Liechtenstein Family Foundation for German Succession Planning and Asset Protection

05 July 2024

Liechtenstein foundations may offer significant benefits for German residents looking to manage real estate assets effectively and efficiently.

Here are key reasons why they might consider this structure:

Asset Protection

Liechtenstein foundations provide robust asset protection, shielding real estate from personal creditors, legal claims, and family disputes.

This is particularly important for high net worth individuals and business owners who want to secure their assets against potential risks.

  • The foundation’s assets are legally separate from the founder’s personal assets, ensuring they are protected from personal liabilities and claims.
  • Assets held in a Liechtenstein foundation are protected from creditors, ensuring they cannot be seized to satisfy personal debts.
  • In the event of a divorce, assets within a foundation are generally protected from being divided as part of marital property settlements.
  • Foundations help prevent disputes among heirs by clearly defining the distribution of assets, ensuring that the founder’s wishes are respected.
  • The foundation structure allows for high levels of privacy, protecting the founder’s identity and financial information from public disclosure.

Estate Planning

Liechtenstein foundations facilitate structured and efficient estate planning by allowing founders to manage succession planning, ensuring assets are distributed according to their wishes without the complications and high costs associated with probate or other succession laws.

This is particularly advantageous for avoiding German inheritance taxes and streamlining asset transfer processes.


Liechtenstein also offers high levels of confidentiality, allowing founders to keep their identity private and protect their financial privacy. The foundation’s internal structure is not publicly disclosed, providing an additional layer of privacy and security.

Tax Efficiency

In addition, a Liechtenstein foundation offers a favourable tax regime in terms of capital gains tax, corporate income tax and property taxes.

  • Real estate held within a foundation can be sold without incurring capital gains tax, significantly reducing the tax burden.
  • Foundations benefit from a flat income tax rate of 12.5% on net income. Moreover, foreign rental income, including that from German properties, is typically exempt from Liechtenstein’s corporate income tax.
  • Under certain conditions, foundations can also apply for a Private Asset Structure (PAS) status.
  • Unlike other jurisdictions, Liechtenstein does not impose an annual property tax, which can result in substantial savings over time.

Establishing a Liechtenstein foundation (eventually with an underlying operational German entity) for holding German real estate may provide numerous benefits, including enhanced asset protection, tax efficiency and strategic estate planning.

These advantages make it an attractive option for German investors seeking to optimize their real estate holdings and financial strategies.

How ZEDRA can help

ZEDRA can help to set up a foundation in Liechtenstein, provide a local foundation counsel and all the support around Liechtenstein filings and reporting. Whilst we do not provide related tax or legal advice, our private clients benefit from our coordination with advisers in Liechtenstein or in Germany.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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