LIECHTENSTEIN Law and Practice Contributed by: Hannes Arnold, Thomas Nigg, Christina Pointner, Sebastian Auer, Johannes Sander, René Saurer and Marta Baftiaj, Gasser Partner
tial, anti-money laundering, sanctions or real estate rules. With regard to the acquisition of domestic real estate, the express aim of the Real Estate Acquisition Act is that ownership of real estate in Liechtenstein should be distributed in a way which is socially acceptable and consistent with the size of the country. Generally speaking, all transfers of ownership of domestic real estate or economically equivalent rights thereto (hereinafter each a Transfer and collectively Transfers) are within the material scope of the Real Estate Acquisition Act, wherefore an approval by the relevant authority is required. This also includes the acquisition of shares in legal persons or partnerships whose assets consist wholly or predominantly of domestic real estate or equivalent rights. In order for an investor to be granted the authorisation of the transfer, the investor may have to prove that he has a legitimate interest in the transfer. Yet, in principle, a legitimate interest is to be consid - ered apparent if the applicant, in this case the inves - tor, requires business premises for a duly authorised business within Liechtenstein and if it has no other premises available. 2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance Where approval is required, the process depends on the relevant sector or asset. In financial-sector transactions, the investor typically files information on its identity, business, beneficial owners, financial soundness, source of funds and gov - ernance arrangements with the FMA before closing. The FMA then assesses the suitability of the acquirer, the sound and prudent management of the regulated entity and compliance with applicable prudential and anti-money laundering requirements. If the FMA does not object within the assessment period (approxi - mately 60 working days), the acquisition or increase is deemed approved; the FMA may impose conditions and obligations as prerequisites for approval.
For real estate, legal transactions requiring approval must be submitted to the Office of Justice within four months after conclusion. Until approval is granted, the Transfer remains ineffective and becomes void if it is not submitted in time, if approval is finally refused, or if approval is finally revoked. The consequences of non-compliance depend on the applicable regime. In real estate transactions, intentional circumven - tion of the approval requirement may be punished by imprisonment of up to six months or a monetary pen - alty of up to 360 daily rates; negligent conduct may be punished by a fine of up to CHF20,000. In the banking sector, failure to notify, completion dur - ing the assessment period, or completion despite an FMA objection may result in rather high administrative fines; if a qualifying holding is acquired or increased despite an FMA objection, the acquirer’s voting rights may not be exercised, and any vote cast is void. 2.3 Commitments Required From Foreign Investors Since Liechtenstein has no general FDI screening authority, there is no standard set of national security or public interest undertakings imposed on foreign investors as a condition to closing. Commitments arise mainly in regulated sectors and are tailored to the regulatory concern identified by the competent authority. In financial services, com - mitments may relate to governance, capital adequacy, risk management, substance in Liechtenstein, report - ing lines, anti-money laundering controls, etc. In real estate matters, approval may be linked to a legitimate interest and the permitted use of the prop - erty and compliance with land-transfer conditions. 2.4 Right to Appeal A refusal or conditional approval by a Liechtenstein administrative authority may generally be challenged through the applicable administrative appeal route. The precise forum and deadline depend on the respective legal grounds under which the decision was issued and on the form of the decision.
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