Introduction
Liechtenstein, the tiny principality between Switzerland and Austria, has one of the most sophisticated and flexible private wealth planning frameworks in the world. Its foundation law (dating to 1926), combined with modern trust legislation and a well-regulated financial sector, makes Liechtenstein a jurisdiction of genuine depth rather than simply a low-cost incorporation address.
Unlike many offshore centres, Liechtenstein's professional services industry is dominated by long-established, regulated institutions — banks, trustees, and fund managers — with deep expertise in complex cross-border structuring. The jurisdiction is OECD-whitelisted, a CRS participant, and has a strong record of compliance with international standards while maintaining the legal certainty and confidentiality protections that make it attractive for long-term wealth planning.
This guide focuses on the two primary Liechtenstein wealth planning vehicles: the Stiftung (foundation) and the trust. It explains how they work, their legitimate purposes, and the compliance framework that governs them as of 2026. Regulated legal and tax advice specific to your circumstances is always recommended.
Liechtenstein: Key Facts
- Status: Independent principality (not EU member, but part of the European Economic Area — EEA). Members of the Schengen area.
- Currency: Swiss franc (CHF).
- Language: German.
- Legal system: Civil law, based on Austrian and Swiss models, with its own codified private law (Personen- und Gesellschaftsrecht — PGR).
- Tax: Corporate income tax at 12.5% on Liechtenstein-source net income. Foundations and trusts may be subject to a minimum tax (currently CHF 1,800 per annum as of 2026). No capital gains tax (in most circumstances), no inheritance tax on non-Liechtenstein assets (for foundations/trusts).
- Regulatory: Supervised by the Liechtenstein Financial Market Authority (FMA).
- CRS: Full participant. Financial accounts reported to relevant tax authorities.
- FATCA: Signed intergovernmental agreement with the USA.
- OECD whitelist: Yes. Not on EU blacklist.
The Liechtenstein Stiftung (Foundation)
What Is a Stiftung?
The Liechtenstein Stiftung is a civil-law foundation — a legal entity with no shareholders, members, or partners. Assets are transferred to the foundation by the founder, and the foundation holds and manages them pursuant to its statutes for the benefit of designated beneficiaries or for a specified purpose.
The Stiftung is one of the most widely used vehicles in European private wealth planning, and Liechtenstein's foundation law — contained in the Persons and Companies Act (PGR) — is particularly well-developed.
Key Structural Features
- Founder: establishes the foundation by endowing it with assets and defining its statutes.
- Foundation Council: the governing body, comparable to a board of directors. Manages the foundation's assets and ensures compliance with the statutes. Must have at least one Liechtenstein-based member (though this requirement is often met through a licensed trustee company).
- Beneficiaries: may be named individuals, a class of persons (e.g., descendants of the founder), or a purpose (charitable or private). Beneficiaries do not have ownership rights — they have a right to benefit in accordance with the statutes.
- Protector (optional): a protector can be appointed to supervise the Foundation Council, with powers to appoint/remove council members and veto certain decisions. The protector role allows the founder's family to maintain oversight without being on the Council.
- By-laws (Beistatut): the statutes filed with the public register may be supplemented by private by-laws setting out detailed beneficiary provisions, distribution rules, and investment mandates. By-laws are not publicly filed.
- Legal personality: the Stiftung is a separate legal person — it can own property, hold bank accounts, enter contracts, and sue and be sued in its own name.
- Duration: foundations can be perpetual or established for a fixed term.
Uses of the Liechtenstein Foundation
Family wealth holding and succession: The foundation holds the family's investment portfolio, real estate, and business interests, providing continuity beyond the founder's lifetime without the need for complex probate procedures across multiple jurisdictions. Succession occurs through the foundation structure rather than through individual estates.
Protection from forced heirship: Civil law jurisdictions (France, Spain, Germany, many Middle Eastern and Latin American countries) impose forced heirship rules requiring fixed shares of an estate to pass to certain heirs. A Liechtenstein foundation — if properly established and maintained — can hold assets outside the forced heirship regime, though this is subject to challenge in the relevant jurisdiction and specialist advice is essential.
Asset protection: Foundation assets are legally separate from the founder's personal estate. Subject to clawback provisions and claw-back periods (typically 5 years in Liechtenstein), assets settled into the foundation are generally beyond the reach of the founder's creditors.
Privacy: The foundation's statutes filed with the commercial register include the foundation's name and purpose, but beneficiary details are in the private by-laws. Beneficial ownership information is reported to the FMA and exchanged with relevant tax authorities under CRS — there is no meaningful secrecy from tax authorities in CRS countries.
Philanthropy: Liechtenstein foundations can have charitable purposes, providing a regulated vehicle for family philanthropy with the legal infrastructure to make international grants and hold endowments.
Tax Treatment of the Stiftung
- Income tax: 12.5% on net income derived from Liechtenstein sources. Foreign-source income is generally not subject to Liechtenstein corporate tax.
- Minimum tax: CHF 1,800 per annum (as of 2026).
- Distributions to beneficiaries: Liechtenstein levies no withholding tax on distributions to non-Liechtenstein residents. The tax position in the beneficiary's country of residence depends on that country's rules.
- For UK-resident beneficiaries: Liechtenstein foundations may be treated as trusts or companies depending on their governance structure — specialist UK tax advice is essential.
Liechtenstein Trusts
Liechtenstein introduced trust legislation in 1928 — making it one of the earliest civil law jurisdictions to codify the trust concept. The trust is governed by the PGR, which allows Liechtenstein trusts to be governed either by Liechtenstein law or by a specified foreign trust law (commonly English law).
Key Features
- Trustee: must be a Liechtenstein-based trustee company (licensed by the FMA) unless the trust deed specifies otherwise.
- Settlor: transfers assets to the trustees. Can be an individual or corporate entity.
- Beneficiaries: may be named or described. Discretionary trusts are common.
- Trust protector: optional but commonly used to provide oversight.
- Purpose trusts: Liechtenstein allows non-charitable purpose trusts, providing flexibility for commercial and estate planning structures.
- Reserved powers: the settlor can retain certain powers without invalidating the trust in Liechtenstein law, though the implications in the settlor's country of residence must be assessed separately.
Trust vs Foundation in Liechtenstein
The choice between a Liechtenstein trust and foundation often depends on the settlor's cultural background:
- Common law clients (UK, Australia, Hong Kong, Canada): may prefer a trust structure as it is familiar from their home jurisdiction.
- Civil law clients (continental Europe, Latin America, Gulf, Far East): may prefer a foundation as the concept is more familiar.
In practice, the substantive planning outcomes achievable through each vehicle are similar in most respects.
The Liechtenstein Disclosure Facility (Historical)
The UK and Liechtenstein signed a special disclosure facility (the LDF) which ran from 2009 to 2015 (it closed on 31 December 2015, brought forward from the originally scheduled 5 April 2016), allowing UK taxpayers with undisclosed Liechtenstein connections to regularise their affairs on favourable terms. This facility has now closed. All UK taxpayers with Liechtenstein structures are expected to be fully compliant. CRS data exchange means non-disclosure is not a realistic option.
Economic Substance and Compliance
Liechtenstein has not enacted economic substance requirements in the same form as offshore British dependencies, because it is not a British Overseas Territory. However, Liechtenstein foundations and trusts must demonstrate genuine governance and management within the jurisdiction. A foundation or trust managed purely from abroad without real Liechtenstein involvement would be vulnerable to challenge.
CRS reporting means that Liechtenstein banks and trustees report account information to the FMA, which exchanges it with competent authorities in the relevant country of residence.
Costs
Liechtenstein is a premium-priced jurisdiction. Indicative annual costs:
| Item | Approximate Cost (CHF) |
|---|---|
| Minimum annual tax | 1,800 |
| Professional trustee/council fees | 5,000–20,000+ depending on complexity |
| Annual audit (if required) | 3,000–8,000 |
| Legal/advisory (home country) | Additional |
Total annual costs for a Liechtenstein foundation: typically CHF 10,000–30,000 for straightforward structures, considerably more for complex multi-tier arrangements.
How Global Investments Can Help
Global Investments has experience advising HNW families from across Europe, the Middle East, and Asia on the use of Liechtenstein structures as part of a long-term international wealth plan. Whether you are evaluating a Liechtenstein foundation for succession planning, asset protection, or philanthropic purposes, our advisers can provide strategic guidance and coordinate with Liechtenstein-licensed trustees and legal counsel.
We do not provide Liechtenstein legal services directly but work alongside qualified practitioners to ensure your structure is properly established, compliant with CRS obligations, and integrated with your overall wealth plan.
Contact Global Investments for a confidential discussion. Regulated legal and tax advice specific to your circumstances is essential. Rules change; this guide reflects the position as of 2026.
This guide is for general information only and does not constitute financial advice or a personal recommendation. The value of investments can fall as well as rise and you may get back less than you invest. Tax rules, pension legislation, and investment regulations change — always verify current rules and seek advice from a qualified independent financial adviser before making any financial decisions.