Creation of trusts became possible for the first time within the territory of continental Europe in Liechtenstein in 1926 with the adoption of the Anglo-Saxon trust institution at the legislative level. From 1926 until nowadays, the activities of trusts in Europe are recognized only in Liechtenstein.
Liechtenstein's trust laws included not only all the best of similar existing laws of other countries, but also was supplemented with certain revisions, such as removal of the prohibition on the accumulation of income, cancellation of the term of existence of trusts.
The conditions for the possibility of establishing trusts under the jurisdiction of other countries without applying more favourable conditions to them in Liechtenstein than provided for by the Liechtenstein laws were of no less importance.
A trust established in Liechtenstein can have both commercial and non-commercial goals, while compulsory observing the legitimacy of these goals, and they should not contradict the principles of morality. Basically, trusts are established to generate income when managing family assets and guarantee their long-term protection.
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When selecting a name for the trust, there are no language restrictions, but it is necessary to check through the request to the Commercial Register to get accurate information that the name you have chosen for the trust is not used by anyone. The only restriction on the selection of the name of the trust is the prohibition to use the names of localities or countries as part of the name of the trust. The selected name should be supplemented with the designation “Trust” in its entirety.
According to Liechtenstein's trust laws, the establishment of a trust occurs by entering into a written declaration of trust between the founder on the one part and one or more trust managers on the other. It is also possible to formally establish a trust by drawing up a unilateral trust declaration and consent to it.
The declaration of trust can be executed in any language with clearly defined clauses regarding the conditions of this trust relative to the beneficial owners, the nature of the trust property, the conditions for the distribution of income between the beneficial owners and the final separation of the property of the trust.
Also, it is possible to prescribe the conditions of appointment and functions of the trust protector, which can act as a consultant to the manager or as a person having the right of joint decision, in the declaration of trust, if necessary.
All trusts which existence is planned for more than one year must be registered in the Commercial Register no later than 12 months from the date of their establishment. For this purpose, an official document is provided to the Register, indicating the name of the trust, the date of its establishment, the period for which it was established, and a complete list of trust managers and their addresses.
When registering declaration of trust in Liechtenstein, you must pay a one-time registration fee of CHF 200.
Declaration of trust and all data on the trust are not publicly available, which allows us to give evidence of confidentiality. At the same time, all changes in the data of the trust must be registered in the Register.
The amount of the minimum capital to create a trust is not specified anywhere, and can, for example, amount to one thousand Swiss francs.
The person who establishes the trust and contributes the constituent capital is called the founder of the trust. The founder can be represented both by a natural person and a legal entity. Under the laws of Liechtenstein, the founders of trusts in this country can not manage and control the trust, but have only those rights that are stipulated in the declaration of trust at its establishment.
The trust manager or trustee is in charge of managing the trust. Under the laws of Liechtenstein, the property of the trustee must be kept separately from the property of the trust, and in this case the beneficial owners will be able to claim his ownership if the assets entrusted to the trustee are lost by him.
The Trust can appoint an auditor that is a person who monitors compliance with the declaration of trust.
The founder of the trust determines the beneficial owners, who may be natural or legal persons. The beneficial owners can not manage the trust.
Submission of reports on the activities of trusts in the tax authorities is not required. In Liechtenstein, the minimum tax for the income of trust is 1200 Swiss francs.
The trust can be liquidated at any time. The law does not provide for the timing of the liquidation of the trust.