Liechtenstein Lawmakers Back Fund Managers Law
Liechtenstein lawmakers have unanimously voted in favour of a bill providing for the creation of a law on alternative investment fund managers (AIFML) during a first reading.
According to the Liechtenstein government, the bill, which presents “an outstanding combination of European Economic Area (EEA) legislative transposition, investor protection and market promotion for the fund industry”, was enthusiastically welcomed by all members of parliament.
The law, described as flexible and modern, is designed to strengthen the fund industry in Liechtenstein and position the jurisdiction internationally as a recognized fund centre, enabling it to generate sustainable growth.
Under the legislation, there will be a limited licensing obligation for small funds, while the so-called business partner model will be created for administrators, risk managers, investment fund distributors and prime brokers.
A wide variety of existing Liechtenstein-based service providers, including trustees, asset managers, auditors, and lawyers, are available for all these activities and the tasks of a depositary, which every AIFM has to appoint for the funds.
The government is expecting international acceptance of the legal framework to boost Liechtenstein's reputation as a business centre and lead to the creation of new jobs.
As a business location, Liechtenstein already offers a wealth of appealing factors when it comes to setting up new businesses, such as legal certainty, EEA membership, links to the Swiss economic area, a high level of expertise in the asset management industry, a supervisory authority which is recognized internationally and in Europe as well as an attractive tax system that complies with international standards.
Commenting on the bill, Liechtenstein’s Prime Minister Klaus Tschütscher said that: “Within the framework of the ongoing project 'Fund Location Liechtenstein' further efforts are to be made to promote the attractiveness of the location and, in particular, to develop and extend its quality.”
Tschütscher added: “Given Liechtenstein's geographical location, there is especially scope for bridge-building with Switzerland, the synergy effects of which could benefit both sides”.
Tschütscher also stated that legislative process had already succeeded in stimulating considerable interest, including some businesses who are seriously thinking about relocating.