If you intend to open a holding company in Liechtenstein, the best type of company suited for this kind of activity is the Establishment (Anstalt). Under Liechtenstein law, the establishment is a form of legal personality. There is a wide range of options in designing the structure of this type of company. Some establishments are similar in nature to a foundation, while others are similar to corporations with capital divided into shares.
How to incorporate a holding in Liechtenstein
To open up an establishment, it is necessary to draw up the formation documents, meaning the company deed and the articles of association that are notarized by a public notary in Liechtenstein. A separate legal personality is not required until the new company is entered in the Public Register.
An establishment can be formed by individuals or legal entities from Liechtenstein or abroad and it only one founder is needed.
After the company is included in the Public Register, any person, on request, can obtain an extract from the Public Register regarding a certain company. This extract will reveal the following information: register name, date of entry, corporate name, registered office, date of formation, object of activity, establishment capital, members of the board of directors, authorized signatories and representatives, legal representative. Additional details are not published.
The establishment can be used for both commercial and non – commercial activities. In addition to conducting trading and financial transactions, the establishment can be used for asset management and for holding participations. However, the object clause in the articles of association must state in each case whether or not the establishment is allowed to transact commercial business.
The minimum capital required for an establishment is 30,000 CHF and 50,000 CHF is the capital is divided into shares. It can be deposited in cash, in a bank account, or through contributions in kind. During the incorporation process, it is necessary to obtain a Certificate of Deposit from the Liechtenstein bank where the capital was deposited. Additional funds can be endowed to the establishment after is creation.
Liability of a holding company in Liechtenstein
The assets of the establishment are liable to the creditors, if they exist. As a matter of principle, neither the founder or the governing bodies of the establishment are personally liable. Neither of them has any statutory obligation to make additional contributions.
The legislative authorities in Liechtenstein have given extensive personal discretion to the founder to specify in the articles of association how the establishment will be organized.
Unless specified otherwise in the articles of association, the holder or holders of the founder’s rights represent the supreme governing body of the establishment. If an establishment is similar in nature to a foundation, the founder’s rights are not necessary to exist as the highest governing authority.
The board of directors is responsible with managing the business and representing the establishment in all matters stipulated by law. The board of directors exercises this function regardless if it has been assigned the function of the establishment’s supreme governing body as well.
At least one member of the board of directors who is authorized to represent the establishment and manage its business must hold an appropriate license or a special approval of the government.
If the establishment pursues commercial activities, or is permitted to do so under its articles of association, it must appoint auditors who are licensed to practice in Liechtenstein. If the establishment does not purse any commercial, activities, the appointment of auditors is optional.
The beneficiaries of the Liechtenstein establishment are entitled to the economic benefits in form or pecuniary rights to the establishment. The articles of association may specify that the rights of the beneficiaries cannot be withdrawn from them by their creditors by way of levy of execution or by bankruptcy proceedings.
Establishments that conduct commercial activities are required to keep a proper set of accounts. Auditors must audit the annual accounts. These accounts must be submitted with the Liechtenstein tax authorities within six months after the closing of the business year.
Benefits of a holding company in Liechtenstein
The most important benefits of setting up a holding company in Liechtenstein are the following:
- Extensive flexibility in setting up the structure of the company;
- The option to create a structure similar in nature to a foundation, but with the possibility to conduct commercial activities;
- Having the necessary instruments for succession planning over several generations, in case of assets management;
- Asset protection;