Doing good sustainably through charitable donations in Liechtenstein – Stories magazine boerse-social.com
Charitable donations are trendy. A philanthropic approach is important to many founders, whether they are companies or private individuals. An acquired asset should benefit society and serve the well-being of people or the (surrounding) world. The establishment of a charitable foundation begins when a founder wishes to add assets for a specific charitable purpose. In many cases, this charitable intention is based on one’s own experiences in life and encompasses a variety of possibilities – for example in the areas of social affairs, education, the environment and culture. Examples of the approximately 1,400 charitable foundations in Liechtenstein are the Hilti Foundation, the Medicor Foundation and the Onassis Foundation, which also invest foundation assets according to sustainability criteria.
Liechtenstein, a foundation location rich in tradition in the heart of Europe
First of all, its legal basis is important for the international acceptance of a foundation location. In Liechtenstein, foundation law from 1926 was comprehensively revised in 2009. Today, together with tax law, it meets all international standards and at the same time guarantees great liberality and the corresponding freedom with regard to the single foundation. The effective supervisory system consists of a two-stage control system, where the foundation supervisory authority (STIFA) is responsible for the supervision of charitable foundations together with a mandatory auditor appointed by the court. With the foundation supervision designed in this way, there is an efficient system in the sense of modern foundation governance, which at the same time guarantees a high level of privacy protection. If there are discrepancies and problematic cases, the decision is ultimately made by independent courts.
The founder gives the direction
When setting up a non-profit foundation, the founder has a great deal of leeway, especially in determining the purpose as well as the administration and use of the assets brought into the foundation. Regarding the activities of the foundation, the composition of your board of trustees and recognition as a non-profit foundation, there are no legal geographical limits. A foundation legally established in Liechtenstein can develop its activities without restrictions from Liechtenstein around the globe. You can operate globally without the obligation to carry out a minimum part of your activities in Liechtenstein.
Trust and sustainability
For the implementation of charitable activities, the philanthropy location offers advantages Liechtenstein and internationally recognized framework conditions. Innovations in asset structuring and unique selling points for charitable activities are unique. These include in particular the segmented association person, the so-called Protected Cell Company (PCC) and the non-profit trust.
The PCC, introduced in 2015, consists of a core and one or more separate segments that can serve different charitable purposes. In contrast to umbrella foundations, there is a real separation of liability between core and segments as well as between the individual segments in the non-profit PCC foundation. In this way, segments – such as small individual foundations – can be separated from one another in terms of liability and capital, even if management is carried out via the core. This is not only particularly cheap and attractive for small fortunes, but the founder can also appear with his name with the segment designation, if he dies.
Another special feature is the legal form of the trust, which was one of the few European countries that introduced it as early as 1926. While the foundation as a legal entity is a legal person that has acting bodies and is itself legally capable, the trust represents a quasi-contractual relationship between the settlor and the trustee, ie the trustee. The same goals can be achieved with the non-profit trust be pursued like with a non-profit foundation. In view of the different forms of supervision, different tax rules and the popularity, especially in the Anglo-Saxon region, the non-profit trust is an interesting alternative to the non-profit foundation.
Moving more together
The Association of Liechtenstein Charitable Foundations and Trusts (VLGST) was founded 11 years ago. It supports its more than 100 members in the work of the foundation and makes a substantial contribution to the future-oriented positioning of the philanthropy location. In addition to the classic forms of endowment and donation, many founders have a new understanding of foundation work. For example, they use sustainable investing to make an impact not only by distributing contributions to charitable projects, but also through their investments.
From “Börse Social Magazine # 59” – 1 year, 12 issues, 77 euros. Approx. 100 pages per month, approx. 1200 A4 pages
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