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Liechtenstein Lawmakers give green light to alternative investment fund managers’ law

March 26, 2013 Comments off

The Liechtenstein parliament has unanimously given the green light to the government’s alternative investment fund managers’ law (AIFMD). According to the Liechtenstein government, parliament’s approval of the law establishes a second legal basis for the Principality’s fund industry, in addition to the law on Undertakings for Collective Investment in Transferable Securities (UCITS).

640px-SchlossvaduzLiechenstein

Vaduz Castle, Liechtenstein   Picture by Michael Gredenberg

The Liechtenstein government highlights the fact that political stability, an attractive tax law, and favorable geographic location in the Swiss franc zone, coupled with membership of the European Economic Area (EEA) enable the Principality to offer unique location advantages. This combination together with other favorable conditions make Liechtenstein an interesting location for managers of alternative investment in the international fund market, the government adds.

The EEA-compliant framework of the law and the market-orientated shaping of national legislation will serve to promote the Liechtenstein fund center as an attractive and competitive location for the international fund industry, the government insists, emphasizing that improved investor protection and strong, internationally networked supervision will also promote the stability of the Liechtenstein fund center as well as confidence in the functioning of the financial market as a whole.

Liechtenstein’s “flexible” law provides for the introduction of the European Union (EU) passport, allowing EU-wide marketing to professional investors, and places greater personal and organisational requirements on managers, their business partners, and the financial market authority (FMA).

Welcoming parliament’s decision, Liechtenstein’s Prime Minister Klaus Tschütscher emphasized the fact that there is a broad consensus among key stakeholders on the common AIFM strategy. Noting that the Principality endeavors to be “interesting for both existing and new customers,” who particularly value stability in times of uncertainty, Tschütscher explained that the AIFMD will further strengthen the Liechtenstein fund center.

Tschütscher predicted that many fund or wealth managers from Austria, Germany, Switzerland and other countries will be interested in Liechtenstein as a location, and that larger wealth managers will also elect to settle in the Principality.

Director of Liechtenstein’s Office of International Financial Affairs Katje Gey underscored that the AIFMD creates a competitive legal basis in accordance with European law, for Liechtenstein as a future-orientated AIFM location. Liechtenstein is the first country in Europe to transpose the lessons from the financial crisis into national law, to prevent as far as possible investor losses and systemic risks arising from inadequate supervision, while at the same time increasing the competitiveness of the fund center, Gey said.

Gey maintained that the further development of the Liechtenstein fund center is one of the central and most promising areas. Gey underscored the attractiveness of the location for managers of alternative investments and stressed the importance of access to innovative products in a structured regulatory framework for existing investors.

The law is due to enter into force on July 22, 2013.

taxmoneyhavens.com

Zug Switzerland a crowded tax haven

August 29, 2011 Comments off

Zug, Switzerland: Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it according to Deborha Ball in Wall Street Journal.

Zug’s history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.

Before Zug became Switzerland’s premier spot for the wealthy and corporations it was known for its picturesque views along the lake of the same name.

ZUG2

ZUG2

Image: Bloomberg News

If  Switzerland is the world’s most famous tax haven, Zug amounts to a haven within a haven. It has the highest concentration of U.S.-dollar millionaires in Switzerland, a country where nearly 10% of households meet that standard, according to Boston Consulting Group. The highest personal income tax anyone in Zug has to pay is 22.9%, and companies pay an average of just 15.4%—rates lower than Switzerland’s average and far below top rates in the U.S.

Thanks in large part to such policies, Zug now boasts the headquarters of big companies ranging from construction firm Foster Wheeler Ltd. to commodities trader Glencore International PLC, and branches of many more. When Transocean Ltd., a drilling contractor known for its tax planning, decided two years ago to move its headquarters from the Cayman Islands and Houston, it picked Zug.

But lately, the place has become something of a victim of its own success. It is grappling with the consequences of the wealth it has attracted, now crowding out the non-rich and squeezing companies looking for space and talent. But when Stefan Hurschler, a man who works with the disabled, and his schoolteacher wife decided to expand their family and wanted a bigger house, they found nothing in Zug they could afford. They moved to Zürich, and Mr. Hurschler now commutes back to the town he grew up in.

“There are older people who still live [in Zug] because they bought their homes in the 1960s,” said his wife, Lilian. “Or there are the very rich. But there isn’t much of a middle class.”  Here is a link to the full story.

www.taxmoneyhavens.com

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