The fund as a concept is a hybrid legal entity that combines the features of two forms – a trust and company with liability limited by guarantee. The fund in Liechtenstein is a legal form most commonly used by foreign investors and known as the «Stiftung». The fund is not created for commercial activity, the assets are usually stored there. This may be the property of other companies, stocks, investments. The funds are most often inherited in secrecy. If the fund has a social character it is controlled by the country in a certain way.
Purposes of the fund
The convenience of funds lies in the fact that they are in fact a classic family managed assets. There are family funds to hold assets or to pay for education of family members. Charitable, religious and other funds may be established in accordance with the public interest.
Types of funds
In Liechtenstein two main types of funds are known:
- Registered, the constitutive documents of which are stored in the State Register and are available to public scrutiny;
- Deposit, the constitutive documents of which are also stored in the State Register but are not available to public scrutiny.
Certainly the second form became a frequent practice, because it is done under the special secrecy label.
Mixed or family foundations are not registered in the State Register of Liechtenstein funds. However, their charters are usually deposited in the Court of the Principality of Liechtenstein.
If the activity of the company is subject to the fund, it should be compulsorily registered in the State Register, otherwise its legal rights are negligible.
The name of the fund must be approved by the State Register. The forenames, names of countries, international brands well-known throughout the world should not appear in the name. In addition the definitions that would imply the insurance or banking activity, unless there is a corresponding licenses can not be reflected in the name.
The Capital with which the fund may exist should be at least 30 thousand Swiss francs (it is about 35 thousand U.S. dollars). This nominal capital shall be transferred to the account of any Liechtenstein bank, which will issue a document confirming payment required for registration in the State Register.
If the assets of the fund exceed 2 million Swiss francs, the annual tax will be 0,075% of the total amount. If the assets exceed the sum of 10 million francs, the tax drops to 0,05%. Investment funds pay an annual tax of 0,04% of the amount.
The founding document of the fund shall contain the name of the representative who will manage it. The auditing company may be assigned to monitor the legal activities of the fund. However is not a regulatory requirement by the law, but rather is considered a prerogative of the fund owners.
The time required to register a company
Registration of any fund in Liechtenstein will take not more than three working days.