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Set up an Investment Fund in Liechtenstein

Updated on Friday 24th August 2018

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Liechtenstein is a well-known destination for entrepreneurs interested in setting up an investment fund that is compatible with other EU similar funds. This way, the founders of the investment fund in Liechtenstein will have access to the European market and will benefit from investor protection and confidentiality offered by the banking secrecy.

Other advantages are those related to the economic and political stability, the developed banking system and economic policies and taxation that are favorable to the foreign investors etc. The investment funds are monitored by Financial Market Authority (FMA), an entity that is recognized in EU, and that can approve the establishment of a fund in just a few weeks.  

Our company formation agents in Liechtenstein can offer information about the legislation related setting up an investment fund in the Principality.

Laws for opening investment funds in Liechtenstein

Foreign and local investors who want to set up investment funds in Liechtenstein must comply with the following laws:

  • -       the Undertakings for Collective Investments in Transferable Securities Law, also known as the UCITS legislation;
  • -       the Alternative Investment Fund Managers (AIFM) Directive;
  • -       the Investment Company Act.

It is important to know that Liechtenstein has also adapted most of its laws related to setting up funds to the EU legislation and has even adopted most of the directives which allow an easy access to EU investors.

You can watch the video below for information on how to open an investment fund in Liechtenstein:

Requirements for opening an investment fund in Liechtenstein

The investors who want to set up a fund in Liechtenstein need a minimum capital of CHF 2 million and they have to provide a list of documents for the incorporation. If you want to find out more about the requirements for opening an investment fund, our company formation advisors in Liechtenstein can provide them. They will help you choose the proper fund type tailored to your business needs and interests.

After you submit all the necessary documents for establishing an investment fund, you have to wait between two and five months, depending on the fund type, and this is a short period compared to the deadlines in other countries. Qualified investors don’t need a formal permit for joining an investment fund and they are subject only to a simplified procedure.

Documents needed to create an investment fund in Liechtenstein

The following requisites and documents are required for starting an investment fund in Liechtenstein:

  • -       a prospectus containing information on the services and organization of the fund;
  • -       the company name which must contain references to the services of the fund;
  • -       the address of the company – the company managing the fund must have a Liechtenstein address;
  • -       the management company must submit a sustainable business plan with the FMA;
  • -       a guarantee of the proper management of the fund is also required.

This guarantee is presented under the form of the qualifications and experience of the fund manager. 

Types of investment funds in Liechtenstein

You can choose from the following types of investment funds, such as:  

  1.     Investment Undertakings for Securities which can be set up as unit trusts;
  2.     Investment Undertakings for other values which can also take the form of unit trusts;
  3.     Investment Undertakings for real estate which can be created as investment companies;
  4.     Investment Undertakings for qualified investors which can be set up as trusts or investment companies.

The legal forms you can establish a fund in Liechtenstein are: as an investment fund and as an investment company. In the future, the funds in Liechtenstein will be divided into two categories - funds undertaking the collective investment of transferable securities and the others.

Organization of investment funds in Liechtenstein

Depending on the type of fund and the services offered, the following organizational structures must be ensured:

  • -       all types of funds need to have a compliance officer who will make sure the fund operates in accordance with the FMA’s regulations;
  • -       funds must also ensure the risk compliance functions with respect to the risks of investors;
  • -       funds must also appoint an internal auditor who will verify the fund’s accounting;
  • -       funds must appoint a person or authority who handles clients’ complaints.

Why open an investment fund in Liechtenstein?

Liechtenstein is a preferred destination when it comes to establishing investment funds because of the low taxes investors must pay. Even if the investment company is subject to the income tax on all its earnings, the tax rate is one of the lowest in Europe and in the world – 12.5%. Also, Liechtenstein funds are deemed non-taxable entities when it comes to the stamp duty. This provision applies in accordance with the Swiss legislation, as Liechtenstein has a customs union with Switzerland.

Other tax incentives related to investment funds in Liechtenstein are the exemptions from the turnover tax for the issuance of fund shares, as well as the exemption from the property tax. Liechtenstein has abolished the property tax a few years ago, which makes the country very appealing for opening companies in other industries also.

Other advantages of creating a Liechtenstein fund are:

  • -       easy access to other markets;
  • -       a quick licensing process;
  • -       enhanced investor protection.

For more information on the advantages when opening an investment fund, you may contact our company formation consultants in Liechtenstein who will help you open any type of company available in this country.

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