[ESTABLISHING A BUSINESS ENTITY IN LIECHTENSTEIN]
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Foreign Investment Investment fund centre
Unbureaucratic of investment funds: Firstly, a fast and unbureaucratic approvals process establishment
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Modern and liberal investment fund legislation is one of the pillars of Liechtenstein’s financial centre. A key expression of this is the Liechtenstein Investment Undertakings Act and the associated Ordinances. Moreover, the Liechtenstein Collective Investment in Transferable Securities Act came into force on 1 August 2011. This had the effect of implementing the EU’s UCITS IV Directive in Liechtenstein. The Act further strengthened access to the single European market for harmonised, standardised investment funds, known as UCITS (Undertaking for Collective Investment in Transferable Securities). Benefits of Liechtenstein as an investment fund centre - State-of-the-art investment fund centre: The Liechtenstein Investment Undertakings Act (“IUG”) came into force in the year 1996 and was extensively revised in the year 2005. This has given Liechtenstein a very modern, liberal, and client-focused legal foundation for investment funds. The Liechtenstein Undertakings for Collective Investment in Transferable Securities Act (“UCITSG”), which came into force in August 2011, strengthens access to the EU market for harmonised, standardised investment funds.
involving the Liechtenstein Financial Market Authority (“FMA”) is anchored in law. This also stipulates a maximum period for standard products. In addition, investment funds for qualified investors can also be set up quickly using a simplified approvals process. - Emphasis on investor protection: The provisions of Liechtenstein investment fund legislation place a particular emphasis on investor protection. The business activities of investment fund management teams are monitored on an ongoing basis by the state supervisory authority and statutory auditors, who require approval from the Financial Regulator.
Individual Liechtenstein investment fund legislation makes provision for highly customised solutions, including for individual investors, in particular under the heading of so-called “private label funds”. solutions:
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Taxation There is no withholding tax upon the payment of dividends or distributions by a Liechtenstein entity. Generally, corporation tax is charged at 12.5% of calculated net profit, subject to a minimum annual charge of CHF 1,800.00. Subject to fulfilment of the necessary conditions, entities not engaging in economic activities can apply to the tax authorities for recognition as a Private Wealth Structure (PWS). A PWS is subject to a flat annual tax of CHF 1,800.00 and is exempt from ordinary corporate income taxation. VAT is charged at a rate of 7.7%. There are no thin capitalization rules in Liechtenstein.
International of Liechtenstein investment funds: Through its membership of the European Economic Area (EEA) and the compatibility implementation of all relevant EU Directives, Liechtenstein has created thoroughly unbureaucratic and discrimination-free access to the European market.
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ILN Corporate Group – Establishing a Business Entity Series
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