Funds
Bender Brother & Co’s experience with alternative assets has allowed its investment office to develop a specialised expertise in the structuring of private label and AIF funds for entrepreneurial families. Private equity, real estate, private debt, infrastructure and hedge funds have grown in popularity with the advantage of being largely uncorrelated to increasingly volatile public markets. ​
​
Since the introduction of the EU AIFM Directive 2013, stringent investor protection rules have all but ruled out reverse solicitation and private placement as acceptable marketing strategies. It is therefore important to approach the European market from a country within the European Economic Area, such as Liechtenstein. The Principality has unique advantages over other European jurisdictions.​
I. EEA and Switzerland
Liechtenstein’s status as an integral part of the European Economic Area affords direct access to the European market as well to neighbouring Switzerland, with which the Principality shares currency and customs arrangements. Recently introduced restrictions on reverse solicitation and private placement have made such privileges particularly valuable for promoters from other parts of the world; such as the United Kingdom, most Commonwealth countries and the United States.
​
II. Security
The Principality benefits from a stable political administration under the guidance of a constitutional monarchy and a sovereign AAA-rated financial infrastructure. As alternative investment funds are required by European law to custodise assets in their country of domicile, Liechtenstein’s robust banking sector provides the highest level of security with respect to counterparty risk.
​
III. Time to Market
Regulatory procedures are efficient which is possible in a country of 40,000 inhabitants whose skills are augmented daily by expertise from Switzerland, Austria and Germany. As the Financial Markets Authority has 20 days by statute to approve a new alternative investment fund, time-to-market is considerably shorter than in other jurisdictions.
​
IV. White-listed Jurisdiciton
Although Liechtenstein may apply corporation tax at 12.5%, there is no stamp duty or levy on dividends, interest and capital gains at the fund level. Moneyval declared Liechtenstein to have shown a ‘substantial level of effectiveness’ in its last assessment. In spite of low levels of taxation and opportunities for corporate structuring, the Principality is considered by the OECD and the European Union to be an onshore white-listed jurisdiction rather than a tax haven.
​
V. Asset Protection against Frivolous Litigation
As Liechtenstein never signed the Lugano Convention on the mutual recognition of civil and commercial judgments, it provides a fund promoter with a high level of protection against frivolous litigation. A plaintiff cannot rely on relief granted in a foreign jurisdiction other than Austria or Switzerland but would need to initiate an entirely new action in the Principality’s Court. This judicial nuance discourages frivolous actions in light of the corresponding additional legal costs.