On 1 January 2017, the Liechtenstein reform of the private limited company (Gesellschaft mit beschränkter Haftung; "GmbH") entered into force. While being highly popular in many other European countries, the GmbH in the past led a merely marginal existence in Liechtenstein. The Liechtenstein Government and Legislator decided to change this by substantially enhancing the legal framework for GmbHs in a reform that does not only target SMEs but also start-up ventures and young entrepreneurs. The key features include:

• Simplified formation process: the new law allows the formation of a GmbH by using standard templates provided by the Liechtenstein Office for Justice. Such simplified procedure does not require any public deed and is attractive from a cost perspective. As such, it is interesting for entrepreneurs which prefer a straightforward and simple framework for their GmbH.
• A reduced minimum nominal share capital of CHF10'000. - (previously CHF 30'000. -). The new law also permits to create a GmbH with a (minimal) share capital of EUR 10'000.- or USD 10'000. Unlike in other European countries there is no requirement to increase the nominal capital within a certain time after the GmbH's formation. The nominal share capital can be funded by contributions in kind.
• Abolished subsidiary shareholder liability: under the old law shareholders were liable for the full amount of the nominal share capital if the GmbH could not settle its financial obligations. The new law abolished such shareholder liability. As a consequence, only the GmbH is liable for its obligations.
• Interesting options to restrict the transferability of shares in order to tailor applicable shareholder rules in accordance with individual needs.
• Under the new law the GmbH can no longer issue transferable securities. Due to the limited practical relevance of such issuance in the past, the legislator decided to reserve such possibility to the shareholders of a corporation (Aktiengesellschaft;AG). However, since the conversion of a GmbH into a AG remains possible, the practical disadvantages are mitigated.

Existing GmbH's have a grace period of two years (i.e. until 31 December 2018) to bring their set-up into line with the new law. In a nutshell, Liechtenstein overhauled its former GmbH-rules in a reform that sets the basis to make the GmbH fit for the future.

For further questions, please contact:

Alexander Appel, Walch & Schurti Attorneys-at-Law Ltd.

Mail to:[email protected]; T: 00423 237 20 00