For decades, Liechtenstein has been actively engaged in the combat against money laundering and terrorist financing and has been guided by the international standard of the Financial Action Task Force (FATF). Since 1999, Liechtenstein has been a member state of MONEYVAL, which is a regional body modelled on the FATF and has its headquarters at the Council of Europe in Strasbourg. MONEYVAL regularly reviews the national regulations of its member states for the implementation of the 40 FATF recommendations and assesses the effectiveness of the national system for combating money laundering and terrorist financing. In June 2022 MONEYVAL published its Country Report on Liechtenstein, concluding that the country demonstrates a high level of effectiveness in identifying and combating money laundering and terrorist financing risks. With these ratings, Liechtenstein also performs very well in comparison with other countries already assessed. Due to the positive report, Liechtenstein is subject to the regular MONEYVAL reporting process and is thus one of only five MONEYVAL member countries with this result.
The international rating agency Standard & Poor’s has once again awarded the Principality of Liechtenstein the top rating of triple-A with a stable outlook as part of its semi-annual review of its rating. In the rating, the strong economy and the good financial situation of the public budgets were highlighted in particular. Furthermore, Standard & Poor’s points to the strong Liechtenstein economy, which has exceptional resilience and broad diversification.
According to the rating agency, the war in Ukraine will also cause supply chain problems and rising commodity prices for Liechtenstein. However, Liechtenstein will be able to cope with “the short-term negative economic effects of the war over the next two years without adverse consequences for the national economy.”
EU compatible funds
Due to the Principality’s membership in the European Economic Area (EEA), EU regulations are fully integrated into Liechtenstein law and investment companies and fund promoters benefit from the access to the European market.
Short authorization period and time-to-market
The maximum authorization period for UCITS is laid down by legislation. It amounts to a maximum of 10 working days. Alternative Investment Funds (AIF) only have to be notified to the Financial Market Authority (FMA). Nevertheless, they are regulated and directly supervised. If the AIF is to be distributed, a distribution notification is required, which the FMA usually confirms within 4 to 5 working days (by law, a maximum of 20 working days).
Setup costs, ongoing administration and supervisory fees are competitive in comparison with other fund domiciles. Since the application of an all-in fee is common practice, fund promoters profit from a high cost planning reliability.
Attractive tax system for investment funds
Revenues from investment funds are tax-exempt in Liechtenstein, and investment funds are not subject of VAT and stamp duty. Except of one special legal form, funds are free of governmental charges for emissions or incorporations.
Funds can be set up as so called umbrella funds comprising one or several compartments which also can be added subsequently. On this basis funds can be launched at a significantly lower cost.
Broad spectrum of investment vehicles
On the framework of European requirements the Liechtenstein fund centre enables a multitude of possibilities in setting up investment vehicles and enables a significant degree of flexibility in regard to investment strategies.
The fast and efficient integration of EU regulation with respect to the finance sector has led to a high degree of legal certainty with optimal conditions for financial intermediaries.
High investor protection
Liechtenstein has introduced stringent rules of conduct to protect investors in the funds sector. Both the regulator and independent auditors scrutinise the activities of management companies and fund managers in the Principality.
Highly efficient banking system
The investment fund market benefits from access to a highly efficient banking system. The banks of the Principality are amongst the best-capitalised in the world and did not need any government assistance during the financial crisis.
Transparent finance centre
Due to the implementation of extensive tax agreements and due to the participation in the automatic exchange of information as an early adopter, Liechtenstein has been recognised as a leading jurisdiction for investment funds.
High level of political continuity and stability
The Principality has enjoyed the highest level of political, social, and economic stability over the past 300 years combined with a forward-looking, pro-business approach.
Solid fiscal policy and liberal economic policy
Liechtenstein has no government debt and is one of only 11 countries worldwide with an AAA rating from Standard & Poor’s. The liberal attitude of Liechtenstein’s Government and its population is the reason for limited state intervention in the economy.
Customs and currency union with Switzerland
On account of its membership of the EEA and the customs and currency union with Switzerland, Liechtenstein is in a unique position to act as an economic crossroads between the two regions.
Long-standing tradition in the area of private label funds
Liechtenstein has a long-standing tradition in asset management and in the banking industry and a proven experience in the area of portfolio structuring.
If you are interested in setting up a fund under Liechtenstein law, we recommend to contact one of the providers directly.
This marketing communication is intended exclusively for information purposes and and cannot replace individual and detailed consulting.
The government of the Principality of Liechtenstein has autonomously implemented all restrictions decided by the EU due to the war in Ukraine. The LAFV Liechtenstein Investment Fund Association supports the imposed sanctions without reservation.
The LAFV and the entire fund industry are deeply concerned and worried about the events in Ukraine and the accompanying human suffering. We condemn the war and hope for an early end to this horror.