Liechtenstein Foundations

Key Advantages

• Separation of assets to increase anonymity

• Protection of the foundation’s assets in general

• Asset transmission and management covering of several generations;/li>

• Protection of separate family members

• Protection against the claims of creditors (segregation)

• Tax planning

Tax Benefits

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.

Legal Form

The foundation, also known as 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.

The Liechtenstein Foundation is an ideal portfolio investment vehicle from the management of numbered accounts to the structuring of complicated estates. Investors wishing to shelter their assets from high taxes, to maximize asset protection and at the same time to maintain personal control over their assets as well as provide for the orderly devolution of their worldly goods upon their death, are well advised to consider the Liechtenstein foundation.

Liechtenstein foundations which manage offshore funds pay practically no taxes in Liechtenstein and are free from official supervision.

Available Types

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.

Share Capital

The minimum capital (foundation capital) required is CHF 50,000. 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.

Reporting Requirements

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.