An Alternative Investment Fund (AIF) is a type of fund that can invest in other assets than the usual stock, bond, or cash categories. Liechtenstein is a preferred destination for foreign investors seeking to set up AIFs thanks to the favorable legislation.
Below, our company formation agents in Liechtenstein invite you to discover the main requirements for opening an AIF.
Steps to open an AIF in Liechtenstein
The procedure of setting up an investment fund in Liechtenstein is usually the same no matter its type. From this point of view, the main stages are:
- choosing a fund structure;
- registering the investment fund structure;
- appointing an auditor and a depositary (custodian bank);
- obtaining an investment fund license.
Even if these steps are simple, the procedure implies respecting additional regulations in comparison with the process of opening a company in Liechtenstein. For this purpose, it is important to understand the legislation concerning AIFs.
The main laws governing AIFs in Liechtenstein
Investors who want to open Alternative Investment Funds in Liechtenstein must abide by the following laws:
- the Law concerning the Managers of Alternative Investment Funds (AIFMG);
- the Law on the Financial Market Authority;
- the Ordinance on Managers of Alternative Investment Funds (AIFMV).
Apart from these, it is useful to note that even if Liechtenstein is not an EU member state, it has adhered to the most important directives related to AIFs and other types of investment funds.
In order to be considered a Liechtenstein-based fund, the AIF must have its legal seat in the Principality.
Types of AIFs in Liechtenstein
AIFs can be set up as:
- open-ended funds;
- closed-ended funds.
With respect to the legal forms they can take, AIFs may be formed as partnerships referred to as a limited partnership with one unlimited partner or limited partnership without unlimited partners, as a trust or a corporate entity with fixed or variable capital.
You can rely on our company registration agents in Liechtenstein for the incorporation of a legal form for setting up an AIF. The procedure in this case does not differ from that of a commercial enterprise.
Licensing requirements for an AIF in Liechtenstein
An AIF in Liechtenstein must apply for an investment license with the Financial Market Authority. The following information must be included in the license application:
- a business plan with information about the AIF and its location;
- the AIF’s founding documents;
- the certificates attesting to the choice of an auditor and a depository;
- a description of the AIF or the information that is available to investors in the AIF;
- the main AIF’s location in the case of a sub-fund of the AIF.
In order to obtain its license, the AIF must provide the following information:
- if it will invest in liquid investment, its total volume must be at least 70% of the net asset value;
- for non-liquid investments, the fund must pay out at least 70% of the net asset value of its assets;
- it can also combine liquid and non-liquid investments, for which it must have a specific investment policy, which makes it a flexible fund;
- no matter the chosen form, the FMA usually issues the license within 20 days, if the documentation is complete;
- this period of time can be extended to a maximum of 2 months.
Apart from the FMA license, in order to open an AIF in Liechtenstein, the manager must also obtain a specific permit under the AIFM directive.
If you need assistance in creating an Alternative Investment Fund in the Principality, please contact our Liechtenstein company formation consultants.