contract

As a general rule, the foundation is formed through a foundation deed. This takes 3 to 5 days to implement.

Foundation Fund

The foundation fund is to be paid up in full in Swiss francs (CHF) or in Euros or US-Dollars and has to amount to not less than 30,000 for each currency.

Purpose

The following purpose is possible:

Investment and management of the foundation’s assets, as well as distributions to beneficiaries in accordance with the by-laws and regulations.

Depositing of the Formation Documents

Pure and mixed familiy foundations, ecclesiastical foundations and foundations whose beneficiaries are or may be specified, have an obligation to deposit the formation documents with the Land and Public Register Office (excluding any by-laws). The deposited foundation information does not then exist in any Register accessible to the public and inspection of information is only possible if evidence of a justified interest can be proved.

Entry in the Public Register

An obligation to register exists for those foundations which, for the attainment of their non-economic purpose, pursue a trade con-ducted in a commercial manner or if the nature and scope of the participations held involve a commercial operation.

Foundation Board

The Foundation Board is the supreme body, which conducts the business of the foundation within the meaning of the Statutes, any by-laws or any regulations. It may have one or more members.

At least one member must be a citizen of an EEA (European Economic Area) Member State and have his permanent place of residence in an EEA Member State (A state treaty with Liechten-stein can grant other persons of the respective treaty state the same rights). This sole member must also be authorized to pursue the inland profession of trustee according to the law on trustees. The same authorization applies to citizens of an EEA Member State resident in an EEA Member State (or persons having the same rights due to a state treaty) who possess evidence of a qualification according to art. 2 of the law on trustees. They have also to be in at least one year full-time employment in Liechten-stein of a trustee or a trust company and exercise their activities in the context of that employment relationship according to the first sentence in this alinea. Nationals who are not citizens of an EEA Member State or who do not have the same rights according to a state treaty must have a Liechtenstein residence permit.

Therefore, Swiss nationals with a residence permit are treated in the same way as Liechtenstein citizens in respect of access to the profession of trustee, pursuant to the legislation of the cantons on the basis of reciprocal recognition of the laws.

Persons who want to practise as a licensed trustee must notify the Government of such intention. The Government will check if all conditions are met and will issue a confirmation and set up a list of all relevant persons. Changes of conditions have to be announced immediately to the Government.

Due to transitional provisions attorneys-at-law, legal agents and auditors who held a relevant licence/admittance before enactment of the revised law in spring 2003, can continue practising.

The founder loses his rights in that capacity after the formation of the foundation. However, he may exercise his rights as a Member of the Foundation Board, custodian or other controlling body or stipulate his special rights in the by-laws. On formation of the foundation, the founder may for instance also appoint the controlling body (statutory auditors). Each member of the Foundation Board is personally responsible for compliance with the Statutes, the by-laws and the regulations.

Beneficiaries

As a general rule, the founder stipulates in the Statutes, but more usually in the by-laws, as to the allocation of the income and/or assets of the foundation, the beneficiaries of the foundation, their number and their specific benefit rights. The by-laws, which generally constitute an integral part of the Statutes, do not have to be deposited with the Land and Public Register Office. The by-laws may be revocable or irrevocable, modifiable or invariable. If no beneficiaries are appointed, it is generally assumed that the founder himself is the beneficiary. The statutory inheritance ranking then applies.

The creditors can only claim against the assets of the foundation in respect of the liabilities of the foundation. In the case of family foundations, the founder may stipulate that the benefit of the foundation accruing to the beneficiaries without charge cannot be withdrawn by way of injunction, levy of execution or bankruptcy proceedings. The beneficiaries have a right to seek information from the foundation and its bodies.

Bookkeeping

In the case of a deposited foundation, suitable records of the foundation’s activities must enable the asset situation of the foundation to be determined at any time.

Foundations entered in the Public Register, which pursue a com-mercial business for the attainment of their non-economic purpose, are required to keep proper accounts.

Auditors

Auditors are required for a registered foundation, which pursues a commercial business for the attainment of its non-economic purpose.

Declaration

Foundations which are voluntarily registered in the Public Register, which do not pursue a commercial activity and whose Statutes prohibit the pursuit of such a trade are required to arrange for a member of the Foundation Board who satisfies the requirements set out on page 14 under the heading “Foundation Board” to make a declaration to the Land and Public Register Office. This declara-tion must confirm that a statement of assets and liabilities is avail-able and that no commercial activity was pursued in the previous year. The statement of assets and liabilities does not have to be submitted.

Filing of Accounts

In so far as the registered foundation pursues a commercial activity for the attainment of its non-economic purpose, the annual statement of accounts verified by the statutory auditors must be submitted to the Liechtenstein tax authorities within six months of the end of the financial year.

Representation

Foundations must appoint a national of an EEA Member State who is permanently resident in the Liechtenstein as the foundation representative. The representative is the official address for mail and represents the foundation in relation to the Liechtenstein authorities (e.g. the post office, tax authority, Land and Public Register Office).

The Representative (Representation) May Also be a Domestic Corporate Entity

Termination and Liquidation

A deposited foundation may be closed down when it attains its purpose or by revocation or annulment. Revocation is permitted only within the restricted limits laid down by law, subject to express provisions in the foundation deed. A foundation will be annuled automatically as soon as its purpose has become impossible to attain, in particular if the foundation purpose can no longer be achieved, if it has no more assets, is unable to continue to perform its tasks for lack of sufficient assets or if the duration stipulated in the foundation deed or in the statutes has expired.

Preparations by the Foundation Board and the Land and Public Register Office for annulment of the foundation take about 5 days.

These comments also apply to registered foundations. When it is determined that the foundation has no further assets, it will be immediately annuled; the performance of a liquidation procedure is therefore not necessary. The liquidation procedure lasts for at least 6 months until the foundation ceases to exist, as a blocking period of 6 months must be respected from the time when the third call is made for creditors to make themselves known. In response to a reasoned application, approval for the liquidation procedure to be shortened and for the foundation assets to be distributed and the foundation closed down before the expiry of the six months blocking period may be granted by the Land and Public Register Office. The liquidation procedure ends when the name of the registered foundation is deleted from the Public Register.

The right of termination or liquidation (by means of a decision called “Determination”) normally rests with the highest body, i.e. the Foundation Board.

Double Taxation Agreement

Liechtenstein has not signed any double taxation agreements con-cerning foundations with other countries.

Taxes

The foundation must pay a capital tax on the foundation funds and reserves (foundation assets). This amounts to 0.1 % subject to a minimum of CHF 1,000 payable annually in advance.

If the foundation fund and reserves exceed CHF 2 million, the capital tax is reduced to 0.075 % and in the case of a fund and reserves in excess of CHF 10 million to 0.05 %.

Payments by the foundation to beneficiaries domiciled abroad are not liable for any tax in Liechtenstein.

Trust (Treuhänderschaft)

This section deals with the so called “Private Express Trust”. A trust may be revocable or irrevocable, modifiable or unalterable.

Purpose

Unlike the Anglo-American model, the trust in Liechtenstein law may be set up for an indefinite period. It can be used in the same way as a foundation, but permits more flexible arrangements as its purpose is not limited in any way, as is the case under foundation law. The trust is the legal relationship created by a trust agreement between the settlor and the trustee whereby the settlor assigns fixed or movable assets or rights to the trustee. The trustee is required to manage and use the assets entrusted to him in his own name pursuant to the directives drawn by the settlor for the benefit of one or more third parties (beneficiaries).

Name and Language

The name of the trust can be freely chosen in any language, but enquiries must first be made to the Liechtenstein Land and Public Register Office to establish whether the name is still available. Names of countries, places and national or international organizations are not allowed as part of the name.

The chosen name must always be accompanied by the word “Treuhänderschaft” or “Trust” in unabbreviated form.

Capital

No minimum founding capital is prescribed. The trust may, for example, be endowed with CHF 1,000.

Formation

The participants are:

– the settlor (founder) hereby the terms of the contractual relationship must be set out in writing (trust deed = act of con-stitution)
– the trustee or trustees (acceptance of the office in written form)
– the beneficiary or beneficiaries

Creation

The formation of the trust is effected when the trust deed is signed by the settlor and trustee or by a letter or declaration of trust. The optional entry in the Public Register (instead of depositing) does not have any constitutive effect. Liechtenstein law embodies no provisions preventing perpetuation.

Registration/Depositing

Where an entry in the Public Register is desired, the following information must be given: date of formation, designation of the trust, duration (limited or unlimited), name and address of the trustees. As an alternative to registration, the possibility of depositing the trust deed with the Land and Public Register Office exists. A deposited trust does not then exist in any register acces-sible to the public and inspection of information provided is pos-sible only if evidence of a justified interest can be produced.

Trustee

The trustee or trustees is/are the body responsible for the trust and hold and manage the assets of the trust in their own name and are personally liable to the settlor and the beneficiaries with their entire assets. The trustees may be any natural or legal person, regard-less of their place of residence, registered office or nationality.

At least one trustee must be a citizen of an EEA (European Economic Area) Member State and have his permanent place of residence in an EEA Member State (A state treaty with Liechten-stein can grant other persons of the respective treaty state the same rights). This sole member must also be authorized to pursue the inland profession of trustee according to the law on trustees. The same authorization applies to citizens of an EEA Member State resident in an EEA Member State (or persons having the same rights due to a state treaty) who possess evidence of a qualification according to art. 2 of the law on trustees. They have also to be in at least one year full-time employment in Liechten-stein of a trustee or a trust company and exercise their activities in the context of that employment relationship according to the first sentence in this alinea. Nationals who are not citizens of an EEA Member State or who do not have the same rights according to a state treaty must have a Liechtenstein residence permit.

Therefore, Swiss nationals with a residence permit are treated in the same way as Liechtenstein citizens in respect of access to the profession of trustee, pursuant to the legislation of the cantons on the basis of reciprocal recognition of the laws.

Persons who want to practise as a licensed trustee must notify the Government of such intention. The Government will check if all conditions are met and will issue a confirmation and set up a list of all relevant persons. Changes of conditions have to be announced immediately to the Government.

Due to transitional provisions attorneys-at-law, legal agents and auditors who held a relevant licence/admittance before enactment of the revised law in spring 2003, can continue practising.

Beneficiaries

The beneficiaries may require the trust provisions to be performed and enforced by the courts if the trust deed does not leave the execution of benefits or the nature of the benefits to the discretion of the trustee. The settlor himself may be the beneficiary or even the sole beneficiary. If no references to the beneficiary are known, the supposition will be that the settlor is the beneficiary. The statutory inheritance ranking then applies.

Bookkeeping

The trustee is required to keep records of the assets forming the trust property and to adjust them annually. The trustee must be in a position to provide information on the financial status of the trust.

Filing of Accounts

No balance sheet has to be submitted to the Liechtenstein tax authorities.

Statutory Auditors

To safeguard compliance with the provisions of the trust deed by the trustee, statutory auditors a protector or custodian may be appointed.

Representation

The appointment of a local representative is not necessary.

Applicable Law

The trust deed must explicitly state that the Trust is subject to Liechtenstein law.

Trusts subject to foreign trust laws too, may be set up in Liechtenstein, with a global reference in the trust deed controlling the internal legal relationship between the parties involved made subject to foreign law, but still as regards external relationship subject to Liechtenstein law as against third parties.

Termination/Revocation

By virtue of the principle of freedom of the individual to make personal arrangements, the settlor may freely stipulate in the trust deed the reasons or conditions for termination of the trust, e.g. by designating authorized persons, on the occurrence of an event which constitutes a condition, when the entire trust assets have been used for the intended purpose and are no longer available or in the event of other performance of the material purpose of the trust or else upon expiry of a specified period.

Where This is Stipulated in the Trust Deed, a Trust May be Revoked

– with the assent of all the beneficiaries, the settlor and the trustee
– by the settlor
– automatically

In the absence of other provisions in the trust deed, the trustee is required to manage the trust for at least one administrative year. Otherwise the trustee is authorized to terminate the trust with effect from the end of any calendar year by giving three months advance notice.

Amendment of the applicable law and transfer to another jurisdiction:
Amendment of the applicable law and transfer of the trust to another jurisdiction takes place by a decision of the trustees according to the regulations of the trust deed.

Double Taxation

Liechtenstein has not concluded any double taxation agreement

Agreement

applicable to trusts.

Tax

Trusts must pay a capital tax on the net trust assets. This is levied at the rate of 0.1 %, subject to a minimum of CHF 1,000 and is payable annually in advance.

Payments to beneficiaries domiciled abroad are not liable for any tax in Liechtenstein.

Asset Protection Trust (A.P.T.)

Liechtenstein legislation makes the following main provisions:

Creditors of the Settlor

The settlor should settle the trust at a time when he has no creditors and does not infringe any statutory inheritance claims.

The creditors may file claims for a maximum period of five years.

Heirs of the Settlor

Heirs may bring a claim within a maximum period of three years after the death of the settlor if their statutory inheritance rights have been infringed.

Creditors of the Beneficiaries

The creditors of the beneficiaries may only file claims on the trust assets by compulsory enforcement or bankruptcy proceedings to the extent that claims accrue personally and directly to the beneficiaries and to the extent that the trust deed does not specifically contain a provision on the inalienable nature of the benefits.