Liechtenstein is one of the few countries admitting a private foundation. In Liechtenstein any foundation can be established and may pursue its objects with virtually no official control.
The Liechtenstein foundation differs from foundations in other countries mainly in that it may pursue any lawful purpose. Therefore, especially the maintenance foundation is admissible. In practice it is mainly the family foundation that is of importance. It serves the protection, administration and maintenance of family assets to ensure the support of family members.
For general information and more specifically, we would like to refer to the following information links, “Forms of Companies in the Principality of Liechtenstein”; in connection with the foundation we also recommend the following link “Estate Succession Arrangements upon Decease”.
The Liechtenstein foundation has its legal basis in the Persons and Company Law (PGR – Personen- und Gesellschaftsrecht) of January 20, 1926. This law grants the founder ample freedom relating to the arrangement of the foundation. Many legal rules are optional, they come into effect only if the statutes do not stipulate otherwise.
The definition of a foundation reads: “The creation of a foundation requires the allocation of funds (foundation property) for a specifically designated object. These include in particular ecclesiastical, family and socially beneficial (charitable) objects.” (PGR, Art. 552).
One or more natural or juridical persons may constitute a private foundation either personally or through third parties in accordance with the given procedures. For this purpose, an endowment shall be established, to be used exclusively towards the objectives or purposes expressly provided for in the foundation charter. This endowment then constitutes an independent estate, thus creating a new legal entity.
When the capital is paid into the foundation it is transferred by the founder by way of donation, without the founder receiving any legal or economic registerable equivalent. This essential difference between a capital company and the foundation is of primary importance, especially when considering the property placed in a foundation with regard to taxation and succession laws.