A1 Liechtenstein Foundation Legal definition

Liechtenstein law defines the foundation as a legally and economically independent special-purpose fund which is established as a legal entity by the unilateral declaration of intent of the founder. The founder dedicates the specifically designated foundation assets and determines the directly outwardly directed, specifically designated purpose of the foundation as well as the beneficiaries.

Under the new law, there is a division into a private-benefit foundation and a charitable foundation. Private-benefit foundations include family foundations, maintenance foundations and corporate foundations.

The private-benefit foundation can be structured as a transparent controlled foundation or as a non-transparent discretionary foundation.

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In the case of the transparent control foundation, the founder retains extensive rights of intervention and design rights, and the foundation council is usually bound to the founder’s instructions by a mandate agreement.

In the case of the discretionary foundation, the founder has neither control via a mandate agreement nor any other means of access or influence. The foundation board acts at its own discretion and is only bound by the provisions of the foundation documents. There is a legal, economic and actual separation of the foundation’s assets from the founder’s assets.

The following remarks are essentially limited to the private-benefit discretionary foundation.

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