Types of Investment Funds in Liechtenstein
Updated on Thursday 07th December 2017
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As a member state of the European Economic Area (EEA), Liechtenstein has direct access to the European single market. The country adopted the Directives prescribed under the European Union (EU) regulations, including for investment matters. With a competitive economy and a developed financial market, Liechtenstein can be an attractive location for starting an investment project. Investors interested in how to start a fund in Liechtenstein can generally choose between two main categories of funds – undertakings for collective investments in transferable securities (UCITS) and non-UCITS funds, which are described below.
UCITS in Liechtenstein
The legislation on investments in Liechtenstein was modified in 2011, when the local authorities have implemented the Undertakings for Collective Investments in Transferable Securities Act and the Alternative Investment Fund Managers Act, which comply with the EU’s Directive IV on UCITS funds.
The UCITS funds in Liechtenstein have as a main characteristic the investments performed in securities or bonds. Furthermore, these types of funds can also benefit from the EU passport and they can be sold in the EEA region. Investors interested in how to start an investment fund in Liechtenstein must know that the UCITS vehicles should obtain an authorization issued by the Financial Market Authority, which is available at the level of the EEA market.
UCITS in Liechtenstein can be set up under one of the following legal forms:
• contractual investment fund;
• collective trust;
• investment company.
It is necessary to know that the UCITS funds require a management company, which also has to obtain a license from the Financial Market Authority in Liechtenstein.
Non-UCITS funds in Liechtenstein
The non-UCITS funds are regulated by the Law on Investment Companies and they can be set up as one of the following vehicles:
• investment companies for other values;
• investment companies for other values with heightened risk;
• investment funds for qualified investors;
• investment companies for real estate.
Foreign investors can also register a hedge fund startup and can benefit from numerous tax advantages, applicable depending on the type of fund registered here. Our team of partners can offer advice on the local funds and investors can contact our team of affiliates in Liechtenstein for personalized assistance.