The Intersection of Cryptocurrency and Corporate Capital in Liechtenstein – an Overview

Josef Bergt
2023

In the realm of corporate finance, the advent of cryptocurrencies has introduced a novel dimension to the traditional paradigms of capital formation. The Principality of Liechtenstein, renowned for its progressive stance on blockchain technology and cryptocurrencies, offers a unique framework that allows companies to pay up their capital using cryptocurrencies. This article delves into the intricacies of this process, elucidating the conditions, legal considerations, and practical aspects involved.

When a company is being established, or during a capital increase or retrospective paying up, the company capital can be contributed via a cryptocurrency. This process is recognized as a contribution in kind. The legal framework governing these contributions is encapsulated in the Liechtenstein Persons and Companies Act (Personen- und Gesellschaftsrecht – “PGR”) and the Liechtenstein Commercial Register Ordinance (Handelsregisterverordnung – “HRV”).

In terms of the cryptocurrencies that are deemed acceptable for such contributions, the Office of Justice currently approves Bitcoin and Ethereum. However, companies wishing to utilize a different cryptocurrency are advised to engage with the Office of Justice/Commercial Register for necessary clarifications.

The cryptocurrency intended for contribution must be explicitly identified in a written agreement, with the respective abbreviation included, such as Bitcoin (BTC) or Ether (ETG). The value of the contributed cryptocurrency must be at least equivalent to the value of the company capital as stipulated in the articles. The agreement should also detail the valuation method, the trading platform used for valuation, and the stated market value.

In the context of valuation, contributions of property or rights are typically required to be valued by an expert. However, this requirement is waived for cryptocurrencies due to their daily published reference prices and objective market value. This allows any person to view and determine the value of a specific cryptocurrency at any time and on any reporting date.

When company capital is paid up using a cryptocurrency, the articles of association must contain specific information. This includes details about the contribution in kind, the name of the contributor, acceptance of shares or other performances in place of payment, and precise information about every type of founder’s benefit.

Upon completion of the process, the details of the contribution in kind, the shares issued for this purpose, and the content and value of any special benefits are entered in the Commercial Register.

Source: Factsheet AJU/ h70.038e.01

Executive Summary:

• Under certain conditions, company capital can be contributed using cryptocurrencies in Liechtenstein.
• The process is recognized as a contribution in kind and is governed by the Liechtenstein Persons and Companies Act and the Liechtenstein Commercial Register Ordinance.
• Currently, Bitcoin and Ethereum are approved for such contributions, with the possibility of using other cryptocurrencies after consultation with the Office of Justice/Commercial Register.
• The value of the contributed cryptocurrency must be at least equivalent to the value of the company capital as stipulated in the articles.
• The requirement for an expert valuation is waived for cryptocurrencies due to their daily published reference prices and objective market value.
• The articles of association must contain specific information when company capital is paid up using a cryptocurrency.
• Upon completion of the process, the details are entered in the Commercial Register and published in the Electronic Gazette.