The Principality of Liechtenstein has been a leading jurisdiction for private foundations since the introduction of the Persons and Companies Act (PGR) in 1926. Liechtenstein foundations are widely recognized as one of the most effective tools for long-term asset protection and intergenerational succession planning.
Why Liechtenstein?
- Legal stability – the foundation law has been stable for nearly 100 years with only evolutionary, not revolutionary changes.
- Strong privacy protections – foundation documents are not publicly accessible.
- Professional judiciary – three-instance court system with specialized expertise in foundation matters.
- Political and economic stability – AAA credit rating, low public debt, stable political system.
Key features of a Liechtenstein foundation:
- Minimum capital – CHF 30,000 (or EUR equivalent).
- Founder – the person who contributes assets and defines the foundation’s purpose in the founding documents.
- Foundation Council – the governing body, minimum 2 members, at least one must be a Liechtenstein-qualified person.
- Beneficiaries – defined by the founder in the statutes or by-laws (may be discretionary).
- Supervisory authority – the FMA (Financial Market Authority) for charitable foundations; private foundations are generally not supervised.
Tax treatment:
- Minimum annual tax of CHF 1,800 (Mindestertragssteuer).
- No tax on distributions to beneficiaries (at the Liechtenstein level).
- Tax implications in the beneficiaries’ countries of residence must be analyzed separately.
Establishment procedure:
- Preparation of founding documents (statutes, by-laws, founding declaration).
- KYC/AML verification of the founder and beneficiaries.
- Notarial deed or certified private document.
- Registration with the Commercial Register (optional for private foundations).
- Opening of a bank account and transfer of foundation capital.
Paweł Osiński
Attorney, expert in Liechtenstein foundations and asset protection