A trust consists of trust property (trust fund) which is transferred by the settlor to a trustee. The said transfer entails the obligation on the part of the trustee to administer or use such property in his own name as an independent legal owner for the benefit of one or several beneficiaries. A trust is not a legal entity, but rather a contractual legal relationship. Trust relationships or trusts have no legal personality.

Trusts can be set up for charitable, social, cultural or similar purposes and they are usually used in the same manner as a trust settlement or a family trust in English-speaking countries. The assets of a Liechtenstein trust are only subject to the minimum corporate earnings tax of CHF 1,800.00.

Formation

The formation of a trust relationship requires a settlor and a trustee. The trust is created by a written agreement (trust instrument or trust deed) between the settlor and the trustee or by a unilateral trust declaration and its acceptance. The trust relationship is created upon signature of the trust instrument. This instrument governs the relationship between the settlor, the trustee and the beneficiaries. In particular, it can contain provisions for the protection of the beneficiaries’ rights. No minimum amount (minimum trust fund) is required.

The trust can be either registered with the commercial register or deposited with the Princely Court of Justice. In respect of each trust relationship intended to last for a period of more than twelve months, an application for its entry in the commercial register must be filed within twelve months of its creation, provided that the trustee (or, in case of co-trustees, at least one of them) has/her/its his place of residence or registered office in Liechtenstein.

The application for entry in the Commercial Register must contain:

• The designation of the trust relationship
• The date of formation of the trust relationship
• The duration of the trust relationship
• The family name, first name and place of residence or corporate name and registered office of the trustee

Disclosure requirements

A Liechtenstein trust is managed by the trustees. These are under an obligation to render full account of their activities. In this context, the trust fund of a Liechtenstein trust must be kept separate from the property of the trustee. An audit authority can be appointed for compliance with the obligations set forth in the trust’s trust instrument.

Pros and cons

• Legal relationship of a contractual nature
• No legal personality
• No minimum capital or minimum trust fund required
• Trust fund managed or used for the benefit of one or more beneficiaries
• Charitable, social, cultural or similar purposes
• Estate planning
• Long-term preservation of wealth
• Uses similar to those of a trust settlement or a family trust
• Minimum flat-rate corporate earnings tax

Statutory basis (German only)