Registration of an discretionary (family) fund in Liechtenstein
The Family Foundation in Liechtenstein is a separate legal entity. It is a very flexible instrument with respect to structuring and estate planning and the transfer of assets, and is created to support and help specific private persons (beneficiaries). For many years the family foundation in Liechtenstein has been used as a tool for estate planning and the intergenerational transfer of assets. Most foundations created today are discretionary type foundations, which combine separate features of a corporation and a trust.
The founder of the fund can be a natural person or a legal entity.
The owner of the property itself determines the purpose of the foundation. The founder can choose the name of the structure, has full discretion regarding the writing of his\her wishes on the fund. All the main objectives are prescribed in the charter. The articles of association also define the basic concepts and rules, the name of the foundation, its objectives, the distribution of the assets, the methods and amount of the payments, the powers of the board, the persons in charge, the manner of making decisions, the procedure for amending the articles of association, etc. Assets held in the name of the fund are not part of the inheritance.
Requirements for the structure of the fund
At least two board members, one of whom must be a licensed Liechtenstein trustee regulated by the Financial Market Authority (FMA).
The fund is administered by a board, which is stated in the articles of association and bears full responsibility for compliance with the articles of association. It may include natural or legal persons. The founder is allowed to be a member of the Council, has the ability to add a proxy. The Board of the Foundation acts in accordance with the Founder's will. The beneficiary is the person, who benefits from the foundation in the present or future time. The Founder does not name beneficiaries when establishing the foundation. The board of directors has a discretionary right to manage and dispose of the assets of the foundation, to order the payment of any of the beneficiaries that the funder specifies in the By-Laws. The founder has the right to limit the activities of the Board of Directors by means of the power of control and the power of Veto of the Protector. The Protector is appointed by the founder and has the right to veto all decisions of the Board of Directors of the foundation.
The minimum authorized capital of the fund is 30,000 CHF/USD/EUR.
The authorized capital is transferred at the time of the foundation establishment to a temporary account of the foundation in one of the local banks or the account of a trust company. Other funds can also be placed in a bank. All these funds, together with the authorized capital and other tangible contributions, make up the assets of the foundation. Assets held in the name of the foundation are not part of the estate and are not subject to inheritance.
Separate assets of the legal entity will be distributed or transferred to the next generation in accordance with the bylaws and/or ordinances that are an integral part of the Founder's will.
The price includes:
- State fees
- Initial KYC verification
- Preparation of KYC Profile
- Preparation of the incorporation documents package
- Opening of bank account for depositing
- Registration of the funf
Maintenance of fund accounting is mandatory only if the fund carries out commercial activities. No auditing is required.
For the registration of the fund personal presence of the founder is not required (can be registered by power of attorney).