Offshore Trusts Report: Liechtenstein
Legal Framework and Formation Rules and Fees
Liechtenstein is the only civil law jurisdiction which
has adopted largely anglo-saxon trust legislation (contained in
the PGR Code), although, unlike the common law trust, there is no
bar against accumulation of income, nor against perpetuities.
Liechtenstein is home to a thriving business in trust
management. Although other local corporate forms offer partial substitutes
for the trust, it remains a highly effective means of asset protection,
and non-anglo-saxon clients are often more comfortable with Liechtenstein
as a jurisdiction than they might be with, for instance, an ex-British
A Liechtenstein Trust is set up by a written agreement
(Trust Deed) between the trustor (settlor) and trustee(s), or by
a written Declaration of Trust by the trustor, matched by a written
Acceptance of Trust by the trustee. The legislation in fact does
not speak of 'trusts' but of 'trusteeship'.
The Trust Deed does not have to contain the names
of beneficiaries. If the Trust Deed is deposited with the Registrar
of Trusts, it will not be publicly available, and later instruments
(eg naming beneficiaries) will not have to be revealed; if the
Trust Deed is not deposited within 12 months, details of the trust
must be placed on the public register, comprising:
a description of the trust;
the date of formation;
the duration of the trust;
the name (or trade name) and address of the trustee.
A registration fee is payable on registration. A
trust under foreign law is a Liechtenstein Trust and subject to
local taxation. Liechtenstein Trusts are taxed annually on their
capital value at 0.075% if capital is between SFr 2m and 10m,
and 0.05% if capital is over SFr 10m (at the time of writing).
Payments to non-resident beneficiaries of a Trust are free of
The trustor can make quite specific arrangements
in the Trust Deed covering the identification of beneficiaries,
and future procedures of various types; the trust property must
be separated from the trustor's other assets, and the trustee
can take action to enforce this against the trustor under contract
law. The Deed must not bind the trustee to the trustor's continuing
directions, or the trust will lapse into ordinary contract law.