The Liechtenstein Foundation – an Instrument for International Asset Management, Asset Protection and Wealth Succession Planning

Legal, tax and international aspects

A strategy paper by LCG TREUHAND AG Liechtenstein on Liechtenstein as a foundation location
for founders, beneficiaries and advisors

Table of contents

• A Legal basis of the Liechtenstein private-benefit foundation
• A1 Liechtenstein Foundation Legal definition
• A2 International recognition
• A3 Advantages of Liechtenstein as a foundation location
• A4 Establishment of the private-benefit Liechtenstein Foundation
• Establishment of a foundation
• Fiduciary establishment of foundations
• Founding announcement
• Formation of legal personality | Commercial register
• Statute Foundation deed
• By-law
• Regulations | Internal directives
• Formation costs
• A5 Foundation revocation I Foundation amendment I Mandate agreement
• A6 Foundation administration of the private-benefit Liechtenstein Foundation
• Founder’s rights
• Board of Trustees
• Representative
• A7 Administrative control of the Liechtenstein private-benefit foundation
• Auditors
• Control body | Supervisory Board
• Protector | Advisory Board | Collator | Trustee
• A8 Liability and responsibility of the foundation bodies
• Accounting rules
• A9 Beneficiaries of the Liechtenstein Private Benefit Foundation
• A 10 Foundation dissolution | liquidation | deletion | transfer of registered office abroad
• B Tax Law Fundamentals of the Liechtenstein Private Benefit Foundation
• B1 Taxes and duties on the establishment of the foundation
• Formation levy and fees
• Dedication tax
• B2 Current income taxation Standard taxation and tax exemption at foundation level
• Income tax Regular taxation
• Exemptions from income tax
• B3 PVS private asset structure
• Requirements for the classification of the private-benefit foundation as a private asset structure PVS
• Prohibition of economic activity
• Taxation of PVS
• B4 Other tax provisions Taxation of the dissolution of the foundation
• Taxation of the beneficiary contribution (distribution)
• Tax measures against profit shifting
• Group taxation
• Substitute inheritance tax
• Capital tax
• Estate tax
• Inheritance tax
• Gift tax
• Withdrawal tax
• Taxation of the dissolution of the Liechtenstein foundation

• C Asset Protection by the Liechtenstein foundation
• C1 Asset protection Basic variants by means of FL foundation
• C2 Liability of the Liechtenstein foundation vis-à-vis corporate and private creditors
• C3 Liability of the Liechtenstein Foundation vis-à-vis beneficiaries of compulsory portions
• C4 Liability of the Liechtenstein foundation towards spouses
• D International asset planning by means of FL foundation with founder/beneficiary and assets in Germany
• D1 Economic burden on a founder resident in Germany in the event of a transfer of assets to a private-benefit foundation in Liechtenstein
• German income tax
• German inheritance and gift tax
• Tax exemption regulations for business assets benefiting from tax relief
• Withdrawal taxation (external taxation of hidden reserves)
• Interest payments on donor loans
• Income tax addition of foundation income for the founder in Germany
• D2 Taxation of donations from the private-benefit Liechtenstein foundation to beneficiaries resident in Germany (beneficiaries)
• German income tax
• German gift tax
• Disbursement of assets in the event of dissolution of the foundation
• D3 Economic burden of a Liechtenstein foundation with assets in Germany
• Double taxation agreement Germany – Liechtenstein
• Dividends and interest
• Capital gains of material participations in a German corporation
• Profits from co-entrepreneurial share in German partnership / permanent establishment Capital gains
• Taxation of real estate located in Germany

• E Fiduciary Liechtenstein Service: Checklist of international design variants