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