Liechtenstein Trust Types and Foundations

Trust formation and registration

Under Liechtenstein law, a Liechtenstein trust arises without entry in the commercial register, but requires registration or a corresponding filing if it continues for more than one year.^[1]

Foundations

A Liechtenstein foundation is a separate legal entity. A founder establishes it, supplies the initial assets and designates the beneficiaries. It overlaps with a trust in function, but it has its own legal personality, and a trust does not. The foundation's assets are separate from the founder's and are liable for the foundation's own liabilities.^[2][3]

A foundation may serve charitable or private purposes. A charitable foundation may conduct commercial activity only where that activity directly achieves its charitable purposes or is expressly permitted by law, while a private foundation may carry on activity needed for the proper investment and management of its assets. Formation requires minimum capital of 30,000 Swiss francs, euros or U.S. dollars.^[3]

The founder determines the purpose and beneficiaries and may reserve rights to revoke the foundation or amend its documents.^[3]

U.S. tax classification of a foundation

A foundation is an entity, so the U.S. result depends on classification under Treas. Reg. sections 301.7701-2 through 301.7701-4, and the absence of a dedicated foundation form does not take it outside U.S. tax. Depending on its terms, a foundation can be treated as a foreign trust (Forms 3520 and 3520-A, with grantor trust status if the founder holds revocation or similar rights), as a foreign corporation (Form 5471, with CFC and PFIC consequences), or as another entity type. A U.S. founder or beneficiary may also have Form 8938 and FBAR duties for its accounts. See Foreign entity tax classification and Panama foundation versus trust: U.S. classification.

For the jurisdiction's broader context, see Liechtenstein trusts for U.S. citizens. For information exchange and U.S. trust forms, see Liechtenstein reporting and U.S. trust forms. The court structure is covered at Liechtenstein courts and legal system. For a comparison with another jurisdiction, see Guernsey trust types and features.

Related resources

Related glossary terms

• Tax residence: Tax residence describes a person's status in a country for tax purposes. Treaty texts address how it affects income items and applicable treaty requirements.
• Nongrantor trust: A nongrantor trust is taxable to the extent its assets are not treated as owned by another person. Partial treatment and beneficiary reporting both apply.
• Charitable trust: A charitable trust holds property for charitable purposes, and trust laws relate it to purpose trusts and to the other categories of trust used in planning.

Related articles and guides

• Cook Islands Trust Legislation: Cook Islands requirements for international trusts and the supervision of trustee companies under the Trustee Companies Act 2014, for U.S. citizen readers.
• Panama Private Foundation Formation and Fees: Panama private interest foundations are governed by Law 25 of 1995 and have a legal basis, defined purposes, governance arrangements and founding documents.

Tools and official documents

• IRS form finder: Search form reference pages by keyword or number. Each result has a one-line description, and matches run across form titles and numbers, plus descriptions.

Related pages

• Liechtenstein: overview: Start page for this jurisdiction.
• Courts and legal system
• Reporting and information exchange