This is a non-exhaustive list of the main Liechtenstein statutes affecting offshore and non-resident business. Click on the statute for a fuller description of the statute or the legal regime it forms part of.

Act concerning Banks and Savings Funds 1960
Act Relating to National and Local Taxation 1961
Act on Supervision of the Liechtenstein Financial Market, 2004
Asset Management Act, 2006
Due Diligence Act 2001, Amended 2004
Law Concerning the Trust Enterprise 1928
Law on Banks and Finance Companies 1993
Law on Banks and Finance Companies 1998
Law on International Co-operation in Criminal Matters
Law on Persons and Companies 1926
Law on Value Added Tax 1995
Swiss Federal Law on Stamp Duty 1993

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• a trustee can be an individual or a corporation or association; one trustee must be a Liechtenstein-resident individual with appropriate professional qualifications; trustees have various specified duties of care towards the trustor and the trust property; trustees who carry on business as such must keep an inventory of their trusteeships and must keep each trust's assets separate from other assets; if trust assets are deposited with banks they must again be kept separate;

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

• the trustee must keep a schedule of trust assets and update it yearly, submitting trust accounts as specified in the Trust Deed or to the Court;

• 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; the trustee's creditors have no access to the trust assets; the trustor's creditors have access to trust property only under certain defined circumstances, one of which is under law of succession; the beneficiaries' creditors have access to the trust assets only if the beneficiary has a claim to payment, and if the trust deed does not bar distraint; the trust property's creditors have limited access to the trustee but only to the trust property if the trustee enjoys specific liability cover from the property.

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

Trusts may be set up under foreign law, but may not have more favourable treatment than would apply under Liechtenstein law. A trust under foreign law is a Liechtehnstein Trust and subject to local taxation. Liechtenstein law applies to a foreign trust if the trustee, or more than half of the trustees, are resident in Liechtenstein, if the trust property is in Liechtenstein, or if the Trust Deed says so

In response to its inclusion on the FATF money laundering blacklist in 2000, Leichtenstein enacted new money laundering legislation, including a new regulation in relation to the law on the duty of care, which had been passed by parliament in its September 2000 session and came into force on January 1 2001. The government also abolished the existing privilege of trustees and lawyers by which they did not have to disclose the identity of their clients to banks where funds are invested.

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Banking Law

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 Liechtenstein Bankers' Association. This means that banks in Liechtenstein, 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.

In December, 2000, Liechtenstein signed the United Nations Convention Against Transnational Organised Crime in Palermo, Sicily, to demonstrate the country's commitment to stamping out money laundering. The treaty will go into effect when ratified by at least 40 countries, which the UN expects to happen within two years. The new treaty follows the OECD Fiscal Committee's recommendation that its members ban anonymous accounts and require identification of customers. Under the treaty, countries must also require banks to keep accurate records of accounts and report suspicious transactions. In addition, accounts must be open to inspection by domestic law enforcement officials. Money laundering is criminalised, with sanctions against the people who do the laundering, counsel it, or acquire the ill-gotten gains.

Also in December, Liechtenstein announced that it had issued a new regulation in relation to the law on the duty of care, which had been passed by parliament in its September 2000 session. The revised law on the duty of care and the associated regulation came into force on 1 January 2001.

At a press briefing, Head of Government Mario Frick commented : 'This regulation rounds off legal measures with regard to Liechtenstein's efforts to improve the fight against money laundering and organised crime. The regulation connected to the law on the duty of care is strict, but it can still be implemented. We succeeded in forging a link between high duty of care and liberal economics.'

In April, 2002, Prime Minister, Otmar Hasler announced that more than double the amount of suspected money laundering transactions were reported in 2001 than in the previous year.

The Financial Intelligence Unit attributed the 158 reports received from the banking sector (up from 67 in 2000) to the new tougher controls, rather than to an increase in money laundering activity in the jurisdiction.

Prime Minister Hasler heaped praise on the financial sector and its regulator this week, saying: 'This trend is encouraging and must continue. The financial services industry as a whole has increased its internal compliance measures and is applying them in a targeted manner.'

Despite these encouraging words, however, head of the Financial Intelligence Unit, Michael Lauber, believes that there is still progress to be made. He revealed that despite the increased reporting figures, only 6 of the jurisdiction's 17 registered banks had registered concerns regarding suspicious transactions, and a mere 20 of the country's 645 investment trusts had made reports.

'Does that mean that they have nothing to report, or that they're hiding something?' He speculated. 'That's a question that will be answered in time.'

Late in 2003, Parliament approved the adoption of EU Directive 2001/97/EG, which amends the existing Directive on the prevention of the use of financial systems for money laundering purposes.

Vice Parliamentary President, Peter Wolff complained: "The report and motion of the government doesn't mention that this regulation opens up the issue of fraudulent tax evasion. I gained the impression that the government intends to sweep the critical points in the directive under the carpet."

In August 2004, the Government decided on a total revision of the Due Diligence Act; the revised Due Diligence Act entered into force on 1 January 2005. Prime Minister Otmar Hasler stated: 'In order to enhance the efficiency and attractiveness of the Liechtenstein financial center, due diligence provisions must be further developed and modernized in accordance with the changed European guidelines.'

In addition to implementing the 2nd EU Directive on Money Laundering, the goal of the revision of the Due Diligence Act is to create a modern law that takes into account the newest developments and international standards in the prevention of money laundering, organized crime, and terrorist financing.

'For the benefit of the international community, Liechtenstein has been and continues to be willing to take action against such grave abuses,' Prime Minister Hasler explained. 'Against this backdrop, the Government endeavors to maintain the 'high level of compliance' ascertained by the International Monetary Fund with respect to the suppression of money laundering, organized crime, and financing of terrorism. In the context of international recognition, due diligence legislation will also take into account the 40 revised recommendations and the 8 special recommendations on terrorist financing of the FATF and the recommendations arising from the MONEYVAL and IMF assessments.'