Implementation and scope

The relevant Liechtenstein law which governs corporate entities is the Persons' and Companies' Act (Personen- und Gesellschaftsrecht “PGR”). Since 1 May 1995, the Principality of Liechtenstein has been a member of the EEA. In light thereof, the Second Company Law Directive of 13 December 1976 as well as Directive 2006/68/EC of 6 September 2006 were implemented into Liechtenstein law.

The Second Company Law Directive generally applies to joint-stock corporations (Aktiengesellschaft; “AG”). Yet, the Liechtenstein legislator has chosen to apply these rules more extensively so that the rules of the Second Company Law Directive also apply to the private limited liability company (Gesellschaft mit beschränkter Haftung; “GmbH”). Some rules are also applicable to the partnership limited by shares (Kommanditaktiengesellschaft; “KGaA”).

This chapter, however, refers only to the joint-stock corporation (AG) and the private limited liability company (GmbH) given that the other abovementioned legal form is not relevant in Liechtenstein legal practice.

Application of Liechtenstein law

The Principality of Liechtenstein follows the so-called “incorporation theory” (Inkorporationstheorie) (cf. LES 2006, 250 et seq.). The relevant provision is Article 232 of the PGR. According thereto, the decisive criterion is the law according to which the legal entity is organised. This law is determined by the law that is declared to be applicable pursuant to the articles of association or in accordance with which the publication or registration requirements were fulfilled. Alternatively and only if the legal entity is threatened with nullity due to the fact that the rules governing the formation of companies of the country of incorporation have not been complied with, the applicable law may be the law of the country in which the legal entity is actually being managed. This is the only exemption in which the “theory of domicile” (Sitztheorie) would be acknowledged in Liechtenstein. In all other instances, the “incorporation theory” applies.