Liechtenstein: Country and Foreign Investment
Liechtenstein corporate bodies are formed under the Law on Persons and Companies 1926, known as the PGR Code. Trust Enterprises are formed under the Law Concerning the Trust Enterprise 1928. A wide variety of types of entity can be formed under the PGR Code, the most commonly used of which are described below; other possible forms include the limited partnership with a share capital, the company limited by quota shares, the association, the cooperative association and the company without juridical personality; but they are not commonly met with in offshore situations.
All corporate forms that are allowed under the Code, and the Trust Enterprise, can additionally be either 'holding' companies (companies that hold investments) or 'domiciliary' companies (not having trading activities inside Liechtenstein). Prior to the introduction of the new Tax Act in 2011, holding, domiciliary and non-resident entities were sometimes known as 'exempt', ie exempt from certain types of taxation. See see Offshore Legal and Tax Regimes for further details.
No permits or licenses are required to do business, except for financial sector companies and professional services (see Offshore Business Sectors). It is a notable feature of the Liechtenstein PGR Code that there is very great freedom, within the basic forms it describes, to constitute corporate and share structures in a flexible way according to the particular purpose of the entity and its originators' wishes. Therefore only rather general statements can be made about the rules governing the operation of the various forms; the rest will depend on circumstances.
Corporate bodies formed under the PGR Code (not Trusts) share a number of characteristics:
- there must be written Articles of Association; they are deposited with the Registrar and are available on the public file, including details of capitalisation, share structure, registered office, etc;
- the corporate body does not come into existence until its details have been entered into the public register;
- the names of the directors, officers and shareholders are kept at the registered office;
- the corporate name can be in any language and must include the name of the type of body concerned (Limited, Foundation, etc), but some words are not permitted, mostly those with national or international territorial meanings (exemptions may be available).
In May 2010, the Liechtenstein government adopted tax reform proposals that ushered in a 12.5% flat rate of corporate tax. See Domestic Corporate Taxation for more information.