Liechtenstein corporate bodies are formed under the Law on Persons and Companies 1926, known as the PGR Code.

Trust Enterprises are formed under the Law Concerning the Trust Enterprise 1928. A wide variety of types of entity can be formed under the PGR Code, the most commonly used of which are described below; other possible forms include the limited partnership with a share capital, the company limited by quota shares, the association, the cooperative association and the company without juridical personality; but they are not commonly met with in offshore situations.

All corporate forms that are allowed under the Code, and the Trust Enterprise, can additionally be either 'holding' companies (companies that hold investments) or 'domiciliary' companies (not having trading activities inside Liechtenstein). Holding, domiciliary and non-resident entities are sometimes known as 'exempt', ie exempt from certain types of taxation.

No permits or licenses are required to do business, except for financial sector companies and professional services.

It is a notable feature of the Liechtenstein PGR Code that there is very great freedom, within the basic forms it describes, to constitute corporate and share structures in a flexible way according to the particular purpose of the entity and its originators' wishes. Therefore only rather general statements can be made about the rules governing the operation of the various forms; the rest will depend on circumstances.

Corporate bodies formed under the PGR Code (not Trusts) share a number of characteristics:

there must be written Articles of Association; they are deposited with the Registrar and are available on the public file, including details of capitalisation, share structure, registered office, etc;

the corporate body does not come into existence until its details have been entered into the public register;

the names of the directors, officers and shareholders are kept at the registered office;

the corporate name can be in any language and must include the name of the type of body concerned (Limited, Foundation, etc), but some words are not permitted, mostly those with national or international territorial meanings (exemptions may be available)

The Company Limited by Shares is designed to be used as a public company, although it does not have to be public. There are founders who are (can be) distinct from the shareholders.

The Company Limited by Shares has a minimum capital of SFr 50,000, 20% of which must be paid up, with a minimum paid up of SFr 50,000. Bearer shares must be fully paid up, although the Articles can permit them to be 50% paid up; the minimum is still SFr 50,000.

If there is to be no public subscription, the company is formed 'simultaneously', in one legal act, and the founders are the shareholders. They create the company by entering into a Deed.

If there is to be a public subscription, the company is formed 'successively': first, the founders declare their intentions in general, then the subscription process takes places, and in a general meeting of subscribers (shareholders) the final details of the company's constitution are ratified.

Shares can have variable voting rights (eg multiple votes, or restricted votes), but non-voting shares are not permitted. The appointment of an auditor, and the annual submission of audited accounts to the Registrar, are mandatory for the Company Limited by Shares.

The Limited Liability Company (Aktiengesellschaft) is formed by two or more members and has a minimum capital of SFr 30,000. The minimum subscription amount from any one shareholder is SFr 50. Further amounts need not be paid up unless the Articles provide for it; but the joint liability of the shareholders on liquidation or withdrawal is the amount of the registered capital.

Various types of share can be issued, including preference, registered, voting, no-par-value and bearer shares; only registered shares can be issued at below par value;

voting rights can be allocated or not freely to all types of shares, and voting rights can be limited according to defined circumstances or occasions;

a minimum of one director is required, who may be corporate; secretaries are not required; an exempt company needs to have a local professional as an agent;

audited annual accounts have to be filed

The Establishment, or Anstalt, is a corporate form that is peculiar to Liechtenstein. It has no members or shareholders. 

It is an autonomous fund with beneficiaries. It is often used as a holding company for patents or royalties, or for estate assets. It has a founder or founders, who are not necessarily the same as the beneficiaries; the founders' rights can be transferred, if the capital is not divided into shares, giving the current tenants of the founders' rights considerable powers over the Establishment. In this respect, the Establishment is similar to the Foundation.

The minimum capital, if not divided into shares, is SFr 30,000; and if higher, at least half (minimum SFr 30,000) must be paid up;
the minimum capital, if divided into shares, is SFr 50,000 (but this form is never nowadays used);

a minimum of one director is required; it is normal to delegate substantial powers of management to the director(s);

if the Establishment has commercial objects, audited annual accounts must be filed; but note that the management of investments or other assets is not deemed 'commercial

A foundation exists to give effect to the stated, non-commercial wishes of its founder, as set out in a foundation deed and the Articles of Association (Statutes). In effect, the assets with which the foundation is endowed become a separate legal entity.

The Foundation has no members or shares; it is set up by a founder (or founders). Most often, this is the form that is used for the continuation of family assets. The Foundation has beneficiaries, who may be identified in a variety of ways.

No public registration is necessary, except that a copy of the Foundation Deed is lodged with the authorities. It need contain only very general statements about the purpose of the Foundation, while detailed rules are set out in private bye laws.

Founder's rights are transferable, and they normally include the right to terminate the Foundation or amend the bye laws.

Commercial activities are not permitted except in so far as they are in pursuit of the Foundation's non-commercial goals. The minimum assets of a Foundation are SFr 30,000, which can not be divided into shares; the assets do not necessarily have to pass to the Foundation on formation;

A Foundation is normally administered by what amounts to a board of trustees

The Trust Enterprise is set up by a Trustor (settlor) through a Deed of Trust which is equivalent to Articles of Association, and must specify the name and purposes of the Enterprise, the identity of the trustees, the composition of the trust fund, and (if the purposes are commercial) the identity of the auditors. As usual, 'commercial' does not include asset management or holding operations. The Deed of Trust is filed with the Registrar of Trusts. The minimum trust fund is SFr 30,000. The participants in a Trust Enterprise are largely shielded from creditors of the Enterprise, who have access only to its own assets.

A Trust Enterprise can be created either without legal personality, and is then called an 'active trust' (eigentliche Geschaftstreuhand), or with legal personality, in which case it is called a 'non-active trust' (uneigentliche Treuunternehmen). Only non-active trusts have gained currency in Liechtenstein, and they are frequently used to hold investment assets, for instance in merger situations, and for the distribution of income from real estate holdings.

One of the trustees must be a resident of Liechtenstein holding a recognised professional or other qualification. In the case of a non-commercial (ie unaudited) Trust Enterprise, this person certifies to the Registrar that the Trust has kept proper books and that no commercial activities have been carried out. This is the only reporting that is required.

Liechtenstein is the only civil law jurisdiction which has adopted largely anglo-saxon trust legislation (contained in the PGR Code), although, unlike the common law trust, there is no bar against accumulation of income, nor against perpetuities.

A Liechtenstein Trust is set up by a written agreement (Trust Deed) between the trustor (settlor) and trustee(s) which does not have to contain the names of beneficiaries. If the Trust Deed is deposited with the Registrar of Trusts, it will not be publicly available, and later instruments (eg naming beneficiaries) will not have to be revealed; if the Trust Deed is not deposited within 12 months, details of the Trust must be placed on the public register. A registration fee of US$ 200 is payable on registration.

Some of the characteristics of Liechtenstein Trusts are as follows:

a trustee (apart from the Liechtenstein professional mentioned above) can be an individual or a corporation or association;

trustees are liable for breach of trust to the full extent of their assets; joint trustees are jointly liable; supervision of the trust is ultimately under the Court, even if the Trust Deed specifies alternative supervision;

the interests of named beneficiaries can be embodied in trust certificates, which if registered are transferable securities;

being a civil law jurisdiction, trust assets are vulnerable to forced heirship provisions, although there are time limitations on such claims;

in general, there is a limitation of one year on creditors' claims;

trust documents, including the Trust Deed, can be in any language

Banking, especially private banking, is Liechtenstein's flagship financial service, although its trust regime, modelled on common law precedents, is unique among civil law jurisdictions, and is widely used. The variety and great flexibility of the corporate forms available in Liechtenstein, coupled with excellent tax-saving possibilities, has encouraged an inflow of holding and investment management companies.

It is unclear whether the EU's Savings Tax Directive, which will probably force Liechtenstein to make a choice between information-sharing and a withholding tax on the returns from savings, will have an impact on the country's highly successful private banking sector.

The administration has recently been developing legislation for captive insurance and collective investment sectors, but they have yet to reach significant size.

A substantial banking sector has developed in Liechtenstein, particularly in private banking, due to a combination of factors, including a relatively relaxed but still highly respected regulatory regime, the very flexible company legislation, and strict banking privacy.

The Liechtenstein banking sector is regulated under the Law on Banks and Finance Companies 1993; this law was substantially amended following Liechtenstein's entry into the EEA in 1995, through the Law on Banks and Finance Companies 1998. The Act concerning Banks and Savings Funds 1960 imposes heavy penalties for breaches of professional secrecy. Other recent legislation dealt with due diligence on the part of bankers accepting deposits or assets, installing 'know your customer' rules.

The "know your customer" system is now legally compulsory (from 1 October, 2000) for all banks that belong to the Lichtenstein Bankers' Association. This means that banks in Lichtenstein, previously known as one of Europe's most secretive tax havens, can no longer guarantee anonymity for new and existing account holders, although further account details will remain under normal banking secrecy agreements.

Liechtenstein private banks are able to offer highly tax-efficient asset management services to clients, using one or other of the forms available under the PGR Code, so that income received in Liechtenstein from international assets can be forwarded or reinvested with minimal or no local taxation.

There are a total 16 banks in Liechtenstein, with 12 of them having been granted licences in the last four years alone. Collectively they have some SFr120bn (US$70.3bn) under management (which equates to a staggering SFr3.7m for every man, woman and child in the principality).

'Offshore' ('low tax' would be a better expression) entities are taxed as follows:

Holding and domiciliary companies (often called exempt companies) do not pay profits or property tax; the net worth tax is 0.1% of taxable capital subject to a minimum of SFr 1,000. This tax is payable annually, in advance.

The Establishment (Anstalt) is taxed on the same basis as holding and domiciliary companies, if it has similar types of activity. Stamp duty is reduced to 0.5% for capital exceeding SFr 5m, and 0.3% for capital exceeding SFr 10m.

The Foundation (Stiftung) and the Trust are taxed on the same basis as holding and domiciliary companies, but the rate of tax is 0.075% if capital is between SFr 2m and 10m, and 0.05% if capital is over SFr 10m. Payment to non-resident beneficiaries of a Stiftung or Trust are free of withholding tax. Family foundations pay a reduced rate of stamp duty of 0.2% on their formation capital.

Non-resident companies, which are companies active only outside Liechtenstein, even though they may have a Liechtenstein headquarters (not always easy to distinguish from domiciliary companies) are taxed in the same way as holding and domiciliary companies; income remitted to Liechtenstein may be taxable.-

'Offshore', ie low-tax, activity in Liechtenstein is possible only through the various specialised forms and statuses listed above. Broadly speaking, commercial activity (ie non-investment activity) is not permitted within Liechtenstein to any of the 'offshore' entities.

The 'holding' entity is not limited as to where it holds assets, and can therefore operate within Liechtenstein as long as it sticks to holding activities.

The 'domiciliary' entity is limited to external trading operations, but is permitted certain internal activities.-

The establishment (Anstalt) can operate freely within Liechtenstein on an exempt basis as long as it sticks to (non-commercial) holding and investment-type operations.

The foundation (Stiftung) and the Trust are not limited from a tax point of view as regards holding and investment activities, and can carry these out in Liechtenstein as well as outside.