Advantages of a foundation in Liechtenstein
The reform of tax and foundation law has brought a considerable leap in quality for Liechtenstein foundations. By harmonising with international standards, the Liechtenstein foundation opens up interesting, legally secure opportunities and advantages
- Founders‘ and beneficiaries‘ rights of influence: Liechtenstein foundation law grants founders and beneficiaries extensive rights of influence if required.
- Combination of family foundation and charitable status: The family foundation can use up to 49% of its surplus for charitable purposes.
- No need for state authorisation when setting up a foundation or amending the articles of association: Quick (formation time 1 week) and simple formation without a notary or state involvement
- Low minimum capital: The minimum capital on establishment of the foundation is 30,000 euros / dollars or Swiss francs. Subsequent investments or subsequent donations have no influence on the capital.
- Tax advantage low tax rate: The corporate income tax rate is 12.5%. Liechtenstein tax law does not recognise trade tax.
- No substitute inheritance tax in Liechtenstein
- Comprehensive tax exemptions: Only income generated by the foundation in Liechtenstein is taxed in Liechtenstein. Income from real estate and companies in other countries is tax-free in Liechtenstein. All dividends and profits from the sale of shares remain untaxed in Liechtenstein. Interest income is taxed at 12.5 % after deduction of the so-called equity interest.
- Liechtenstein foundation law offers a high degree of flexibility and legal certainty.
- Strong control rights: The well-developed system of internal control rights can replace (often internationally tax-damaging) external control.
Caution: Excessive rights of external influence and control (founder/beneficiaries) can be detrimental to international tax law (tax penetration of the founder).
- Effective asset protection: Strict separation of the foundation’s assets from the founder means that the foundation’s assets are effectively protected against external attacks.
Note: The disadvantage of the Liechtenstein foundation is that it can generate profits but cannot itself engage in commercial activities. There is an incomplete network of double taxation agreements.
Do you have any questions? We will be happy to help you. For a non-binding enquiry, please contact us by phone or e-mail or use the contact form at the bottom of this page, and our advisors will provide an initial assessment of your request free of charge.