Services · Trusts & private foundations

Liechtenstein trust

The only continental European country with a statutory trust of its own. How it works after the reform of 1 July 2026. Open pricing.

Liechtenstein is the only country in continental Europe where the trust exists not as a borrowed foreign device but as an institution of its own law. It sits in the Persons and Companies Act (Personen- und Gesellschaftsrecht, PGR) since 1926, articles 897-932, and has never been repealed. The result is a rare hybrid: civil law of the German tradition plus a working trust mechanism.

For a client this is first of all a question of how counterparties react. If you need a trust but your bank or notary tenses up at the word Nevis, Liechtenstein removes half the friction: the country is part of the European Economic Area, trustees are licensed by the financial regulator FMA, the banking infrastructure is closely tied to the Swiss one, and the 1985 Hague Convention on the law applicable to trusts and on their recognition has been in force for the principality since 1 April 2006.

The price of all that is a different level of scrutiny over documents, source of funds and ongoing administration. Since 1 July 2026 the bar has moved up again: Liechtenstein trust law went through its first serious reform in almost a century. Below we set out how a Liechtenstein trust works today, what it is good for and where it breaks. For the other local vehicle, see Liechtenstein private foundation.

How a Liechtenstein trust is built

A Liechtenstein trust (Treuhänderschaft) is not a legal entity. It is a legal relationship: the settlor (Treugeber) transfers movable or immovable property or rights to a trustee (Treuhänder), who holds and manages them in his own name as an independent holder of rights, but for the benefit of the beneficiaries and strictly within the terms of the trust deed.

The mandatory parties are the settlor, the trustee and the beneficiaries, or a purpose where the trust is a purpose trust. A protector and advisers are often added. A trust can be created in three ways: by written agreement, by unilateral declaration of the settlor, or by testamentary disposition. The relationship arises from the document itself, not from an entry in any register.

The constraint that makes a do-it-yourself Liechtenstein trust impossible: at least one trustee must hold a professional licence. Licences are issued by the FMA under the Trustees Act; the candidate sits a statutory examination and evidences several years of qualified practice in the sector. On top of that the trustee must carry professional indemnity insurance of at least CHF 1 million per claim and CHF 2 million for all claims in a year. This is one reason administration here costs more than in an island jurisdiction.

There is no statutory minimum capital for a trust. In practice the floor is set by the trustee and the bank rather than by law: the structure has to justify its own administration, or nobody will take it on.

The trustee must manage the property with the care of a prudent businessman, keep accounts and report annually. Creditors of the settlor and creditors of the trustee have no access to the trust property - that segregation effect is usually the whole point of the exercise.

Register, deposit and confidentiality

Where a trust is created for a term longer than twelve months, the trust deed must either be entered in the Commercial Register (Handelsregister) or deposited with the Office of Justice. An important detail: neither registration nor deposit has constitutive effect. The trust is valid without them, but the formality still has to be complied with.

The difference between the two routes is publicity. On deposit the text of the deed is not released to third parties: access belongs to the depositor and their universal successors. The Office of Justice will, however, confirm on request that a trust exists. On registration a public entry for the structure appears.

A separate regime applies to the beneficial ownership register. Data is filed within 30 days; the register is not public but is accessible to banks, financial institutions and other persons subject to customer due diligence duties. In other words, confidentiality in Liechtenstein means no shop window for the public, journalists and competitors - not invisibility to states and banks.

What the reform of 1 July 2026 changed

The trust law reform took effect on 1 July 2026. It left the basic construct alone but raised the bar sharply on governance, control and documentation.

The headline change for private-purpose trusts is the information-entitled person (Informationsberechtigter). This is an appointed person with broad statutory rights to information, disclosure and control, including annual accounting by the trustee to that person. As a rule the person must be independent and hold legal or economic qualifications; the detail can be tuned in the trust documents. The logic is clear: a discretionary trust should have someone able to hold the trustee to account, even when the beneficiaries are minors or do not yet know about the structure.

What else changed:

• trustee duties are codified, with written policies on conflicts of interest, delegation and investment decisions;
• minutes and decision logs are required for all material trust decisions;
• record retention is tightened: annual asset statements for 10 years, minutes for the life of the trust plus 10 years;
• the trustee may ask the court for binding directions on a disputed point, which shields him from later claims;
• FMA powers are expanded: on-site inspections, document requests, remedial orders, and supervision now covers governance failings, not only financial irregularities;
• charitable trusts must now be entered in the Commercial Register - deposit used to be enough - and fall under the authority renamed from STIFA to STIFTA, the foundation and trust supervisory authority.

The transition deadlines for existing structures are hard dates: charitable trusts by 31 December 2026, private trusts by 31 December 2027, meaning documents brought into line and an information-entitled person appointed. Where the settlor reserved no power of amendment, the reform still allows the necessary changes to be made; where the settlor has died or cannot be reached, the trustee applies to the court.

The practical takeaway: if you already hold a Liechtenstein trust, 2026 and 2027 are work, not paperwork. Documents that do not meet the new standard create exposure for the trustee and questions from the regulator, and the cost of fixing them falls on the structure.

How a Liechtenstein trust is taxed

A trust has no legal personality, so ordinary corporate income tax does not apply to it as an entity. But a trust resident in Liechtenstein pays the annual minimum income tax of CHF 1,800. In substance this is a fixed state charge for the structure existing at all.

From there the road forks. Structures that carry on no economic activity and only acquire, hold, manage and dispose of financial instruments, participations, cash and bank accounts can qualify as a private asset structure - Privatvermögensstruktur, PVS. For a PVS the same minimum tax replaces the 12.5% rate and reporting is stripped back. The conditions are strict: no commercial activity and no publicly traded interests.

At family level: Liechtenstein has had no inheritance or gift tax since 1 January 2011, coupon tax has been abolished, and distributions to beneficiaries are not subject to withholding tax. A duty to disclose gifts above CHF 10,000 does remain.

Do not confuse the levels: these are Liechtenstein taxes. Your own tax is computed under the rules of your country of tax residence, and that is usually where the complications live. For the wider picture see taxes by country.

CRS and transparency

Liechtenstein was an early adopter of the Common Reporting Standard: the automatic exchange law entered into force on 1 January 2016 and the first exchange took place in 2017 for the 2016 reporting year. There is no carve-out for trusts.

For CRS purposes a trust is classified either as a financial institution or as a passive non-financial entity. Where the trust is passive, the bank holding the assets identifies and reports the controlling persons - settlor, trustee, protector, beneficiaries - together with balances and distributions. The ability to elect financial institution status through an opt-in was removed back in 2020. From 2026 the reporting perimeter widens further to cover crypto-assets.

The conclusion is simple: a Liechtenstein trust is a tool for wealth governance, succession and creditor protection, not a way to hide money from your own tax authority. If the brief is to conceal, this is the wrong jurisdiction. On controlled foreign company and foreign structure rules, see CFC.

Where a trust beats a foundation

Both vehicles are available in Liechtenstein, and the choice is not cosmetic.

• Succession planning with flexible discretion. A trust lets you fine-tune who receives what and on what conditions, and adjust it without corporate procedure.
• Fast asset segregation. A trust arises from the deed: no minimum capital, no CHF 30,000 to pay in, no notarised founding instrument.
• Common law participants. British, American, Canadian and other common law families read a trust intuitively, while a foundation is exotic to them; their lawyers and tax advisers know how to work with trusts.
• Layered structures. A trust is often placed above a holding company, or even above a foundation, to settle the ultimate ownership question.
• Cross-border recognition. The Hague Convention gives a Liechtenstein trust a clear recognition framework in the states that ratified it.

Conversely, where the family sits in Germany, Austria or Switzerland, a foundation is usually simpler: it has legal personality, a familiar governance logic and a tax characterisation local banks and authorities recognise. In that case see Liechtenstein private foundation. Nearby alternatives are the Swiss private foundation and the Austrian Privatstiftung; among offshore trusts the usual comparison is the Jersey trust.

Who a Liechtenstein trust does not suit, and what can go wrong

An honest list of reasons to walk away.

• Modest capital. A licensed trustee, his insurance, the CHF 1,800 minimum tax, the bank, and the post-2026 document review are fixed costs that do not scale with the size of the assets. On a few hundred thousand they eat the point of the exercise.
• Wanting to keep full control. The more powers the settlor reserves to direct the trustee, the weaker the creditor protection and the higher the chance his home tax authority treats the structure as transparent. A trust the settlor actually runs protects poorly.
• Assets already under threat. A transfer made against the background of asserted creditor claims or live litigation is open to challenge. Protection matures over time: forced heirship claims generally do not reach the structure where the settlor survived the transfer by two years, gave up his reserved powers, and the forced heirs are not themselves beneficiaries.
• Residence in an attribution-tax country. Germany attributes income of family foundations and trusts directly to the settlor and beneficiaries. In Russia trusts and foundations fall under the regime for foreign structures without legal personality, with notification duties for the controlling person and, in defined cases, tax on profits. In those situations the economics are decided by your country, not by Liechtenstein.
• Opaque source of funds. A Liechtenstein bank and a licensed trustee dig into the origin of capital more deeply than most offshore providers. A weak file means a refusal at the door, after you have already paid for the preparation.
• Expecting anonymity. Between the beneficial ownership register, CRS, trustee duties and FMA supervision, the state, the bank and the tax authorities where the participants live all know about the arrangement.

What actually goes wrong in practice. The deed is a template that does not reflect the real family understanding, so the first inheritance dispute is settled in court rather than by the document. The settlor signed the deed but never changed his behaviour, still dealing with the assets directly while the trustee ratifies afterwards. Nobody tracks the reform transition dates and the structure falls out of compliance. A beneficiary moves tax residence, the whole tax model breaks, and the trustee finds out a year later. All four are cured by reviewing the structure regularly, not by setting it up once and forgetting it.

Fees

The state fee is fixed; everything else depends on the structure: the number of parties, the asset mix, whether a protector and an information-entitled person are appointed, and the depth of the source of funds review.

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees, trustee remuneration and bank tariffs are billed separately unless explicitly included.

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