LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Nicolai Binkert and Alexander Appel, Schurti Partners Attorneys at Law Ltd
on retail lending where the lenders also have to com- ply with additional consumer protection regulations (in particular information duties). 3.11 Disclosure Requirements Liechtenstein law does not stipulate any disclosure requirements when it comes to mere loan agreements. If the financing involves the issuance of bonds or other securities, an issuer domiciled in Liechtenstein would have to comply with the disclosure requirements under the Liechtenstein Disclosure Act ( Offenlegungsgesetz ). The Disclosure Act also applies to financing transac- tions which ultimately result in significant changes of shareholdings in an issuer (eg, due to the enforcement of share pledges in an event of default). Neither principal payments nor interest payments are subject to withholding tax in Liechtenstein. The inter- est payments will have to be taken into account for income tax purposes at the lender’s level. 4.2 Other Taxes, Duties, Charges or Tax Considerations Should a financing or the taking of a security require an increase of share capital of a company and/or the granting of shareholder contributions, capital increas- es and shareholder contributions can be subject to the so-called emission fee ( Emissionsabgabe ) pursu- ant to the Swiss Stamp Duty Act ( Bundesgesetz über die Stempelabgaben ), which also applies to certain Liechtenstein entities. This fee accrues in connection with the issuance and increase of the nominal value of participation rights of and the granting of shareholder contributions without consideration to, among others, companies limited by shares and limited liability com- panies, and amounts to 1% of the increased capital/ contribution. The Swiss Stamp Duty Act provides for some exemptions and a general allowance amounting to CHF1 million. 4. Tax 4.1 Withholding Tax For the sake of completeness, we note that the Swiss Stamp Duty Act also provides for the so-called turn- over tax ( Umsatzabgabe ), which is a type of stamp duty levied on the transfer of ownership in certain
securities, such as shares, bonds, and similar finan- cial instruments, when these transactions involve a securities dealer. 4.3 Foreign Lenders or Non-Money Centre Bank Lenders There are no tax-related concerns with regard to hav- ing foreign lenders and/or non-money centre banks from a Liechtenstein law perspective.
5. Guarantees and Security 5.1 Assets and Forms of Security
The most common security package requested by lenders for corporate borrowing consists of share pledges/security assignments of shares, bank- account pledges, and receivables pledges/security assignments. In some instances, mortgages on Liech- tenstein buildings/real estate are requested. In relation to the particularities and differences between acces- sory and non-accessory collateral, see 5.1 Assets and Forms of Security . Share Interests The most common types of legal entities in Liechten- stein for corporate purposes are the company limited by shares ( Aktiengesellschaft ) and the establishment ( Anstalt ). Security interests over shares in a company limited by shares are most commonly created in the form of a pledge (but can also be created in the form of a security assignment). The pledge is established under a share pledge agreement and perfected by carrying out certain perfection requirements. The perfection requirements as well as the form require- ments depend on whether and, if applicable, in what form the shares are securitised. For perfection and form requirements, the most common type of shares, namely registered shares ( Namenaktien ), are pledged as follows: (i) if physical share certificates have been issued, the pledge is perfected by handing over the physical share certificate to the pledgee with a blank endorsement and registering the pledge in the share register of the company. In these cases, the share pledge agreement can be concluded without any for- mal requirements being observed; and (ii) if no physi- cal share certificates have been issued, the pledge is perfected by notifying the company whose shares
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