Path to Incorporate a Joint Stock Company in Liechtenstein - Process Breakdown

Josef Bergt
2023

Introduction

The process of incorporating a joint-stock company (“Aktiengesellschaft” or “AG” in German) in Liechtenstein involves several critical steps, each of which requires careful consideration and preparation. This article aims to provide a comprehensive guide to the process, from the initial stages of planning to the final registration in the Commercial Register (Handelsregister). The steps include the formation of the company name, raising the share capital, drafting the articles of association, deciding whether to waive the audit review, determining the members of the board, the auditor (if the audit review is not waived), and the authorized representatives, as well as setting the signing rights, arranging an appointment with the Office of Justice for the public notarization of the founding act, preparing the registration letter, obtaining any necessary permits, and preparing the documents to be submitted.

Formation of the Company – Firm Name

Joint-stock companies in Liechtenstein have considerable freedom in choosing their company or firm name, subject to a few restrictions. The chosen name must not already be registered in the Commercial Register. The name must include either the full term "Aktiengesellschaft" or the abbreviation "AG" (respectively “Limited” or “Ltd” in English or “Société Anonyme” or “SA” in French). For joint-stock companies that do not operate a commercial business, the corresponding foreign language expressions can also be included in the company name.

In the case of a joint-stock company with variable capital, the addition "with variable share capital" or the German abbreviation “mit variablem Kapital” respectively "mvK" must be included in the company name. Furthermore, the names of individuals can be incorporated into the company name, provided they have a connection with the company. It is possible to formally check availability and eligibility of a company name with the Commercial Register.

Share Capital

The share capital can be raised either in cash or through contributions in kind (also in crypto assets). At least 25% of each share must be paid in cash or covered by the contributions in kind described in more detail in the articles of association. However, this regulation only applies to share capital of over CHF 200’000’00, as the minimum capital of CHF 50’000.00 must be fully paid in any case. If the share capital is contributed in cash, this must be proven by a bank certificate confirming the deposit. In the case of contributions in kind, an expert must report in writing to the founding meeting before the resolution is passed (so-called expert report). Contributions in kind must be fully made within five years of the company's entry in the Commercial Register. The contribution in cash can also be made with EUR or USD 50’000.00.

Articles of Association

The articles of association of the joint-stock company must be signed by all founders and must contain the following information or provisions:

• The company name and the seat;
• The purpose or object;
• The founders;
• The amount of the share capital and the amount of the contributions made thereon, as well as information regarding any non-cash contributions, specifying the name of the contributor, acquisitions in kind with notification of the acquisition price, acceptance of shares or other services in lieu of payment, specifying the number of shares, and precise information about any type of founder benefits;
• If the company has an authorized and/or conditional capital, the amount of the authorized and/or conditional capital;
• The number, nominal value or quota, and type of shares, as well as the rights associated with them;
• The convening of the general meeting, the voting rights of the shareholders, and the resolution;
• The number and the manner of appointment of the members of the administration, representation, supervision, or control, as well as the distribution of responsibility between these bodies (insofar as this does not result from the law);
• The manner of exercising representation;
• The manner in which the company's announcements to shareholders and third parties are made;
• At least an approximate total amount of all costs that the company has to bear on the occasion of its foundation or that are charged to it, even if they arise before the company commences its business activities;
• The balance sheet date.

Certain other provisions or information are only valid if they are provided for in the articles of association. These include, for example, regulations on authorized or conditional capital increases, the restriction of registered shares, restrictions on the voting and representation rights of shareholders. 

Waiver of the Auditor Review

If it is a micro-company that operates a commercial business, the auditor (review) can be waived.

Organization

The members of the administration must be appointed. A member of the administration authorized to manage and represent must meet the requirements according to Art. 180a para. 1, 2, or 3 of the Liechtenstein Persons and Companies Act (“PGR”), provided that the joint-stock company is not subject to the supervision of another authority. An auditor must be appointed for each joint-stock company, unless the auditor (review) is waived and thus the requirement for the auditor is omitted. The auditor is entered in the Commercial Register. Joint-stock companies with bearer shares cannot waive the review.

If bearer shares are issued, a custodian must be appointed who must meet the requirements according to Art. 326b para. 2 PGR. In addition, a representative must be appointed unless a domestic delivery address is specified. Further authorized representatives or authorized signatories can be appointed.

Public Document on the Incorporation

The resolutions on the foundation of a joint-stock company must be taken in a public document: The founders (at least two in number) declare to establish a joint-stock company, establish the articles of association, subscribe to the shares, and appoint the necessary bodies. The publicly notarized founding act must contain at least the following information:

• The founders and possibly their representatives;
• The declaration to establish a joint-stock company;
• The confirmation that the articles of association are established;
• The declaration of each founder about the subscription of their shares, stating the number, nominal value or quota, type, category, and issue amount of the shares, as well as their unconditional obligation to make a deposit corresponding to the issue amount;
• The appointment of the board of directors and possibly further signing and authorized representatives, the representative, and the audit office;
• The manner of exercising representation;
• The finding of the founders that all shares are validly subscribed, the promised deposits correspond to the total issue amount, the legal and statutory requirements for the performance of the deposits are met;
• The naming of the individual documents and the confirmation by the notary that they have been presented to the founders;
• The signature of all founders or their representatives.
• Registration for Entry in the Commercial Register

The registration letter (application) for the entry of a joint-stock company in the Commercial Register must contain the following information:

• The company name, the legal form, and the seat;
• The representation (with address) or the delivery address;
• The amount of the share capital and the amount of the contributions made thereon, as well as the number, nominal value or quota, and type of shares;
• The purpose or object;
• The date of the articles of association;
• The members of the administration or other authorized representatives with name, first name, date of birth, nationality, address, and type of signature; if these are legal entities, the company name, the seat, and the type of signature;
• The auditor with address or the waiver of the audit review;
• The custodian (if bearer shares were issued);
• The balance sheet date;
• The form in which the company's announcements to the shareholders are made, as well as the publication organ;
• Any branch offices.

The signatures on the registration letter must be certified.

Obtaining Necessary Permits

If a commercial business is operated, a trade permit or another special legal permit (for example, from the Financial Market Authority Liechtenstein (FMA) or another authority) is usually required.

Documents to be Submitted

With the application for entry in the Commercial Register, the following documents or evidence must be submitted to the Office of Justice:

• The publicly notarized founding act;
• A copy of the articles of association signed by all founders;
• The bank certificate about the deposit of the legally or statutorily determined deposits on the share capital;
• The declaration of the elected members of the administration and possibly of the custodian, the representation, and the members of the supervisory board, that the election is accepted, if this does not result from the founding act or the registration (if it is a legal entity and its seat is not in the country, a corresponding official commercial register extract must be provided, which may have to be translated);
• The declaration of the auditor that the election is accepted, if this does not result from the founding act; otherwise the declaration that the audit review according to Art. 1058a PGR is waived;
• The declaration of the founders that no contributions in kind, acquisitions in kind, or offsetting were made and no founder benefits or other special benefits were granted, or that no other contributions in kind, acquisitions in kind, or offsetting were made or no other founder benefits or other benefits were granted than those mentioned in the articles of association (in practice, this declaration is made in the founding act);
• The so-called company signature declaration (sample drawing) of the authorized representatives, whereby their (sample) signatures must be certified;
• Any permits, for example, from the Financial Market Authority Liechtenstein (FMA).

In the case of an incorporation with contributions in kind, acquisitions in kind, offsetting facts, or special benefits, the following must also be submitted with the application:

• The complete expert report;
• The contracts for contributions in kind and, if available, the contracts for acquisitions in kind with attachments.

Fees

The fee for the new entry of a joint-stock company is in general CHF 700.00. This fee increases by 0.2 ‰ for the sum that exceeds a share capital of CHF 200’000.00, but at most up to CHF 10’000.00. In addition, fees of CHF 30.00 are charged for each signing authority to be entered and CHF 20.00 for the entry of a function, as well as CHF 30.00 for the representation or delivery address. The fee for the creation of the public document about the foundation is for a joint-stock company:

• With a share capital up to CHF 500’000.00: 1 ‰ of the share capital, but at least CHF 300.00;
• For each further started CHF 100’000.00: CHF 100.00, but at most CHF 15’000.00.

Source: Factsheet AJU/ h80.004.01; Art. 1023 PGR; Art. 1027 PGR; Art. 55 HRV (Liechtenstein Commercial Register Ordinance); Art. 288 PGR; Art. 286b PGR; Art. 279 PGR; Art. 280 PGR; Art. 1058a PGR; Art. 326a et seqq PGR; Art. 239 PGR; Art. 31 HRV; Art. 290 PGR in conjunction with Art. 56 HRV; 

Executive Summary:

• The incorporation of a joint-stock company in Liechtenstein involves several steps, including the formation of the company name, raising the share capital, drafting the articles of association, deciding whether to waive the review, determining the members of the board, the audior, and the authorized representatives, as well as setting the signing rights, arranging an appointment with the Office of Justice for the public notarization of the founding act, preparing the registration letter, obtaining any necessary permits, and preparing the documents to be submitted.
• The company name must not already be registered in the Commercial Register and must include either the full term "Aktiengesellschaft" or the abbreviation "AG" or its English or French equivalent.
• The share capital can be raised either in cash or through contributions in kind with the minimum share capital being CHF/USD/EUR 50’000.
• The articles of association must be signed by all founders and contain specific information or provisions.
• If it is a micro-company that operates a commercial business, the audit review can be waived.
• The members of the administration must be appointed, and a member of the administration authorized to manage and represent must meet the requirements according to Art. 180a para. 1, 2, or 3 PGR.
• The resolutions on the foundation of a joint-stock company must be taken in a public document.
• If a commercial business is operated, a trade permit or another special legal permit is usually required.
• The application for entry in the Commercial Register must be accompanied by specific documents or evidence.
• The fee for the new entry of a joint-stock company is dependent on the share capital but in general is CHF 700.00.