The Principality of Liechtenstein is a constitutional monarchy with a democratic parliament structure. The Principality has close administrative and economic ties with Switzerland.
Liechtenstein is a member of the UN and the European Economic Area.
If you decide to set up an investment fund in Liechtenstein remotely, YB Case will offer you an individual consultation on this matter.
Advantages of the jurisdiction
If you are planning to register an investment fund in Liechtenstein, so we recommend you to look closer at the main advantages of this jurisdiction:
- A modern, liberal and customer-oriented legal framework;
- Flexible tax legislation;
- Strict bank secrecy and business data protection;
- International recognition, particularly in the European Economic Area;
- Political neutrality;
- A low degree of state intervention in economic processes.
Registering an investment fund in Liechtenstein, as well as in Europe, is based on EU directives regarding UCITS and AIFMꞌs. As for UCITS, only investments in securities and certain financial assets are permitted.
Investment funds in Liechtenstein which are intended to contribute shares to other assets (such as real estate, infrastructure projects, ships, airplanes, renewable energy facilities, private capital, securitization, credit operations) are AIF (Alternative Investment Funds).
The right for the return of a share in the fund is inherent in open-ended investment funds. This feature distinguishes open funds from closed-end funds.
All closed-end funds must be classified as AIF. If you want to set up an investment fund in Liechtenstein remotely, we recommend that you seek advice on what type of the fund will be consistent with your business activities.
Benefits of registering a fund in Liechtenstein:
- Risk-sharing: investments can be made in a portfolio of different companies in different countries and areas of activity with existing small investment funds.
- Flexibility: an investment in a Liechtenstein fund can be sold for every NAV (net investment value). In addition, you can replace it with another currency or type of risk if you decide to open an investment fund in Liechtenstein. Saving deposits are also possible. The amount of them is determined individually.
- Transparency: setting up a fund in Liechtenstein provides for the display of all transactions in semi-annual and annual reports. Cost, performance and portfolio composition are also published.
- Regulation: fund management is one of the most regulated areas of business. All companies are required to act solely in the interests of investors. Compliance with this rule is monitored by certified accountants and checked by a supervisor.
Registering an alternative investment fund in Liechtenstein with the help of experienced specialists, namely YB Case experts is a good idea for your future business.
The legal status of funds may be of the following forms:
- Contractual form (“Investment Fund” administered by the management company);
- Trusteeship (collective trusteeship);
- Corporate bylaws ("Investment Company");
- AIFs can take the form of a business partnership (“Investment Commercial Limited Partnership”).
The initial capital in the amount of 1.25 million EUR in order to set up an investment fund in Liechtenstein, must be achieved within 12 months for AIF and within 6 months for UCITS.
AIF and UCITS in Liechtenstein must have a depository, which may be a local bank or an investment company.
The regulatory authority in Liechtenstein is Financial Market Authority (FMA).
There are no taxes on capital, income, or payments for an AIF/UCITS in Liechtenstein. This is precisely the main reason why the opening of an alternative investment fund in Liechtenstein is a common business establishment tool. Transactions with local or foreign securities are also not taxed.
UCITS features
Permissible assets
UCITS is allowed to invest only in the following types of assets in favor of its investors:
- Termless deposits and deposits with the notification of not more than 12 months;
- Securities in the primary market;
- Derivatives;
- Shares of UCITS and other companies comparable to collective investment;
- Securities and money market instruments.
Impermissible assets
UCITS is not allowed:
- Short sales;
- To acquire precious metals or certificates ensuring such precious metals;
- To invest more than 10% of assets in other securities or MMI except for listed above;
Registering an investment company in Liechtenstein can be an important key to your business management. An important feature of UCITS is that they are present in the public market and therefore potentially target a wide audience. UCITS are designed for marketing aiming at retail investors. If your activity will be related to marketing and you want to build a successful international business, so setting up a fund in Liechtenstein is a good offer!
It is also worth noting that Liechtensteinꞌs legislation has comprehensive legal standards for investor protection.
When forming UCITS at the first stage, the main task is to develop a Memorandum of Proposal with a sponsor, which defines the investment policy and basic conditions.
YB Case offers support at all stages of opening an alternative investment fund in Liechtenstein.
In parallel with this, the necessary documents are provided, in particular, asset management agreements, agreements with a bank and fund management agreements.
Features of AIFꞌs
Permissible assets
AIF can contribute to all types of financial and non-financial instruments (the list is exhaustive):
- Private capital;
- Termless deposits;
- Derivatives;
- Shares of collective investment enterprises;
- Tangible assets such as cars, watches, wine;
- Physical precious metals;
- Securities and money market instruments;
- Foreign currency;
- Credit instruments and guarantees;
- Real estate.
The filling of an application and approval procedure
An application for AIF authorization is submitted to the Financial Market Authority (FMA) and should include the following:
- Business plan with information about the AIF and its location;
- AIF statutory documents;
- Confirmation of the depository and auditors appointment;
- A description of the AIF or available investor information about the AIF.
If you are intended to register an investment fund in Liechtenstein remotely, Our team will provide you with professional support in this issue.
