A3 Advantages of Liechtenstein as a foundation location
The reform of tax and foundation law has brought a considerable leap in quality for Liechtenstein foundations. Especially with the alignment to international standards, the Liechtenstein foundation opens up interesting, legally secure possibilities and advantages:
- Influence rights of founders and beneficiaries: The Liechtenstein legal regime grants founders and beneficiaries extensive influence rights, if required.
- Combination between private-benefit foundation (family foundation) and non-profit: The private-benefit foundation can use up to 49% of its generated surplus for non-profit purposes.
- No state approval required for the establishment of a foundation or for amendments to the articles of association: Quick (formation time 1 week) and simple formation without notary or state involvement
- Low minimum capital: The minimum capital upon establishment of the foundation is 30,000 euros / dollars or Swiss francs. Later endowments or subsequent donations have no influence on the capital.
- Tax advantage low tax rate: The tax rate for corporate income tax is only 12.5%. There is no trade tax under Liechtenstein tax law.
- No inheritance tax in Liechtenstein
- Comprehensive tax exemptions: Only income earned by the foundation in Liechtenstein is taxed in Liechtenstein. Income from real estate and companies in other countries is tax-free in Liechtenstein. All dividends and gains from the sale of shares remain untaxed in Liechtenstein. Interest income is taxed at 12.5 % after deduction of the so-called equity capital interest.
- Liechtenstein foundation law offers a very high degree of flexibility and legal certainty.
- Strong control rights: The very pronounced system of internal control rights can replace (often internationally tax-damaging) external control.
- Effective asset protection Asset protection: By strictly separating the foundation assets from the founder, the foundation assets are effectively protected against external attacks.
- Disadvantages of the Liechtenstein foundation: It cannot engage in commercial activities itself and has an incomplete network of double taxation agreements.