The concept of "private foundation" was not used until 1926 when Liechtenstein created the "Law of Persons and Companies (Personen und Gesellschaft Recht - PGR), which first established the concept of the "Foundation Family "and "Mixed Foundation". The first is for the benefit of one or more members of a family and the second allows the Foundation to add a capacity of charity for others or charitable individuals.

The foundation, despite having no shareholders or members, is a separate legal entity and is founder of both their rights and obligations. The Liechtenstein foundation can not conduct business for profit, unless they are produced in a manner not usual and serve the purposes stipulated in its founding charter. It is primarily used by the field of wealth management.

Types of Foundations

The Liechtenstein Foundation, offers various forms of incorporation, the most common being the following:

1. The foundation of public interest (gemeinnützige Stiftung). Donated equity and its returns are used on targets that benefit the community. May engage in activities such as awareness of art, science or performing charitable work.
2. The religious foundation (Stiftung Kirchliche). Devoted to church purposes.
3. The family foundation (Familienstiftung). It is used for conservation and management of family assets, to ensure the education or child support or other similar activities. Can also be used effectively for succession planning as an alternative to a will. It further distinguishes between pure family foundations (reign), dedicated to the activities described here only, and mixed (gemischte) also can be combined with other relatives for the public interest or ecclesiastical.
4. The foundation of personal care (Personalfürsorgestiftung). Are mainly to administer pension plans in favor, hiring freezes and compensation for loss of life and disability insurance. Usually the capital contribution is made on a shared basis between employee and employer.
5. Investment Foundation (Anlagestiftung), which actually works as a collective investment vehicle. The founder would be a bank or financial institution and the beneficiaries of investors.

Foundation Structure

• The Founder: The person or entity that provides the capital or assets to the foundation and decides to end or purpose of the meeting. Also appointed the founding board members and selects the recipients. There is a possibility that the founder designate a third party, called founder trustee, to be included in their place in the foundation charter. This way you can stay in total anonymity. If you want to maintain control over the foundation, you can do in his role as Kurator or protector.
• Foundation Council: It is the foundation's executive body, equivalent to the board of an offshore company. Is responsible for managing the assets of the foundation and carry out its purpose or purposes. Can consist of one or more natural or legal persons. The law requires that at least one residence in Liechtenstein and has a lawyer, an accountant, an authorized trustee or has a degree in the economic area, recognized by the authorities of the principality. The founder himself, if desired, can also be part of the founding board of the Foundation.
• The representative: By law, all Liechtenstein foundations must have a permanent resident agent in the principality, which then partner with the authorities and to receive notices and official correspondence. Is a figure similar to the registered agent or registered agent, present in other tax havens. Normally, the address of the representative makes both the headquarters, e-mail or virtual office of the foundation.
• Beneficiaries: They are individuals or entities in whose favor the foundation and receive the benefits of it. In the case of family foundations tend to be individuals and to the mixed or public interest can be both individuals and groups or institutions. The founder himself also has the option to designate himself as beneficiary.
• The oversight committee: This body is required for all foundations that carry out commercial activity or whose type statutes allow it. Recall that the Liechtenstein foundations can only be made occasionally and always with the aim of helping their aims. The committee's job is to audit whether the accounts are taken correctly.
• The Protector: Is an optional set to oversee the Foundation Council at the request of the founder. Must ensure that the purposes are faithfully reflected in the foundation charter and bylaws. Monitor the benefits of the foundation are properly transferred to the designated recipients and ensure the administration of property of those beneficiaries who are minors, unable or are missing.

Uses and Benefits

• The process of formation of a Foundation is extremely discreet and both founder and beneficiaries may remain in total anonymity. This feature, along with its separate legal status of the founder, makes a very efficient vehicle for the protection of family assets and tax planning. The property not only stop legally belong to the founder but also its identity can remain hidden.
• To potential creditors or tax authorities find it very difficult if not impossible, to establish a relationship between founding and heritage.
• The foundation can be used to hold bank accounts, which thus become virtually anonymous.
• Liechtenstein foundation is a highly versatile tool for estate planning because it allows a much more regular and detailed efficient than a will, the fate of the estate after the death of the founder. Not only can avoid probate or forced heirship, but also to plan in detail and in total freedom the division of property, both in the choice of beneficiaries and their duration in time.
• Can be used to hold shares in other companies. Thus, if the owner dies, the company could continue operating as it would hold the title to the foundation.

Taxation

Beneficiaries pay no gift tax or inheritance for the goods they receive from the foundation, if not habitually resident in Liechtenstein. It should however be noted that, unless they want to act illegally, they should declare in their respective countries.