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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 colony.

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 withholding tax.

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.

The Report

Offshore Trusts Guide: Introduction

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

Liechtenstein News

Guernsey Welcomes Migration Of First Foreign Foundation
Wednesday 8/10/2014
Guernsey's company registry has approved the first ever migration of a foundation from another jurisdiction to Guernsey.

Liechtenstein, Malta Sign DTA
Friday 4/10/2013
Liechtenstein's Foreign Minister Aurelia Frick and her Maltese counterpart George Vella have recently signed in New York a bilateral double taxation agreement between the two countries in respect of taxes on income and on wealth.

Liechtenstein Congratulated On Successful Tax Policy
Thursday 19/9/2013
Standard and Poor's has maintained Liechtenstein's triple A rating, alluding to a stable outlook and highlighting the fact that the Principality's fiscal and financial policies have very much contributed to Liechtenstein's reputation and strength as a safe, reliable, and attractive economic location.

Austria Eyes US FATCA Deal
Friday 10/5/2013
Austrian Chancellor Werner Faymann has announced plans to enter into talks with the US and with the Organization for Economic Cooperation and Development, aimed at combating tax fraud and tax evasion.

Austria Willing To Negotiate With EU On Banking Secrecy
Wednesday 1/5/2013
Austrian Chancellor Werner Faymann and Deputy Chancellor Michael Spindelegger have recently confirmed Austria's willingness "to participate constructively" in negotiations between the European Union and third states on an automatic exchange of banking information.

LGT Headquarters Middle East Business In Dubai
Tuesday 19/2/2013
LGT Group, the international private banking and asset management group, owned by the royal family of Liechtenstein, has chosen Dubai as the headquarters of its new subsidiary, LGT (Middle East) Limited, following regulatory approvals to operate in the Dubai International Financial Center.

Liechtenstein, Austria Close To Tax Agreement
Friday 18/1/2013
Liechtenstein’s Prime Minister Klaus Tschütscher has confirmed plans to conclude a tax package with Austria shortly.

Austria To Agree Swiss-Style Tax Deal With Liechtenstein
Tuesday 15/1/2013
During an upcoming working visit to Vienna, Liechtenstein’s Prime Minister Klaus Tschütscher is due to hold talks with key ministers from the Austrian chancellery and from the finance ministry, with the discussions focussing on the "imminent conclusion" of a bilateral tax agreement between the two countries.

Liechtenstein, UK DTA In Force
Wednesday 2/1/2013
Following the exchange of relevant notifications, the agreement pertaining to the avoidance of double taxation and tax evasion in the area of taxes on income and on wealth between Great Britain and Northern Ireland and the Principality of Liechtenstein has now entered into force.

Liechtenstein, Austria Eye Swift Conclusion Of Tax Deal
Wednesday 12/12/2012
Negotiations between Liechtenstein and Austria on a tax deal aimed at resolving the issue of Austrian citizens' undeclared bank accounts in the Principality are said to be in full swing.