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Offshore Trusts Report: Liechtenstein

Regulation, Supervision and Transparency

In November, 2004, Liechtenstein's Financial Services Authority announced that following Parliament's approval in June of the new Law (Organization Act) on Supervision of the Liechtenstein Financial Market, the new, independent, and integrated Financial Market Authority created by the Act would commence operations on 1 January 2005.

The new single authority assumed the functions and responsibilities of the three existing regulatory bodies, namely the Financial Services Authority, the Due Diligence Unit, and the Insurance Division of the Office of Economic Affairs. The FMA also took over the existing staff of the three authorities.

Under the auspices of the legislation, the Financial Market Authority assumed responsibility for safeguarding the stability of the Liechtenstein financial market, the protection of customers, the prevention of abuses, and the implementation of and compliance with recognized international standards.

The core responsibilities of the FMA encompass the supervision and regulation (on behalf of the Government) of the Liechtenstein financial market, although the FMA is independent of the Government and of the financial market participants under its supervision.

The Law on Asset Management (Asset Management Act, AMA) entered into force on 1 January 2006. This Act lays the foundation for asset management companies as new, internationally recognized financial intermediaries. The FMA supervises implementation of the Asset Management Act and the related ordinances as well as compliance with regulations.

In response to its inclusion on the FATF money laundering blacklist in 2000, Liechtenstein enacted new money laundering legislation, including a new regulation in relation to the the law on the duty of care, which came into force on January 1 2001. The government has also abolished the existing privilege of trustees and lawyers by which they do not have to disclose the identity of their clients to banks where funds are invested.

On March 12, 2009, Liechtenstein recognized the OECD standard on tax cooperation as binding. The government's goal was to conclude and sign at least 12 Tax Information Exchange agreements (TIEAs) by the autumn of 2009 and to advance negotiations on additional double taxation agreements. OECD-compliant TIEAs and double taxation agreements have been signed with the United States, France, Germany, the United Kingdom, Ireland, and Luxembourg. By the end of 2010, 23 OECD-compliant tax agreements had been signed by Liechtenstein. Liechtenstein has also agreed to implementation of the OECD standard as part of the multilateral European Union Anti-Fraud Agreement and thus with all 27 member states of the EU.

Liechtenstein has also signed a special agreement with the UK that will give UK taxpayers with undisclosed accounts in the Alpine jurisdiction the opportunity to disclose income at a reduced penalty, or face having their accounts shut down.

The so-called Liechtenstein Disclosure Facility (LDF) agreement was signed at the same time as the TIEA between the two countries. Launched on September 1, 2009, it will run until March 31, 2015. Under the agreement, Liechtenstein financial intermediaries will have to review all clients, identifying those who need to confirm their tax position with the UK tax authority, HM Revenue and Customs (HMRC) and advising them to do so within a specific time frame.

Where a UK investor confirms to the intermediary that they are cooperating with HMRC, the financial intermediary can continue to provide financial services to that person. Where a UK investor cannot confirm that they are cooperating with HMRC, the financial intermediary must withdraw financial services in Liechtenstein or apply various “sanctions.” The Liechtenstein government stated at the time of the agreement that a new law would be introduced oversee this process.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


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.