A trust is a formal arrangement between two parties for the purpose of asset protection, for charitable, cultural, social or estate planning purposes. It does not have legal personality, like a corporation, and there is no need to prepare a minimum share capital.
In order to set up a trust in Liechtenstein, the trustor offers specific rights to the trustee, to hold and manage property or assets for in his own name or for a third party, a beneficiary. The Trust Law in Liechtenstein follows the model set forth in the English Common Law.
One of our lawyers in Liechtenstein can help you open a trust and give you specific information about the legal framework for these types of establishments.
Some of the key elements of a trust are the following:
- • the trust purpose: it can be set up for asset management purposes, for charity or for special needs.
- • the name: although investors can choose any name in any language, it is recommended by our attorneys in Liechtenstein to perform a preliminary name check to see if a certain name is indeed available.
- • the capital: the founder of the trust is the one to decide the capital, for example, 1,000 CHF.
- • the trustee: the natural or legal person responsible for the trust, the manager of the assets.
- • compliance: the bookkeeping of the trust is handled by the trustee; a custodian may also be appointed.
Liechtenstein has a well-established and strong financial center. The small country is an attractive and beneficial location for the fund and trust industry as well as for the asset management industry. Favorable client and investor protection laws attract entrepreneurs from all around the world.
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What is the regime for trusts in Liechtenstein?
When opening a trust in Liechtenstein, the trustor or settlor transfers movable and/un unmovable property and the legal rights of a trustee who can be an individual or a company. This transfer and the set up of the trust is performed via a Trust Deed (written agreement). The entrusted individual or company, the trustee, has a duty of care towards the settlor and his assets or entrusted property. As a general rule, the assets and/or property transferred through a trust in Liechtenstein are kept separate from other belonging to the trustee. Our team of lawyers in Liechtenstein can provide investors with complete details about the beneficiaries and the trustees. There is no minimum capital requirement for a fund.
There are several differences between foundations in Liechtenstein and trusts that may determine investors and entrepreneurs to choose one over the other. We recommend investors to explore these differences and similarities in order to determine which structure suits their asset management needs. One of our lawyers in Liechtenstein can provide you with information about the differences between trusts and funds.
We invite you to watch a video about opening a trust in Liechtenstein:
How are trusts incorporated in Liechtenstein?
The trust is regulated by the Trust Deed and it is registered with the Commercial Register or with the District Court. The trust is considered incorporated once the parties have signed the Deed. There are no minimum capital or asset/property requirements for the formation of a trust.
The trust instrument or the trust deed can be registered with the Commercial Register or, alternatively, filed with the Court of Justice. One of our lawyers in Liechtenstein can give you more information about these options. In practice, investors or entrepreneurs who open a fund can choose to enter it in the Commercial Register. This does not mean that the trust is registered as a legal entity would be.
The trust registration application will contain the following documents:
- – the specifics of the trust relationship;
- – the date on which the trust relationship was formed;
- – the duration of the trust;
- – the identification details of the trustee as well as details about his registered office.
The Financial Market Authority is the supervisory authority in the country, the one responsible for ensuring the stability of the financial market. It supervises all financial market participants and entities.
A trust in Liechtenstein is subject to the minimum corporate tax, at a flat-rate.
One of our attorneys in Liechtenstein can give you complete information about the formation of trusts, legal compliance, taxation and other issues.
What are the conditions for trustees in Liechtenstein?
A trustee is an individual or the corporation entrusted with the management of the assets in a trust. According to law, the activities of professional trustees are regulated and it is one of the few financial centers where this is applicable. The Financial Market Authority, through the Professional Trustees Act, as well as the Institute of Professional Trustees and Fiduciaries are the bodies responsible for the regulation of these professionals.
Trustees are subject to licensing in Liechtenstein, and this license is issued by the Financial Market authority upon evaluation. The following conditions are applicable to all trustees:
- – trustworthiness;
- – legal capacity;
- – competent studies (law, auditor, banking, etc.);
- – three years of relevant professional practice;
- – a state trustee diploma from having passed the professional trustee examination;
- – being an EEA citizen;
- – having an office in Liechtenstein and insurance for professional liability.
The trustor and the trustees are under a disclosure requirement and under a fiduciary relationship.
One of the experts at our law firm in Liechtenstein can provide investors with more information about the conditions that must be met by professional, licensed trustees.
The trust sector in Liechtenstein is of significant importance to the country as a financial center. The sound regulatory regime, combined with a high percentage of professional trustees, make it attractive for foreign investors to base their trusts here. The financial sector has the following indicators in 2017:
- – the financial sector had a 24% share of gross value creation;
- – 16% was the share of employees in the financial services industry;
- – 49% the share of tax revenue of the financial services sector.
In Europe, Liechtenstein’s financial services contribution to the total economy was surpassed only by that of Luxembourg. As far as asset management was concerned, in 2017 Liechtenstein had approximately 116 asset management companies ad some 33.3 billion CHF in client assets under management. The number of employees in this field was over 620. Investors who are interested in entering the asset management sector or those who wish to open trust companies can reach out to our team of attorneys in Liechtenstein.
Trusts in Liechtenstein can be used both for the long-term presentation of assets as well as for estate planning for families. It allows for flexible arrangements between the trustor and the trustee and does not have the same limitations, compared to the foundation. The trust can be a revocable or irrevocable arrangement, a modifiable or unalterable agreement.
Contact our law firm in Liechtenstein for complete assistance for trust formation. Our lawyers can also help you with complete legal services in a wide range of business fields.