Talking about private foundations, one
of the leaders in this industry is the private foundations of Liechtenstein.
Liechtenstein is known as a “small Switzerland”, its stable legal and political
system, as well as a high level of confidence in this jurisdiction often make
it an excellent choice for creating a private foundation. The two main
advantages of private foundations in Liechtenstein are their high
confidentiality and the ability to open accounts in reliable and reputable
banks in Europe.

THE USE
OF PRIVATE FOUNDATIONS IN LIECHTENSTEIN

Unlike classical investment foundations that are meant
to attract and manage third-party investments, Liechtenstein’s private
investment foundations perform somewhat different tasks — preserving asset
ownership confidentiality, protecting them, reducing the tax burden, resolving
inheritance issues, the role of a holding company or “family office “. In
general, it is a good substitute for classic trusts, often used for similar
purposes, but with a number of additional benefits. For example, a private
foundation in Liechtenstein can be the direct owner of all assets, and also
gives more management tools than trusts.

CONFIDENTIALITY
WITH A PRIVATE FOUNDATION IN LIECHTENSTEIN

Preserving confidentiality, when doing business or
owning assets, becomes an extremely difficult task in the modern world. One of
the most effective tools to cope with it is the private foundation in
Liechtenstein.

Being a sort of hybrid of classic trusts and ordinary
companies, if properly structured, a private foundation in Liechtenstein is
able to ensure the highest confidentiality. In particular, the names of the
final beneficiaries of the private foundation are not indicated in the
commercial register of Liechtenstein, and for the purposes of the banking
exchange of tax information, the beneficiaries indicate the managers of the
foundation and its protector, if needed.

MINIMAL
AUTHORIZED CAPITAL OF PRIVATE FOUNDATIONS IN LIECHTENSTEIN

The minimal foundation capital must be specified not
less than 30 000 CHF/EUR/USD (Swiss francs). At the same time, it is allowed to
directly deposit the foundation’s capital in equivalent in other currencies.
The authorized capital of a private foundation in Liechtenstein must be
contributed.

ASSETS
OF PRIVATE FOUNDATIONS IN LIECHTENSTEIN

One of the key questions in creating a private
foundation in Liechtenstein is what can be transferred to such a foundation?
The answer is very simple: there are no restrictions on the type of assets that
the foundation can own. Among other things, a private foundation in
Liechtenstein may own the following types of assets:

• Money. On
the bank accounts of the foundation you can keep any currency.

• Cryptocurrency. Liechtenstein
legislation does not restrict the right to own cryptocurrencies.

• Shares in companies. A private foundation in Liechtenstein is often used as a holding
company and can directly own shares and interests in other companies.

• Securities. The
foundation may own any type of securities, including stocks, bonds, etc.

• Real estate. A
private foundation in Liechtenstein can directly own real estate in any country
in the world where it is allowed by law.

• Any tangible assets (property). Transport, artwork, precious metals, antiques, etc. – no
restrictions here.

• Intellectual property rights. Not only material values, but also intangible ones, such as
patents or trademarks, can be transferred to the foundation.

Important: Unlike trusts, private foundations in
Liechtenstein open bank accounts and own assets in their own name, which is a
more practical solution.

TAXATION
OF PRIVATE FOUNDATIONS IN LIECHTENSTEIN

Liechtenstein has gained a reputation of a reliable
jurisdiction for tax planning. This country is ready to offer attractive tax
rates, while maintaining an extremely high reputation and avoiding falling into
the “black” offshore lists.

Taxation of private foundations in Liechtenstein has
the following features:

1. Profit tax. As
a general rule, the foundations in Liechtenstein pay income tax as well as
other Liechtenstein companies. The tax rate is 12.5%, but no less than CHF
1,800 (Swiss francs) per year.
It is allowed to reduce the taxable base (net profit from which the tax
percentage is calculated) by a conditional deduction of 4% of the foundation’s
equity capital, which makes the effective tax rate even less than 12.5%.

2. Special tax status for
private asset ownership structures (Privatvermögensstrukturen – “PVS”). Under
certain conditions, a private foundation in Liechtenstein can receive a special
PVS status at the tax agency, which exempts it from paying income tax — only
the minimal tax of CHF 1,800 (Swiss francs) per year remains.

3. Exemption from tax on profits in the form of
dividends and capital gains.

4. No tax on repatriation/distribution of profits. When paying profits to the beneficiaries of a private foundation
in Liechtenstein, the tax on such payments (withholding tax) is not withheld.

5. Tax on the share capital when creating a foundation
(Gründungsabgabe). In the process of establishing a
private foundation in Liechtenstein, its share capital is taxed at 0.2%, but no
less than CHF 200

Important: Registering a private foundation in
Liechtenstein will help to reduce the tax burden only under the supervision of
qualified tax advisors.

WHAT IS
NEEDED TO REGISTER A PRIVATE FOUNDATION IN LIECHTENSTEIN?

To register a private foundation in Liechtenstein, you
need to choose the name of the foundation, collect the necessary documents,
have authorized capital and clearly understand the purposes for which the
private foundation will be created in Liechtenstein.

The SBSB team will be happy to assist you in creating
a private foundation in Liechtenstein, as well as advise you on all related
legal and tax matters during its registration.

It is not a problem for the SBSB team to choose the
best option of the country, the type and structure of the private foundation,
taking into account your goals and wishes. For over five years we have been
advising our clients in corporate law, international tax planning, asset
protection, international licensing, and we provide comprehensive business
support in more than 40 countries.

We will be happy to help you!