In short: A foundation in Liechtenstein offers high-net-worth individuals asset protection, predictable succession planning, and discretion — but requires at least CHF 30,000 in foundation capital, a Liechtenstein-based trustee on the foundation council, and a clean tax connection back to Germany. Anyone contributing assets from Germany must in particular consider the attribution taxation under Section 15 of the German Foreign Tax Act (AStG), possible gift tax on formation, and ongoing reporting and substance obligations.
Contents
- Advantages of a foundation in Liechtenstein
- How the formation process works
- Costs of setting up a foundation
- What German founders must additionally consider
- Frequently asked questions
For high-net-worth individuals, entrepreneurs, and investors, Liechtenstein offers an attractive option for protecting and strategically passing on their assets. Establishing a foundation in Liechtenstein creates legal advantages, simplifies succession planning, and ensures discretion and limited liability. Anyone instead considering a German foundation or a share gift to avoid German exit tax can find a comparison in our article on avoiding German exit tax.
Advantages of a foundation in Liechtenstein
Asset protection
A Liechtenstein foundation legally separates the contributed assets from the founder. Creditors of the founder generally cannot access the foundation’s assets; the assets are also protected against liability claims from founders and beneficiaries.
Succession planning
The foundation is well suited to succession planning, as the founder can comprehensively determine how and for what purpose the assets will be used after their death. This allows assets to be preserved across generations, and helps avoid inheritance disputes or wasteful handling of the assets.
Tax treatment in Liechtenstein
Liechtenstein offers numerous tax advantages for foundations: there is no inheritance or gift tax, whereas German foundations are subject to the substitute inheritance tax (Erbersatzsteuer) every 30 years. This generally makes a Liechtenstein foundation well suited to long-term wealth planning — although German taxation of the founder personally remains unaffected by this (see below).
Stability & reliability
Liechtenstein is known for its stable legal system and sustainable economic policy. The location offers political and economic protection and a high degree of legal certainty.
Discretion & data protection
Liechtenstein places great importance on protecting the privacy of founders and beneficiaries. There is no general obligation to disclose founders and beneficiaries.
How the formation process works
1. Planning and preparation
The first step is to determine the purpose of the foundation:
- Private purposes: asset protection & succession planning
- Charitable purposes: promotion of education, science, art, or environmental protection
- Mixed purposes: a combination of private and charitable purposes
The foundation council must consist of at least two members. One of them must be a Liechtenstein trustee or an equivalent person.
2. Preparing the formation documents
The foundation deed is the central document and defines the name, purpose, and contributed assets of the foundation. The foundation’s articles of association (Statuten) contain detailed rules on organisation and administration.
3. Depositing the foundation capital
The minimum capital of CHF 30,000 must be paid into a bank account in Liechtenstein before registration. Alternatively, assets in kind such as real estate or securities may be contributed.
4. Entry in the foundation register
The foundation is registered with the Liechtenstein Foundation Supervisory Authority. For private foundations, only limited information is published in order to preserve discretion.
Costs of setting up a foundation
| Item | Cost |
|---|---|
| Total formation costs | CHF 10,000 – 30,000 |
| of which minimum capital | CHF 30,000 |
| of which notary fees | CHF 1,500 – 3,000 |
| of which registration fees | CHF 700 – 1,200 |
| of which advisory fees | CHF 5,000 – 15,000 |
| Ongoing costs per year | CHF 10,000 – 30,000 |
| of which foundation council | CHF 5,000 – 20,000 |
| of which accounting | CHF 2,000 – 10,000 |
What German founders must additionally consider
For founders resident or habitually present in Germany, looking at Liechtenstein law alone is not enough. Three points are particularly important:
- Attribution taxation under Section 15 AStG: The assets and income of a foreign family foundation are generally still personally attributed to the founder (or the beneficiaries) and taxed in Germany. An exception applies via the escape clause of Section 15(6) AStG if the foundation’s seat or management is located in an EU/EEA state and certain evidentiary and control requirements are met.
- Gift tax on establishment: Transferring assets from Germany to a Liechtenstein foundation is generally subject to German gift tax, since for inheritance and gift tax purposes a foundation is treated like an unrelated third party.
- Substance and reporting obligations: A Liechtenstein foundation without genuine local substance and without regard to German reporting obligations (including under the automatic exchange of information) carries significant tax and criminal law risks.
For this reason, the formation of a Liechtenstein foundation by German founders should always be planned together with a tax advisory firm specialising in international tax law. PSK Steuerberatung supports this through its foundation law practice (Germany & Liechtenstein); AK Venture Path additionally supports a parallel corporate structure in the UAE, for example as part of a company formation in Dubai.
Frequently asked questions about foundations in Liechtenstein
What is the minimum capital for a foundation in Liechtenstein? The statutory minimum capital is CHF 30,000 and may be contributed in cash or in the form of assets in kind such as real estate or securities.
Does a Liechtenstein foundation pay no tax in Germany? The foundation itself is taxed in Liechtenstein. For the German founder, however, the attribution taxation under Section 15 AStG regularly applies, meaning that assets and income may continue to be taxable in Germany.
Is gift tax due on formation? When assets are transferred from Germany to a Liechtenstein foundation, German gift tax is generally due, since for inheritance tax purposes the foundation is treated like an unrelated third party.
Must a member of the foundation council be resident in Liechtenstein? Yes. At least one member of the foundation council, which must have at least two members, must be a Liechtenstein trustee or an equivalent person.
Conclusion
The advantages of a foundation in Liechtenstein are wide-ranging and make it possible to manage, protect, and strategically transfer assets efficiently — from tax relief in Liechtenstein to asset protection and succession planning to discretion and flexibility. For German founders, however, such a structure only makes sense if the German rules on attribution taxation, gift tax, and reporting obligations are factored in from the outset.
Legal status as of: 08/2026. Information on Liechtenstein tax rates and fees is provided without guarantee; this article does not replace individual tax advice.
Paul Simon Kasper, Tax Advisor and Foundation Consultant, Owner of PSK Steuerberatung
Paul Simon Kasper advises German clients as a foundation consultant on the formation and tax-compliant structuring of foundations in Germany and Liechtenstein, in particular regarding Section 15 AStG and the escape clause. Learn more about him on LinkedIn and at steuerberatung-psk.com/uber-uns.
