Insights

The private law establishment is very popular due to her flexibility. The establishment in Liechtenstein has no counterparts in other legal systems. The establishment may be structured like a foundation or a corporation. The law defines the establishment as a legally autonomous, organized, permanent undertaking dedicated to economic or other objects and entered in the Commercial Register, which has holdings of material and possibly personal resources.

The Swiss “Aktiengesellschaft” or abbreviated “AG” (in English: “company limited by shares” / “Ltd.”) is the most preferred legal form of a Swiss company.

The Liechtenstein foundation is a legal entity without shareholders. A foundation has beneficiaries who are entitled to enjoy the foundation assets and/or income according to the will of the founder. The Liechtenstein foundation is used for asset protection and estate planning. The Foundation is regulated in art. 522 § 1 – 41 of the Liechtenstein Persons and Companies Act (PGR).

The Swiss “Aktiengesellschaft” or abbreviated “AG” (in English: “company limited by shares” / “Ltd.”) is the most preferred legal form of a Swiss company.

Liechtenstein is the only continental European country where the legal structure of a trust is known. With a trust, the settlor endows trust assets upon the trustee, together with the obligation to manage and use them in his own name and on the behalf of the rules in the trust deed.

The Swiss “Gesellschaft mit beschränkter Haftung” or abbreviated “GmbH” (in English: “limited liability company” / “LLC”) is the second most preferred legal form of a Swiss company. It is usually established in cases where the founders only have access to a limited amount for the company capital.

The new Swiss corporate law will enter into force on January 1st, 2023. The key changes are greater flexibility for share capital and equity distributions, enhancement of shareholders’ rights in terms of better corporate governance and modernization of shareholders’ meetings. The following provides an overview of the main innovations from a practical point of view.

EU Directive 2019/1937 on the protection of persons who report breaches of Union law («Whistleblower Directive») entered into force on 16 December 2019. The Whistleblower Directive is intended to facilitate the disclosure of breaches of EU law and guarantee a uniform, high level of protection for whistleblowers throughout the entire EU. It has far-reaching consequences and is also relevant for Swiss companies with a presence in the EU area.

The Covid-19 pandemic still has a firm grip on the world. Vaccinations are now supposed to protect people from the virus and enable them to return to "normal life" as soon as possible. From a labor law perspective, this raises various questions, such as the subject of mandatory vaccination for company employees or how to deal with the granting of special rights for vaccinated people. As an employer, what should you watch out for in relation to vaccination against the corona virus?

After decades of preparation and time-consuming negotiations, on 19 June 2020, the Federal Parliament finally agreed upon the long-planned reform of the law on companies limited by shares. This revision will come into effect on 1 January 2022. Companies have two years from this date to amend their articles of incorporation accordingly. What are the most important changes to the law on companies limited by shares?

The coronavirus crisis has placed Swiss companies under enormous economic pressure. According to a survey carried out by the Zurich University of Applied Sciences (ZHAW), one in six SMEs currently view bankruptcy as a probable outcome. The term “distressed M&A” is often thrown around in the context of acquisitions of companies with a high illiquidity or over-indebtedness risk, and this is something that many companies and investors view negatively. However, despite risks that are clearly present, a well-timed crisis acquisition or divestment can be advantageous for all parties involved.

Due to the progressive spread of the coronavirus, all schools in Switzerland are now closed. Furthermore, the Federal Council yesterday announced further drastic measures such as the closure of all restaurants, bars, shops and leisure facilities (fitness centres, swimming pools, etc.). In order to support the economy in these difficult times, the Confederation is making up to CHF 10 billion available, among other things, for short-time working compensation. An overview of the most important questions concerning official measures and compensation for short-time work can be found in this overview.

The coronavirus is continuing to spread in Switzerland and Liechtenstein, causing increasing uncertainty among employees and employers and leading to questions such as: Are employees allowed to work from home of their own volition? How about business trips to high-risk areas? The following provides a brief overview of the most important consequences for employment law the virus may entail.

Since the implementation of the rules set out by the Groupe d’action financière (GAFI) in 2015, Swiss law provides for an obligation to notify the purchasers or holders of bearer shares and the beneficial owners of a company. These reporting obligations have recently been tightened. In addition, it has been decided that most companies will no longer be able to issue bearer shares. These new, stricter regulations are in force since 1 November 2019.

In order to combat money laundering and terrorist financing, it was decided - in implementation of the 4th EU Anti-Money Laundering Directive - that a register should be established in Liechtenstein in which legal entities must enter their beneficial owners. The Act on the Register of Beneficial Owners of Domestic Legal Entities (VwEG) entered into force on 1 August 2019. Existing legal entities must report the required data to the Amt für Justiz (Office of Justice) by the end of January 2020 at the latest. New legal entities must have the data entered in the register within 30 days of their registration.

Swiss labor law is in many cases more flexible and liberal than the labor law regulations in other European countries. Liechtenstein has adopted the Swiss regulations on employment contract law (Art. 319 et seq. Swiss Code of Obligations (CO)) practically one-to-one (§ 1173a Art. 1 et seq. Liechtenstein Civil Code (ABGB)). The liberal character of Swiss and Liechtenstein labor law is reflected in particular in the regulations governing the termination of an employment relationship. In practice, however, there are often uncertainties in connection with dismissals. The following summary provides a brief overview of some of the frequently asked questions.