Liechtenstein: Country and Foreign Investment
Liechtenstein is the only civil law jurisdiction which has adopted largely anglo-saxon trust legislation (contained in the PGR Code), although, unlike the common law trust, there is no bar against accumulation of income, nor against perpetuities.
A Liechtenstein Trust is set up by a written agreement (Trust Deed) between the trustor (settlor) and trustee(s) which does not have to contain the names of beneficiaries. If the Trust Deed is deposited with the Registrar of Trusts, it will not be publicly available, and later instruments (eg naming beneficiaries) will not have to be revealed; if the Trust Deed is not deposited within 12 months, details of the Trust must be placed on the public register. A registration fee of CHF700 (at the time of writing) is payable on registration.
Some of the characteristics of Liechtenstein Trusts are as follows:
- a trustee (apart from the Liechtenstein professional mentioned above) can be an individual or a corporation or association;
- trustees are liable for breach of trust to the full extent of their assets; joint trustees are jointly liable; supervision of the trust is ultimately under the Court, even if the Trust Deed specifies alternative supervision;
- the interests of named beneficiaries can be embodied in trust certificates, which if registered are transferable securities;
- being a civil law jurisdiction, trust assets are vulnerable to forced heirship provisions, although there are time limitations on such claims;
- in general, there is a limitation of one year on creditors' claims;
- trust documents, including the Trust Deed, can be in any language.
Trusts may be set up under foreign law, but may not have more favourable treatment than would apply under Liechtenstein law. A trust under foreign law is a Liechtenstein Trust and subject to local taxation. Liechtenstein law applies to a foreign trust if the trustee, or more than half of the trustees, are resident in Liechtenstein, if the trust property is in Liechtenstein, or if the Trust Deed says so.