Liechtenstein Foundation Formation

DeltaQuest offer comprehensive foundation services to support individuals and corporate entities in setting up and managing a Liechtenstein international foundation in accordance with the relevant foundation laws. We will find you a tailored asset protection solution and will assist you in the formation of your Liechtenstein foundation, every step of the way.

In order to proceed with the formation of the Liechtenstein international foundation, please complete our Trust Application Form.

Conditions for a Liechtenstein foundation formation

Legal form: The Liechtenstein foundation is governed by the Liechtenstein Foundation Law 2008. 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 name of the foundation must be approved by the Liechtenstein Registry.  It is not permissible to use place names, or well-known international names. Additionally names indicating banking, insurance or collective investment type activities cannot be used without the appropriate license for the indicated activity.

Types of the foundation:  There are two basic types of Liechtenstein foundation, ‘registered’ and ‘deposited’. If the foundation is registered, the formation documents 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. The deposited foundation is most frequently used and gives the highest degree of confidentiality.

Founder: The founder is the individual or group who forms the foundation and transfers their property into the foundation. A founder may serve as a member of the foundation council, as a beneficiary or as protector, and has the power to remove council members, beneficiaries or a protector if he desires. He can also assign these powers to another person in the foundation.

Protector: A protector performs the function of the ultimate controller of the foundation. Immediately upon incorporation of the foundation, the council appoints a protector.

Beneficiaries: According to the foundation law, contributions can be made unconditionally. The beneficial interest can be limited in time and linked to conditions or restrictions. Furthermore, the beneficial interest of under-age children or spouses can be adapted to their specific needs at any time by distributions or by support during the educational period. In addition, the foundation may be used as an instrument to preclude the splitting of a company through succession, by including the companies in a foundation.

Foundation council: The foundation council members are those who implement and supervise the foundation’s activity and purpose.

Share capital: The minimum capital (foundation capital) required is CHF 30,000. Before the foundation is established it is a requirement to pay up the nominal capital by transferring it into a Liechtenstein bank, which must give a certificate to the registry to verify that the required capital has been paid up.

Taxation: 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.

Annual reporting: The registered agent is required to pay the capital tax to the Liechtenstein Registry every year. Audited accounts are not generally required; instead an internal statement of assets has to be drawn up by the foundation council.

Time needed for trust formation: The Liechtenstein foundation can be founded within 3 business days from the ordering date.

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