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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

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.