Establishment of a Foundation respectively Filing of a Notice of Formation in Liechtenstein

Josef Bergt
2023

In the process of setting up a Liechtenstein foundation and filing the notice of formation for registration in the commercial register, the following points must be methodically prepared:

• Establishment of the name;
• Provision of the foundation's capital (endowment);
• Preparation of the draft statutes and the foundation declaration, possibly the draft bylaws or regulations and letter of wishes;
• Determination of the foundation board members of the foundation, if necessary the auditor and authorized representatives, as well as defining signing rights;
• Preparation of the notice of formation;
• Drafting of the registration letter;
• Obtaining any necessary approvals and notifying the foundation supervisory authority (STIFA) of the supervision obligation, if applicable;
• Preparation of supporting documents to be submitted.

Foundation Name

Foundations can generally choose their names freely, albeit with certain restrictions:

• The chosen name must not already be registered in the commercial register;
• The name or an addition to the name must contain the word "Foundation" or “Stiftung” in German. Foreign language additions such as "Foundation", "Fondation", or "Fondazione" are also accepted.

Provision of the Foundation's Capital

The foundation's capital (endowment) is provided by dedicating the foundation's assets in cash or in-kind (minimum contribution of CHF/EUR/USD 30’000).

Foundation Charter (Statutes) and Supplemental Foundation Charter

The foundation charter (statutes) must contain the following information or regulations:

• The founder's intention to establish the foundation;
• The name and seat of the foundation;
• The dedication of specific assets that must at least meet the legal minimum capital requirement;
• Purpose of the foundation, including the designation of specific or objectively identifiable beneficiaries or the group of beneficiaries, unless it is a non-profit foundation, or the beneficiaries are otherwise derived from the purpose of the foundation or if a supplemental foundation charter which regulates this is explicitly referred to;
• Date of the foundation's establishment;
• Duration of the foundation, if it is limited;
• Regulations on the appointment, dismissal, term of office, and type of management (resolution) and representation authorization (signing right) of the foundation council;
• A provision on the use of assets in the event of the foundation's dissolution, taking into account the purpose of the foundation;
• The name, first name, and residence or firm and location of the founder or in the case of indirect representation, the name, first name, and residence or firm and location of the representative. It must be explicitly pointed out when acting as an indirect representative.

Certain other content is only valid if it is included in the foundation charter. These include, for example, indications of the issuance of a supplemental foundation charter or regulations or the establishment of other bodies or the reservation of revocation of the foundation or amendment of the foundation charter and subordination to supervision, even in case it is a private-benefit foundation.

Organization

The members of the foundation council must be appointed.

A member of the foundation council authorized for management and representation must meet the requirements according to Art. 180a PGR (Liechtenstein Persons and Companies Act), unless the foundation is under the supervision of another authority. This does not apply to foundations subject to the supervision of the Foundation Supervisory Authority (STIFA).

An auditor must be appointed by the Princely Court of Justice for non-profit foundations and for foundations that voluntarily submit to the supervision of the Foundation Supervisory Authority.

A representative must be appointed, unless a domestic delivery address is designated.

Other authorized representatives or bodies (e.g., protectors) can be provided.

Application for Entry in the Commercial Register or Filing of a Notice of Formation

Application for Entry in the Commercial Register for Foundations to be Registered

The application letter (request) for the entry of a foundation in the commercial register must be submitted to the Office of Justice – Commercial Register Department by the foundation council or the representative and must contain the following information:

• The name or firm, legal form, and seat;
• The representation (with address) or the delivery address;
• The purpose;
• The date of establishment;
• The duration of the foundation if it is limited;
• The organization and representation;
• The members of the foundation council or other persons authorized to represent with the name, first name, date of birth, nationality, address, and type of signatory power; if they are legal entities, the firm, the location, and the type of signatory power;
• The auditor with address, unless it is appointed by the court after the establishment;
• The fact that the foundation is under the supervision of the Foundation Supervisory Authority.

The signatures on the application letter must be authenticated.

Filing of the Notice of Formation for Foundations

Concurrently, foundations that are not subject to a registration obligation must, within 30 days of establishment, deposit a foundation announcement with the Office of Justice. Each member of the foundation council is obligated to do so. This power also extends to the representative. A lawyer, trustee, or holder of a qualification according to Art. 180a PGR licensed in Liechtenstein must confirm the correctness of the information in the foundation announcement. Next to the abovementioned information required for foundations to be registered the following documents are required for foundations not subject to registration:

• Confirmation that the designation of the concrete beneficiaries or of the group of beneficiaries that can be individualized according to objective characteristics has been made by the founder, unless this is evident from the indicated purpose of the foundation;
• confirmation that the foundation is not wholly or predominantly intended to serve charitable purposes; and
• a statement as to whether the foundation is subject to supervision pursuant to a provision of the foundation deed; and
• confirmation that the statutory minimum capital is at the free disposal of the foundation;

In the event of any change in a fact contained in the notification of formation, as well as in the event of a dissolution pursuant to Art. 552 § 39 para. 1 PGR, a notice of amendment must be filed within 30 days with the Commercial Register.

Supporting documents to be submitted

For foundations to be registered

The following documents or evidence must be submitted together with the application for entry in the Commercial Register:

• The original or a certified copy of the foundation deed (articles of association), the testamentary disposition or the inheritance contract;
• the confirmation of the foundation board that the legal minimum capital is at the free disposal of the foundation;
• the declaration of the elected members of the foundation board and, if applicable, of the representative office, that the election is accepted, if this is not evident from the registration (if the foundation is a legal entity and its registered office is not in Liechtenstein, a corresponding official extract from the Commercial Register must be provided);
• the so-called company signature declaration (sample signature) of the persons authorized to represent the company, whereby their (sample) signatures must be certified;
• any permits, for example from the Financial Market Authority Liechtenstein (FMA). 

In the case of foundations that are not subject to a registration obligation:

The notification of formation or amendment must be submitted to the Office of Justice – Commercial Register Department together with the application for receipt of the notification of formation or amendment. Further supporting documents are not required.

Miscellaneous: Additional Permits and Verification of Documents

If the foundation operates in a regulated field, a license or another special legal permit (for example, from the Liechtenstein Financial Market Authority (FMA) or another authority) may be required.

The fee for the new registration of a foundation amounts to CHF 700.00. The fee for the Deposit of the deed of establishment (notification of formation) of a foundation amounts to CHF 300.00. In addition, fees in the amount of CHF 30.00 are charged for each signatory, CHF 20.00 for the registration of a function and CHF 30.00 for registration of a representative office or delivery address. 

Source: Factsheet AJU/ h80.008.02; Art. 1031 PGR; Art. 552 et seqq PGR; Art. 31 HRV (Liechtenstein Commercial Register Ordinance); Art. 239 PGR; Art. 89 HRV. 

Executive Summary:

• Establishing a foundation in Liechtenstein involves key steps, from the formulation of the foundation's name to the accumulation of capital, the drafting of bylaws and rules, and the designation of board members and individuals with signing authority.
• The legal name of a foundation in Liechtenstein must contain the word "foundation" or its equivalent in different languages and be unique within the commercial register.
• The foundation's capital can be in the form of cash or assets and must meet the legal minimum requirements.
• The foundation charter (statutes) and the additional foundation charter (if any) contain the important legal information about the foundation, including its purpose, duration, the capital dedicated, and information about the founder.
• Foundation representatives must be appointed following legal requirements, including having at least one board member authorized for management and representation as a professional Liechtenstein fiduciary and trustee and whose place of residence is in the European Economic Area (EEA).
• Foundations are legally required to deposit certain documents with the Office of Justice - Commercial Register Department, including an original or certified copy of the foundation charter, affirmation of available minimum capital, a declaration from the foundation council members, a company signature declaration, and any required permissions.
• A registration letter or application must be submitted to the Commercial Register, which includes important details such as the foundation's name, purpose, date of establishment, duration (if limited), organizational structure, and representation details.
• Foundations that are not subject to a registration obligation are required to deposit a foundation announcement with the Commercial Register within 30 days of establishment.
• Additional permits may be required if the foundation operates a business in a commercial manner, which can be obtained from authorities such as the Liechtenstein Financial Market Authority (FMA).