LIECHTENSTEIN Law and Practice Contributed by: Thomas Plattner and Fabian Jenny, Ospelt & Partner Attorneys at Law Ltd.
6.2 Fiduciary Liabilities Fiduciaries and trustees can be held liable for liabilities of the entity based on civil law. In accordance with the international business judgement rule, trustees are not liable if the entity is administered and managed, namely: • there were no conflicts of interest; • the decision has been made formally and correctly by the responsible body and in compliance with all regulations (eg, approval quorums); and • there is an appropriate information base, which has been evaluated in a proper decision-making process. If these requirements are met, the court will only examine the content of the decision with restraint. Otherwise, the courts will carry out a strict examina - tion of the content of the decision. The most impor - tant requirement is a proper decision-making process based on an adequate information base. Some trustees enter into an indemnity agreement with the ultimate beneficial owner for protection from liabil - ity. Trust deeds often include such clause of indemni - fication, save for fraud and wilful misconduct. In addi - tion, professional liability insurances are also often in place. 6.3 Fiduciary Regulation Liechtenstein law and the Code of Conduct of the Liechtenstein Chamber of Trustees regulate fiduciary investment of assets and encourage fiduciaries to invest prudently. According to the Code of Conduct of the Liechtenstein Chamber of Trustees, the trustees are under an obligation to act prudently. 6.4 Fiduciary Investment Liechtenstein does not recognise a special investment theory or a particular investment standard applied to the fiduciary investment of assets. Prudent invest - ment actions are governed by Liechtenstein laws on banks, asset managers and brokers. Diversification of assets is recommended above a mid-size level of property. However, there is no requirement on fiduciar - ies regarding the investment strategy. Trusts, private foundations or similar entities are authorised to hold active businesses. Trusts are entitled, by virtue of the
entity owning that asset, to effectively run the busi - ness. Conversely, the private foundation is not entitled to run a business. Foundations may serve as passive holding entity. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency No restrictions or qualifications apply to visitors stay - ing for no longer than three months without the inten - tion to work. However, nationals of countries listed in Annex I of Regulation (EU) 2018/1806 are subject to the visa requirement for short-term stays. Residency The government is competent for the granting of resi - dence permits. EEA residents and Swiss citizens are subject to the Act on the Freedom of Movement of Persons (PFZG). Third-country nationals are subject to the Act on Foreigners (AuG). Within the scope of the AuG, permits are granted under consideration of national interest only. Those awarded residence are entitled to family reunions (Article 40 and the following PFZG; Article 32 and the following AuG). Applications for residence permits must be filed with the government and are treated independently. Permits for staying longer than three months are granted very selectively (maximum number defined by law). As many high-net-worth individuals and other private clients or distinguished professionals needed by the industry are favoured by the government, resi - dence permits are usually granted for these categories by the government. and Citizenship Short-Term Stay Notwithstanding the ordinary permit procedures under PFZG (granting of government), residence permits are also issued to EEA nationals by drawing lots. The draw takes place in a two-stage procedure. There are usually two draws per calendar year. Nationality The requirements to be met in order to qualify for nationality are stipulated in the Citizen Act (BüG).
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