Gutenberg Castle in Vaduz, Liechtenstein

Liechtenstein Foundations: A Glimpse at Asset Protection vs Creditor Protection

By Wolfgang Fürnschuss, Advocatur Seeger, Frick & Partner AG

Liechtenstein introduced its foundation law in 1926, when the country’s extensive Persons and Companies Act came into effect. This important piece of legislation set the scene for the country progressing from a mainly agricultural state to a wealthy economy offering a wide array of financial services.

An adequate level of asset protection is crucial in attracting and keeping capital. Asset protection comprises legal techniques aiming at lawfully shielding a person’s assets from claims of his (potential) creditors without committing a criminal offense, acting fraudulently, or evading taxes.

By its nature, asset protection conflicts with creditor protection. Both ends are similarly legitimate, with no intermediate position being right or wrong. Liechtenstein has carefully gauged these two poles and set up a balanced and sophisticated system. Liechtenstein foundations are a prime example.

A foundation is a legal entity with a legal personality distinct from the legal personality of its founder or beneficiaries. Foundations typically serve the same purpose as express trusts in common-law jurisdictions.

The founder of a Liechtenstein foundation may retain the rights to amend the foundation documents and/or revoke the foundation. These rights give him considerable control over the entity and its assets even after its formation. However, sweeping control comes with disadvantages.

In return for the founder’s flexibility in retaining control over “his” foundation, Liechtenstein law permits attaching the founder’s rights to amend the foundation documents and/or revoke the foundation. Thus, creditors may obtain court authorization to exercise these rights on behalf of the debtor/ founder and, for example, revoke the foundation with the assets reverting to the debtor/founder.

Drafting foundation documents is critical. Liechtenstein law offers a variety of tools to ensure that the foundation develops according to the founder’s wishes and intentions. Legal advisors must discern these aims and make sure to align the needs for asset protection with inevitable aspects of creditor protection. When drawn up with knowledge and sound judgment, a Liechtenstein foundation can provide peace of mind in an ever-changing world.

Wolfgang Fürnschuss

Wolfgang Fürnschuss

GGI member firm
Advocatur Seeger, Frick & Partner AG
Law Firm Services
Schaan, Liechtenstein
T: +423 265 22 22
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Advocatur Seeger, Frick & Partner AG is the oldest law firm in Liechtenstein. For more than 160 years, the firm has been a point of contact for legal advice and representation in Liechtenstein. Today, they not only take pride in the consistent satisfaction and success of their clients but also see it as a measure of their own success. The lawyers of Seeger, Frick & Partner provide advice in all areas of Liechtenstein law, locally as well as internationally, and represent clients in court, before administration authorities, and in arbitration proceedings.

Wolfgang Fürnschuss is a senior associate with Advocatur Seeger, Frick & Partner AG, Schaan, which he joined in March 2017. He previously worked for another Liechtenstein law firm for several years. He studied law at the University of Graz, Austria, and holds an LLM degree from the University of California, Los Angeles, USA. He specialises in civil law litigation.

Published: Litigation & Dispute Resolution Newsletter, No. 11, Autumn 2019  l Photo: Bumble Dee -

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