Liechtenstein Establishment

Company formation/incorporation/setting up of an Establishment

This legal form is unique to Liechtenstein and is very versatile (private law company). The flexibility in structuring an Establishment is extensive. It can be structured similar to a corporation or similar to a Foundation and, depending upon the structure of an Establishment, may be used for the carrying on of commercial purposes or for asset management.

The Liechtenstein Establishment should not be confused with the public law Establishments of other jurisdictions.

Name of an Establishment

The name of an Establishment may be in any language (in Latin or German characters). Made-up names may also be used. The company name is protected (exclusivity of the registered company). The use of domestic and international state and place names in the company name is only permitted with special permission.

Language of the Establishment

The official language is German. A translation of the German-language formation deed can be prepared upon request.

Company formation/incorporation/setting up: purpose of an Establishment

The purpose  of an Establishment may be commercial or non-commercial insofar as the said purpose is not illegal. This may be, for example, the trading of goods; the acquisition of investments; financing; the management of real estate;the exploitation of patents; leasing; asset managed for specific beneficiaries or purely charitable purposes. However, banking operations are only permitted to be carried on by banks and asset management for third-parties is only permitted to be undertaken by licensed trustees in Liechtenstein.

Company formation/incorporation/setting up: nominal capital (Establishment funds)

The currency of the nominal capital may be specified in the articles of association as Swiss Francs, Euros or US. Dollars. Attention must be paid to the nominal capital required. The nominal capital required may be in the form of a cash or non-cash contribution.

A minimum of 30,000 CHF, or the equivalent sum in any other legal currency, must be contributed to its nominal capital and this may be divided into shares - with or without the character of a security.

Company formation/incorporation/setting up: formation of an Establishment

An Establishment is formed through the submission of the founding documents and articles of association to the competent authorities. One natural or legal person suffices therefor. As a general rule, formation takes place on a fiduciary basis.

Company Formation/Incorporation/Setting up: Existence

An Establishment officially comes into existence upon its registration in the Public Register (Commercial Register).

Governing authority

The governing rights are usually held by the governing authority, namely the founder, and  are typically transferred by means of an assignment declaration (documentary evidence of ownership).

The property rights may also be transferred to persons other than the owner(s) of the founder's rights.

The management of an Establishment is undertaken by the board of directors.

An auditor, as a third governing body, must be appointed if commercial activities are being carried on or if such activities are permitted by the articles of association. Furthermore, additional governing bodies are possible.

The appointment of an auditor

An auditor must be appointed if an Establishment is carrying on commercial activities or if its articles of association permit such activities to be carried on. Those permitted to be appointed as auditors are as follows: trustees, trustee companies with the authorisation of the trustees, chartered accountants and auditing firms.

Administrative body

At least one member of the administration (board of directors) must have its law office address in Liechtenstein and possess certain professional qualifications. In addition to this Liechtenstein administrative body, any number of natural or juridical persons, resident in Liechtenstein or abroad, may be co-opted. The administrative body is the company’s responsible body.

Legal representative of an Establishment

The legal representative is the official addressee and contact person of an Establishment for the authorities including, for example, the tax authority and the Public Register Office.

Beneficiaries of an Establishment

In an Establishment, the founder or a body specified in the articles of association determines who the beneficiaries are who are to be entitled to its income and/or assets. In addition to the provisions on the beneficial interest in the articles of association and by-laws, the extent of and the conditions attached to the beneficial interest are specified therein. The by-laws, which form an integral part of the articles of association and which frequently take precedence over the articles of association, do not require to be lodged with the Public Register Office. The said by-laws may be revocable or irrevocable and are able to be amended or not able to be amended. In addition to amendments to the by­laws being permitted, it is possible that after a specified event or date (for example, the death of the founder) that the by-laws that were previously able to be amended become irreversible and thus not subject to amendment. In general, the implementing authorities must adhere to the founder's wishes. Where no beneficiaries have been specified, it is to be presumed that the founder himself is the beneficiary. If that is the case, the rules of intestate succession apply. Under certain circumstances specified by law or the articles of association, the beneficial interest may be exempt from attachment by a creditor(s).

Bookkeeping

It is a legal requirement that an Establishment keep books.

This may be done in any legal currency. Moreover, the said books may be recorded in English, French, Italian, Spanish or Portuguese and may be kept in or outwith Liechtenstein. It may be the case that the annual accounts be required to be submitted to Liechtenstein's tax authority; where this is so, the annual accounts must be submitted together with, at least, a German translation thereof.

Declaration

A statement of assets and liabilities must be produced annually by those Establishments which are not undertaking commercial activities and whose articles of association do not permit the carrying on of commercial activities, namely by those Establishments formed solely for the investment and management of assets or the holding of assets or other rights. Based on this, the Liechtenstein administrative body shall inform Liechtenstein's Public Register Office that a statement of assets and liabilities is available and that no commercial activities have been undertaken in the past year. The statement of assets and liabilities does not require to be submitted.

Company formation/incorporation/setting up: time required for formation

Formation normally takes place within one week.

Powers of attorney

Powers of attorney can be granted if, upon the instruction of the administrative body, transactions are to be handled by third parties. The holder of a power of attorney must report to the administrative body. As a general rule, only time-limited special powers of attorney will be granted due to the liability of the administrative body.

Liquidation of an Establishment

At the earliest, those Establishments registered in the Public Register may be dissolved six months after the issuing of the third notice to the creditors. Dissolution may only take place following the completion of the liquidation process.

Fees and taxes

For details see Taxes

Submission of a balance sheet

The audited annual accounts must be submitted to Liechtenstein's tax authority if commercial activities have been undertaken or if the articles of association permit such activities to be undertaken.