LIECHTENSTEIN Law and Practice Contributed by: Alexander Appel and Hemma Kohlfürst, Schurti Partners Attorneys at Law Ltd
There is currently increased deal activity amongst reg - ulated financial services providers such as insurers, asset managers and fund management companies, and fintech market players. In addition, cross-border transactions often involve holding companies that have their registered seat in Liechtenstein and have been created as holding entities for family-owned large groups of companies, or for industrial undertak - ings.
To the extent that any state-owned or state-controlled companies in Liechtenstein are the target of a corpo - rate transaction, other governmental agencies are in charge of granting the required approval under the pertinent public laws. In some of these cases, political bodies must consent. 2.3 Restrictions on Foreign Investments Basically, there are no restrictions on the acquisition of participations or stakes in a privately held Liech - tenstein company (except for the regulatory approvals noted in 2.2 Primary Regulators ). However, any transfer of ownership in Liechtenstein real estate properties is restricted by law and requires the advance approval of the Office of Justice. This applies not only to the direct transfer of ownership in a real estate property but also to an indirect acqui - sition by way of acquiring shares in a Liechtenstein real estate company. Under the applicable statutory provisions, such transactions are null and void if the required approval from the Office of Justice is not obtained. Consequently, particular focus on these requirements is necessary during the legal due dili - gence phase of a transformation. Further restrictions exist for the acquisition of shares in state-owned or state-controlled Liechtenstein com - panies. Finally, as a result of the conflict between Russia and Ukraine, further sanctions were enacted to restrict investments by certain Russian investors. 2.4 Antitrust Regulations As a member state of the EEA, Liechtenstein is subject to the European antitrust/merger control regime as applicable in the EU/EEA. As a consequence, the per - tinent EU/EEA Regulations and thresholds also apply in relation to Liechtenstein companies, in principle. Liechtenstein does not have any additional national/ domestic antitrust or merger control legislation. 2.5 Labour Law Regulations Liechtenstein labour law sets forth certain provisions for the transfer of employees in the event of an asset deal. However, these provisions are not applicable regarding share deals.
2. Overview of Regulatory Field 2.1 Acquiring a Company
Typically, an acquisition of a Liechtenstein company is made by way of share purchase. However, there are also other transaction types that can lead to the same result, such as (cross-border) mergers or spin- offs/demergers. Conversely, asset deals are less common in Liech - tenstein, but for the reasons explained have become quite popular with Liechtenstein insurance compa - nies. They are predominantly chosen for transactions in which only a certain part or a business unit of a target company is to be divested. 2.2 Primary Regulators The Liechtenstein Financial Market Authority (FMA – www.fma-li.li) is in charge of deciding on applica - tions for approvals or notifications triggered by M&A transactions involving Liechtenstein licensed financial service providers (banks, insurers, asset managers, etc) as targets. In particular, the FMA must decide on applications to approve new shareholders by way of an extensive “fit and proper test”. In recent years, the FMA’s workload in this area has increased significantly due to the increased number of corporate transac - tions involving regulated entities subject to the FMA’s supervision. To the extent corporate transactions lead to changes in the commercial registry entries of Liechtenstein companies, the Office of Justice is in charge. It is also in charge of granting approvals for the transfer of (direct and indirect) ownership in Liechtenstein real estate properties and so-called real estate companies ( Immobiliengesellschaften ).
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