Liechtenstein: Reformed Law of Private Foundations

On August 26, 2008, Liechtenstein promulgated the Act Reforming the Persons and Companies Act, which introduces a new Act on Foundations. The Reform Act become effective on April 1, 2009. However, many existing foundations will continue to be governed to a considerable extent by the former provisions (Personenund Gesellschaftsrecht (PRG), Jan. 20, 1926, LGBl 1926/4, as last amended by Gesetz, Dec. 13, 2006, LGBl no. 2006/38, arts. 552 -570).

In Liechtenstein, foundations are one of the company forms that are regulated by the Persons and Companies Act. Liechtenstein foundations are unusual in that they exist not only for charitable purposes but also for family purposes, such as administering an estate, supporting family members, or simply managing private assets

The new Act on Foundations that was introduced through the 2008 Reform Act aims at creating a modern law to improve transparency, increase oversight, and forestall abuse. By deleting the formerly existing analogous application of the law of trust and by instead spelling out the relationships between the involved parties, e.g., the information rights of beneficiaries, the Act succeeds in providing more predictability for the parties. The Act also strengthens the oversight over charitable foundations.

Despite these reforms, the Act still protects the privacy of private investors. Now, as before the reform, the Act permits family foundations to avoid the public register by merely depositing with the registrar certain information that is not made public. The required information includes the name and purpose of the foundation and data on its managers and representatives. The name of the founder and the names of the beneficiaries need not be deposited, but they must be contained in the articles of incorporation.

Ask System Day
only required if you wish us to call you back