Liechtenstein has about 40,000 residents. At the end of 2023 it had roughly 9,400 foundations: 1,774 entered in the commercial register and another 7,662 sitting quietly on deposit with the Office of Justice, invisible to the public. And that is the diminished version. Before 2008, foundations in the principality numbered in the tens of thousands, and total legal entities comfortably exceeded the human population. For most of a century, this 160-square-kilometer strip between Switzerland and Austria has been the world's densest concentration of private wealth structures per capita, by a margin nobody else approaches.
The reason is a single piece of legal technology. In 1926 Liechtenstein passed the Persons and Companies Act (the PGR) and gave the world the modern private family foundation: a legal person with no owner, built to hold a family's wealth across generations. When Panama wanted a foundation law in 1995, it copied Liechtenstein's. When we wrote our Panama foundation guide, we called the Panamanian version the budget edition of its Alpine ancestor. This article is about the original: what a Liechtenstein Stiftung is, how the 2009 reform reshaped it, who the parties are, what it protects and what it does not, how the taxation works (including the remarkable Private Asset Structure regime), what it honestly costs, and who should pay the premium over Panama or a common-law trust.
One thing before we start. CitizenX is a Swiss citizenship and residency platform based in Zug, about an hour's drive from Vaduz. We know the neighborhood, but we are not a law firm or tax advisory, and nothing here is legal or tax advice. Foundation planning has serious consequences in your home country, so engage qualified counsel in both Liechtenstein and wherever you pay tax before you sign anything.
What is a Liechtenstein foundation
A Liechtenstein foundation (Stiftung) is a legal person created when a founder dedicates assets to a defined purpose. Once formed, the foundation owns those assets itself. It has no shareholders, no members, and no owner. A foundation council administers it, beneficiaries receive from it, and the founder's wishes, written into the foundation documents, govern it long after the founder is gone. If you have read our Panama guide, the concept is familiar; Liechtenstein is where the concept comes from.
The legal basis is the Persons and Companies Act of 20 January 1926, the PGR, one of the most inventive commercial statutes ever written. A small country with no natural resources decided its export would be legal certainty, and the PGR was the product: a code that offered foundations, establishments, trust enterprises, and even a genuine trust, decades before "offshore" was a word anyone used.
The modern law dates from a full reform that came into force on 1 April 2009. The new foundation law, codified as Art. 552 §§ 1 to 41 PGR, replaced eighty years of accumulated provisions and case law with a single coherent statute. It tightened governance, clarified beneficiaries' information rights, drew a clean line between private-benefit and common-benefit foundations, and created the supervision regime that exists today. The reform was partly housecleaning and partly a response to the 2008 crisis of confidence, which we cover honestly below. The result is a foundation law that is both the oldest and one of the most modern in the world, with a century of court decisions behind it.
The mechanics: a founder executes a foundation deed (the statutes), dedicates capital of at least CHF 30,000 (EUR 30,000 or USD 30,000 also work), and appoints a foundation council. The minimum capital is not a Panamanian-style formality; it must actually be paid in, and the council confirms it is at the foundation's free disposal. The foundation may pursue any lawful purpose except commercial trade as such. Like its Panamanian copy, it is a holding vehicle, not a trading company: it can own operating businesses, portfolios, real estate, and bankable assets of every kind, but the business activity happens in entities underneath it.
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The 2009 law splits foundations into two families, and the split determines both publicity and supervision.
A private-benefit foundation (privatnützige Stiftung) serves private persons, almost always a family. This is the classic Liechtenstein family foundation, and it enjoys a feature that surprises people used to public registries: it does not need to be registered at all. Instead, the foundation council files a notification of formation with the Office of Justice within 30 days. The notification confirms the foundation exists, names the council, and carries a confirmation from a Liechtenstein-licensed lawyer or trustee that the statutory requirements are met. The foundation deed itself is deposited, not published. No searchable public record shows the foundation's statutes, its assets, or its beneficiaries. A family foundation formed this way acquires legal personality without ever appearing in the commercial register, and thousands of them exist exactly that way.
A common-benefit foundation (gemeinnützige Stiftung), meaning charitable or public-benefit, must be entered in the commercial register and is subject to ongoing supervision by STIFA, the Liechtenstein Foundation Supervision Authority, a unit of the Office of Justice. STIFA-supervised foundations appoint an external auditor, file annually, and answer to a regulator whose job is making sure the charitable purpose is actually pursued. At mid-2023 STIFA supervised close to 1,400 charitable foundations, and the number has grown steadily, because Liechtenstein has spent the past decade building itself into a serious philanthropy hub.
The practical takeaway: if you are structuring family wealth, the deposited (non-registered) family foundation gives you a level of structural privacy that few onshore or offshore vehicles match. This is privacy from the public, not from authorities. The Office of Justice knows the foundation exists, your bank knows exactly who stands behind it, and beneficial ownership flows to tax authorities under the automatic exchange rules discussed later. What stays out of reach is the casual searcher: the journalist, the business rival, the plaintiff's lawyer fishing for targets.
How a Liechtenstein foundation is structured
Four roles and two documents, with more statutory definition than Panama gives any of them.
The founder and the founder's rights
The founder (Stifter) creates the foundation and dedicates the initial capital. Founders can be individuals or legal entities, resident anywhere, and formation through a licensed Liechtenstein trustee acting on instructions is common and legally clean.
The 2009 law did something genuinely useful here: it codified exactly which rights a founder may keep. A founder who is a natural person can reserve, in the statutes, the right to revoke the foundation and the right to amend its documents. These reserved rights are strictly personal. They cannot be sold, assigned, or inherited; they die with the founder. That built-in expiry is elegant, because it means a foundation with reserved rights matures into a fully irrevocable structure at the founder's death, exactly when succession matters most.
Reserve rights with open eyes, though. A revocable foundation is weaker on every front that matters. Creditors of the founder can attach a reserved revocation right and unwind the structure to reach the assets. Tax authorities in most countries treat a revocable foundation as transparent, meaning the founder is still taxed as owner. And a foundation the founder can undo at will earns no separation in a divorce or insolvency. The strongest structure is the one where the founder genuinely lets go, keeps no revocation right, and influences the foundation through well-drafted statutes and, if desired, a protector role instead.
The foundation council
The foundation council (Stiftungsrat) is the governing body, the functional equivalent of a trustee or board. The law requires at least two members, who can be individuals or legal entities of any nationality.
Here is the requirement that shapes the whole industry: at least one council member authorized to manage and represent the foundation must be qualified under Art. 180a PGR, which in practice means a Liechtenstein-resident, FMA-licensed professional, typically a trustee (Treuhänder), trust company, or lawyer. You cannot form or run a Liechtenstein foundation without a licensed local fiduciary inside the governance. This is not a registered-agent formality of the Caribbean kind. The 180a member sits on the council, owes duties to the foundation, signs its documents, and carries professional and regulatory liability for what the foundation does.
That requirement is simultaneously the structure's biggest cost driver and its biggest credibility asset. You are paying meaningful annual fees to a regulated professional, and in exchange every Liechtenstein foundation has a supervised, insured, accountable fiduciary at its core. Banks know this, which is one reason a Liechtenstein foundation opens private banking doors in Zurich, Geneva, and Vaduz that cheaper structures knock on for months.
The protector
Optional, common, and useful. Liechtenstein practice has long used protectors (often called curators or collators in older documents) to supervise the council: veto rights over distributions, power to remove and replace council members, consent rights for amendments. The founder can hold the role, a family member or trusted advisor can, or a committee can. As always, the more control concentrated in the founder, the more the structure looks like the founder's pocket, so the protector role is best designed as oversight rather than remote control.
The beneficiaries
Beneficiaries are named or defined in the statutes or, far more commonly, in a supplementary document called the by-statutes. The 2009 law defines several classes with real precision: beneficiaries with a legal entitlement to distributions, discretionary beneficiaries who receive only what the council decides, prospective beneficiaries in line for the future, and ultimate beneficiaries who take on dissolution. The law also codified beneficiaries' information rights, one of the reform's most litigated topics: beneficiaries can, within limits, inspect documents and demand information, which keeps councils honest without exposing the foundation to outsiders.
Statutes and by-statutes
The statutes (Statuten) are the constitutional document: name, seat, purpose, capital, council provisions, reserved founder's rights. For a deposited family foundation even this document stays off the public record. The by-statutes (Beistatuten) are where the sensitive material lives: who the beneficiaries are, in what shares, under what conditions, in what order of succession. By-statutes are never filed anywhere, can usually be amended by the council or under reserved rights, and function like a living estate plan inside the foundation. The two-document architecture is the same one Panama borrowed (charter and regulations), running here with eight more decades of drafting practice behind it.
What a Liechtenstein foundation is used for
Four uses dominate a century of practice.
Dynastic succession. The core use since 1926. A family foundation owns the family's wealth; the by-statutes say who benefits, when, and on what conditions, across generations. There is no probate, because nobody died owning anything; the foundation continues, and the beneficiary provisions simply roll forward. Liechtenstein law does not impose a perpetuity limit on family foundations, so a structure formed today can still be functioning for descendants born in the next century. Forced heirship claims against foundation assets are constrained by Liechtenstein's own rules and short limitation periods, which is a large part of why continental European families have used Vaduz for generations.
Holding companies and keeping a business intact. A foundation at the top of a group solves the problem that kills family businesses: fragmentation of ownership across heirs. Shares sit in the foundation permanently; heirs receive distributions, not shares; no branch of the family can sell out, pledge, or lose its stake in a divorce. Some of Europe's largest family enterprises are held exactly this way, and the pattern scales down to a single operating company worth a few million.
Bankable assets. Portfolios, private equity positions, insurance wrappers, and increasingly digital assets. Liechtenstein's Blockchain Act (the TVTG, in force since 2020) gave the country one of the clearest token frameworks in Europe, and local trustees are notably more comfortable with crypto than their counterparts in most banking centers.
Philanthropy. The charitable foundation sector is the growth story of the past decade. EEA membership matters here: a Liechtenstein charitable foundation operates inside the European single market, and STIFA supervision gives donors and partner institutions a regulator to point to.
Asset protection, honestly
A Liechtenstein foundation gives real protection, and it is worth being precise about the machinery, because it is succession-first protection, not a creditor fortress.
The core is separate patrimony. Assets validly endowed to the foundation belong to the foundation, a different legal person. The founder's personal creditors have no claim on them, the founder's estate does not include them, and a beneficiary's creditors can reach, at most, whatever distribution entitlement the beneficiary actually has (discretionary beneficiaries have effectively nothing to seize).
Transfers into the foundation can be challenged, as everywhere. Liechtenstein's avoidance rules (the actio pauliana of its enforcement law, the Rechtssicherungs-Ordnung) give creditors two main routes: a challenge to transfers made with intent to disadvantage creditors, available for up to five years where the intent was known to the other side, and a challenge to gratuitous transfers, which reaches back one year. Endowing a foundation is a gratuitous transfer, so the practical exposure for a founder who was solvent and unsued at the time is the shorter window, but a creditor who can prove deliberate intent to defeat claims has the longer one. On top of that, reserved founder's rights are attachable: if you kept the power to revoke, your creditors can step into it.
Compare the design philosophy of the dedicated asset-protection islands. A Cook Islands trust forces creditors to sue in Rarotonga, prove fraud beyond a reasonable doubt, and do it within one to two years; Nevis adds a bond requirement just to file. Liechtenstein has none of that procedural hostility. It is an EEA state with functioning courts, judicial assistance treaties, and no interest in sheltering transfers that defraud genuine creditors. Its courts will, however, apply Liechtenstein law to a Liechtenstein foundation, will not simply execute foreign judgments against foundation assets without local proceedings, and have a century of practice upholding properly built structures against opportunistic attack.
The honest selection rule is the same one we gave for Jersey: if your problem is a plausible future lawsuit, an American-style litigation threat, buy the tool built for that and read the Cook Islands and Nevis guides. If your problem is succession, fragmentation, forced heirship, political risk in your home country, or wealth that needs to outlive you by fifty years in a structure banks respect, Liechtenstein is among the strongest answers in existence.
How a Liechtenstein foundation is taxed
Liechtenstein rebuilt its tax system with the Tax Act of 2010, in force since 1 January 2011, and the result is short enough to state plainly.
The default: a foundation is a taxable legal person paying corporate income tax at a flat 12.5% on net income, with a minimum tax of CHF 1,800 per year. The base is friendlier than the rate suggests. Dividends received and capital gains on participations are generally exempt, and a notional interest deduction on equity trims the base further. A foundation holding shares in family companies may owe little beyond the minimum even at the standard rate. Liechtenstein levies no capital tax, no inheritance tax, no gift tax, and, critically, no withholding tax on distributions: payments from the foundation to beneficiaries who are not Liechtenstein taxpayers leave the country untaxed. The old coupon tax on distributions was abolished with the 2011 reform.
Then there is the regime most family foundations actually use: the Private Asset Structure, PVS (Privatvermögensstruktur), created by the 2011 Tax Act. A foundation qualifies as a PVS if it performs no economic activity: it may only acquire, hold, and dispose of bankable assets, participations (held passively, without exercising actual management control over the companies), cash, and similar private assets, for the benefit of natural persons managing their private wealth. A PVS pays only the CHF 1,800 minimum tax per year. Not 12.5% on a narrow base; CHF 1,800, full stop, regardless of whether the foundation holds three million or three hundred million. The status is granted by the tax administration on application and was designed to be compatible with EEA state-aid rules, which the EFTA Surveillance Authority confirmed. For a passive family holding foundation, total annual tax in Liechtenstein is the price of a decent dinner for four in Zurich.
Now the paragraph that matters more than the three above it. Liechtenstein taxing lightly does nothing about the country where you and your beneficiaries live. US persons face the same analysis we described for Panama: the IRS classifies a foundation on substance as a foreign trust or foreign corporation, grantor trust treatment is the usual outcome where the founder keeps rights or benefits, and Forms 3520 and 3520-A, FBAR, and Form 8938 follow, with five-figure penalties for missed filings. Most EU and UK residents face attribution rules aimed precisely at foreign family foundations: Germany's foreign foundation attribution rules, Austria's equivalents, Spanish and French transparency doctrines, CFC regimes where the foundation holds companies. Several of these regimes have carve-outs that turn on whether the foundation is genuinely irrevocable and the founder genuinely excluded, which is one more reason the reserved-rights decision is a tax decision. Liechtenstein joined the automatic exchange of information and reports under CRS, so your home tax authority will know. Build the structure on the assumption of full transparency and take home-country advice before the Liechtenstein engagement letter, not after.
The reputation arc: 2008 and the cleanup
You cannot write honestly about Liechtenstein without February 2008. A former LGT Bank technician, Heinrich Kieber, had copied data on some 1,400 clients and sold it to Germany's federal intelligence service for 4.2 million euros. The first raid, on 14 February 2008, targeted Klaus Zumwinkel, chief executive of Deutsche Post, who resigned within days and was convicted of evading about one million euros in taxes through a Liechtenstein foundation. Investigations followed across Germany, the US, the UK, and a dozen other countries. For a season, Liechtenstein was the world's shorthand for hidden money, and the Senate hearings and OECD blacklist threats that followed were existential for a country whose economy runs on financial services.
What happened next is the interesting part. In March 2009 the government issued the Liechtenstein Declaration, committing to OECD transparency standards. Tax information exchange agreements followed quickly, including with the US and a comprehensive arrangement with the UK. The 2009 foundation law reform professionalized governance. The 2011 Tax Act replaced the old preferential regimes with the EEA-compatible system described above. Liechtenstein signed up to FATCA, then to the Common Reporting Standard, with first automatic exchanges in 2017. The IMF has since noted that the number of trusts and foundations fell by roughly 80% from the 2008 peak: the hot money left, exactly as the reforms intended, and what remained was the substance business. Today Liechtenstein holds AAA ratings from Standard & Poor's and Moody's, one of a handful of sovereigns at that level, sits on no meaningful blacklist, and runs a financial center that regulators cite rather than chase.
The arc matters for a practical reason. What Liechtenstein sells in 2026 is not secrecy; that product was discontinued in 2009 and does not exist anywhere at any price. What it sells is privacy inside transparency: a family foundation invisible to the public but fully known to authorities, in a jurisdiction whose name now signals compliance rather than concealment. Private, not secret.
Liechtenstein vs Panama foundation
The two structures are the same species. Panama's Law 25 of 1995 took the Stiftung's architecture (legal person, no owners, public-facing document plus private beneficiary document) and stripped out the cost. The choice between them is a choice about what you are paying for.
Liechtenstein foundation
Panama foundation
Legal basis
PGR 1926, reformed Art. 552 PGR (2009)
Law 25 of 1995
Minimum capital
CHF/EUR/USD 30,000, actually paid in
US$10,000 nominal, payment not required upfront
Publicity
Family foundations deposited, not registered; statutes private
Charter publicly registered; bylaws private
Local governance
Council of 2+, one licensed Liechtenstein 180a member
Council of 3 (or one entity), nominees common, no local qualification
Supervision
Charitable: STIFA; family: courts on complaint
None beyond resident agent obligations
Tax
12.5% or CHF 1,800 minimum as PVS; no withholding on distributions
Territorial; US$400 annual franchise tax
When Panama wins: estates in the single-digit millions, Latin American nexus, cost sensitivity, straightforward holding and succession goals. Running a Liechtenstein foundation costs more per year than forming a Panamanian one outright, and for many families that arithmetic settles it.
When Liechtenstein wins: larger estates, where CHF 15,000 a year is noise against the assets; any European nexus, because EEA membership, the Swiss customs and currency union (in force since 1924), and treaty access make the foundation a working part of European structures rather than an offshore appendage; philanthropy, where STIFA supervision is a feature; situations demanding substance, since a licensed resident fiduciary on the council answers the "letterbox entity" attack before it is made; and any case where the family's bankers, counterparties, or courts will weigh the jurisdiction's name. Families with nine-figure wealth almost always conclude the premium is cheap. A fuller comparison of the trade-offs sits in our Panama foundation guide.
Liechtenstein trusts: the civil-law country with real trust law
One more Liechtenstein oddity deserves its own section, because people searching "Liechtenstein trust" are not wrong to do so. The same 1926 PGR that created the Stiftung also codified a genuine trust, the Treuhänderschaft, in Articles 897 to 932. That makes Liechtenstein the only civil-law jurisdiction with a homegrown, fully functional trust law: a settlor transfers assets to a trustee who holds them as legal owner for beneficiaries, enforceable in Liechtenstein courts, with no perpetuity limit. Liechtenstein also ratified the Hague Trust Convention, and the trust provisions have been modernized in recent reform work.
In practice the trust is the minority product; foundations outnumber trusts many times over. It gets used by common-law-minded clients (British, American, Commonwealth) who want trust mechanics with a Liechtenstein trustee and Liechtenstein's banking access, and in hybrid structures alongside foundations. If you grew up with trusts and want this jurisdiction, the option exists. Most civil-law families take the foundation, which is the tool the whole system is built around.
Formation: roughly CHF 15,000 to 30,000 all-in for a properly advised family foundation, covering structuring advice, drafting statutes and by-statutes, the licensed trustee's formation work, and government charges (formation duty of a few hundred francs; a stamp duty of 0.2% applies to capital above CHF 1 million). Bare-bones formations through a trustee with standard documents can come in around CHF 8,000 to 12,000, but at that price nobody has thought hard about your by-statutes, which defeats the point.
Annual running costs: roughly CHF 10,000 to 25,000 for a typical family foundation. The licensed 180a council member commonly charges CHF 5,000 to 15,000 per year depending on responsibility and activity; add registered office, accounting and bookkeeping (foundations must keep proper records, and commercially active ones file accounts), the CHF 1,800 minimum tax, and incidental legal work. Complex structures with underlying companies, multiple asset classes, or active distribution programs run higher.
Home-country compliance: the same extra line every structure in this series carries. US persons should budget several thousand dollars a year in specialist CPA fees; EU residents may need annual attribution analyses.
Against Panama's US$1,000 to 2,500 a year, the gap is roughly a factor of ten. Against a Jersey or Cook Islands trust with a professional trustee, Liechtenstein is in the same band or cheaper, with the difference that the fiduciary sits inside a foundation you designed rather than owning the assets as trustee.
How to set up a Liechtenstein foundation
The sequence, realistically:
Take home-country tax advice first. Whether the foundation should be irrevocable, whether you can be a beneficiary, and whether the structure works at all is decided by the law of your residence, not Liechtenstein's. This step is the whole ballgame for US persons and most EU residents.
Engage a Liechtenstein trustee or law firm. You will need a licensed 180a professional on the council anyway, so choose the fiduciary early and choose well; this is a decades-long relationship. Vaduz has a deep bench, from large multi-family trust companies such as Allgemeines Treuunternehmen to boutique firms.
Clear due diligence. Full KYC on identity, source of funds, and source of wealth, to Swiss-tier standards. Expect it to be slower and deeper than anything in the Caribbean, and expect crypto wealth to require documented on-chain history.
Design the structure. Purpose clause, beneficiary classes and succession order, reserved rights (or deliberately none), protector role, council composition, and any underlying holding companies.
Execute the deed and pay in the capital. Minimum CHF 30,000, actually transferred. The foundation comes into existence on formation (registered foundations, on registration).
Deposit or register. Family foundation: the council files the formation notification with the Office of Justice within 30 days, and the foundation stays off the public register. Charitable foundation: entry in the commercial register and STIFA supervision begin.
Apply for PVS status if it fits. A passive family holding foundation should apply to the tax administration for Private Asset Structure treatment and lock in the CHF 1,800 minimum tax.
Fund and run it properly. Transfer the real assets, document every endowment (the avoidance clock runs from each transfer), keep accounts, hold council meetings, and record distribution decisions. A century of Liechtenstein case law rewards foundations that behave like real institutions and punishes those run as the founder's alter ego.
Allow four to eight weeks from engagement to a formed, funded foundation in straightforward cases; banking can add more.
Honest drawbacks
Cost. Ten times Panama's running cost for the same species of structure. Below roughly CHF 3 to 5 million in assets, the fee drag is hard to defend unless a specific European problem demands this jurisdiction.
The 180a member is non-negotiable. A licensed local professional sits in your governance forever, with real duties and real fees. Most families come to value this; founders who want silent nominees and total control will not, and they are better served elsewhere (or nowhere).
EU pressure on foundations. Attribution and look-through rules in Germany, Austria, and elsewhere were written with Liechtenstein foundations specifically in mind, and EU-level transparency initiatives keep tightening. A foundation for an EU-resident family is entirely doable but needs careful, current advice, and the compliance perimeter will not loosen.
Not a litigation shield. Five-year avoidance exposure for intent-based challenges and functioning judicial cooperation mean a determined creditor with a genuine claim has routes here that the Cook Islands would slam shut.
German-language legal culture. Documents can be produced in English, but the statute, the courts, and much of the practice operate in German. You will lean on local advisors more than in an English-language jurisdiction.
Where a Liechtenstein foundation fits in a Plan B
A foundation reorganizes what you own. It does nothing about where you can live or which passports your family holds, and a complete Plan B needs both columns filled.
The order of operations matters. Your tax residence determines how any foundation is treated, so residence and second citizenship planning should come before, or at least alongside, the structure. A Liechtenstein foundation designed for a German resident is a different animal from the same foundation with a founder who has since moved to Switzerland, Dubai, or Italy under its flat-tax regime. Families who relocate first and structure second usually get a simpler, stronger result.
For the personal column, citizenship by investment remains the fastest route to a second passport, and a foundation is a natural long-term holder of the wealth that funds it. Crypto holders tend toward a familiar stack: a position in a crypto-friendly country, a foundation or trust holding the assets (Liechtenstein's Blockchain Act makes it unusually credible for this), and banking across two or three jurisdictions. The foundation is the permanent layer of that stack, the piece designed to outlive you. Build it with the whole plan in view, and build the personal layer first.
Frequently asked questions
What is a Liechtenstein foundation?
A legal person under Liechtenstein's Persons and Companies Act (Art. 552 PGR) created when a founder dedicates at least CHF 30,000 to a defined purpose. It has no owners or shareholders; a foundation council administers it for the beneficiaries named in its private by-statutes. Created in 1926 and comprehensively reformed in 2009, it is the original private family foundation, the model Panama and others later copied.
How much does a Liechtenstein foundation cost?
Plan on CHF 15,000 to 30,000 to form with proper advice and CHF 10,000 to 25,000 per year to run, covering the licensed local council member, registered office, accounting, and the CHF 1,800 minimum tax. Home-country tax compliance is extra. It is roughly ten times the cost of a Panama foundation and broadly comparable to a professionally administered offshore trust.
Is a Liechtenstein foundation private?
Family (private-benefit) foundations are not entered in any public register; the council simply deposits a formation notification with the Office of Justice, and the statutes and beneficiaries stay off public record. Charitable foundations must register and are supervised by STIFA. Privacy is from the public only: banks perform full KYC, and Liechtenstein reports under CRS and FATCA, so home tax authorities are informed automatically.
Liechtenstein vs Panama foundation: which should I choose?
Same legal technology, different price and pedigree. Panama costs a tenth as much and suits estates in the single-digit millions with straightforward holding and succession goals. Liechtenstein offers AAA sovereign standing, EEA membership, the Swiss franc, a licensed fiduciary in the governance, a century of case law, and first-name terms with European private banks. Larger estates, European families, and philanthropists generally find the premium worth paying.
Can a Liechtenstein foundation own a company?
Yes, and holding companies is one of its main uses. The foundation cannot run a commercial business directly, but it can own the shares of companies that do, which is how European families keep operating businesses intact across generations. Note that a foundation claiming Private Asset Structure tax status must hold participations passively, without exercising actual control over management; foundations that actively direct their companies are taxed at the standard 12.5% instead.
What is a private asset structure (PVS)?
A tax status under Liechtenstein's 2011 Tax Act for legal persons that perform no economic activity and only hold bankable assets, passive participations, cash, and similar private wealth for natural persons. A foundation granted PVS status pays only the minimum tax of CHF 1,800 per year instead of the 12.5% corporate income tax, regardless of asset size. Most passive family foundations qualify and apply for it at formation.
The bottom line
The Liechtenstein foundation is the original, and after a century it is still the reference. A legal person with no owner, formed with CHF 30,000, invisible to the public but supervised in substance, taxed at CHF 1,800 a year as a passive holding structure, run with a licensed fiduciary inside its governance, in an AAA-rated EEA state on the Swiss franc. It costs real money every year, it will not hide anything from your tax authority, and it is the wrong tool for fighting off a lawsuit. What it does, better than almost anything else on earth, is hold a family's wealth together across generations in a form that courts, banks, and regulators respect without argument.
It is also, as every article in this series ends by saying, only half a plan. Structures secure assets; citizenship and residence secure people. If you are building the personal side, create your CitizenX profile and we will map the citizenship and residence options that belong alongside whatever your advisors build in Vaduz.
CitizenX is a citizenship advisory platform, not a law firm or tax adviser. This article is general information, not legal or tax advice, and rules change. Consult qualified counsel in Liechtenstein and in your country of residence before establishing any structure.
