Originally published on 24 July 1999

More than a dozen corporate forms and half as many unincorporated entities are the subject of the codifications in the Liechtenstein Persons and Companies Law. This wide variety of corporate forms was intended to respond to the needs of the domestic economy on the one hand and to encourage foreign investment as well as to make Liechtenstein attractive for the location of multinationals on the other hand. It is estimated that since, more than 70.000 offshore companies have established their headquarters in Liechtenstein.

The Liechtenstein company law which was enacted in 1926, is very liberal and embodies the spirit of free enterprise. In order to in no way impair economic development, the legislator included every type of known corporate form in the Persons and Companies Law. Combined with the taxation regime, and the prevailing geo-political factors, the new law offered foreign investors three significant advantages:

  • interesting tax-saving possibilities
  • maximum asset protection particularly in view of the political stability of Liechtenstein, one of the few continental countries which has survived the 20th century without any direct military involvement or internal political upheaval
  • absolute investor anonymity

In addition to a wide choice of corporate forms, the entrepreneur has unlimited possibilities in structuring shareholdings, equity participations as well as direct and indirect holdings.

STRUCTURING POSSIBILITIES FOR THE COMPANY LIMITED BY SHARES

Shares in a company limited by shares may be registered or issued to bearer and, depending upon the articles of incorporation, freely traded. Provided that relevant securities legislation is complied with, the company may be publicly listed. The minimal required capital is CHF. 50.000,--. There is no upward limit on authorized or issued capital or the number of shares or shareholders.

With the exception of the company limited by shares, the most commonly resorted to Liechtenstein corporate entities fall outside of the ambit of the European Community directives concerning company law. Nevertheless, certain of these forms such as the trust enterprise or the establishment may engage in the same industrial and commercial or trading activities as the private "business corporation" or the German "Gesellschaft mit beschr„nkter Haftung", which corporate forms are subject to the said directives.

GUARANTEED DISCRETION

A principal feature of all corporate forms commonly resorted to is that it is always possible to maintain entrepreneur/investor anonymity. The identity of the entrepreneur/investor must not be recorded publicly. Nor are government or tax authorities entitled to such information. Thus, optimal asset protection can be guaranteed. Only one member of the board of directors of an offshore company must be a Liechtenstein attorney or licensed trustee who is obliged to maintain absolute confidentiality with respect to the affairs of the corporation. The remaining board members may be nationals of any country thus allowing the corporation to be effectively managed from anywhere in the world.

PRACTICALLY NO TAXES

Those Liechtenstein legal entities which qualify as offshore companies, meaning that they manage offshore assets and/or offshore enterprises or basically conduct business abroad, pay practically no taxes in Liechtenstein and are free from any supervision, except for such companies which trade and therefore are required to file annual financial statements.

Please contact Arcomm Trust Company directly for an update on the subject matter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.