The Place for Setting-Up an Alternative Investment Fund ("AIF")
Liechtenstein, which has been a member of the European Economic Area (EEA) since 1995, has
fully implemented the European directives for UCITS and AIFM at national level; it has done so in its legislation on specific undertakings for collective investment in transferable securities (UCITSG) and on alternative investment fund managers (AIFMG). Liechtenstein funds, their providers and their managers are thus subject to exactly the same requirements at European level in the form of rights and obligations as those in EU member states and other EEA states. This includes restrictions on constitutive documentation, as well as equal participation in the European internal market via passporting. Investors, in turn, enjoy the same regulatory protection in all countries that have signed up to the European AIFM Directive.
The OECD has also been giving Liechtenstein high marks in its country assessments since 2015.
Liechtenstein now has the same rating as Germany, for example, and takes effective action against tax fraud and tax evasion. Liechtenstein also committed to the OECD’s AEOI standard (exchange of certain information on financial accounts in tax matters) back in 2014. Liechtenstein’s AEOI now covers well over 100 countries, including EU member states. Here too, Liechtenstein ensures more tax transparency for foreign investors.
In addition to any legal and fiscal parameters, the Principality of Liechtenstein offers other advantages with significant added value when compared to other EEA member states; especially when it comes to the practical implementation of planned financing structures. In this context, the Liechtenstein Financial Market Authority (“FMA”) deserves special mention, as it distinguishes itself through its highly specific practical knowledge and experience, both in terms of the market as well as in terms of investors and products. In general, the deadlines set for regulatory investigations are also significantly undercut; and this, which creates a high degree of certainty for planning purposes for product suppliers and regulatory authority stakeholders.
The Liechtenstein Investment Fund Association (“LAFV”) should also be cited. This organization was not created just to market Liechtenstein as a fund location, but rather to gather together the interests of market participants and to represent them to regulators and other equivalent protagonists. One helpful example of the usefulness of how useful synergies can be is, without doubt, the standardization constituent documentation, which has led to a significant reduction in costs and effort associated with the design of new financing projects. In addition, the LAFV also acts as a publication body for all investment fund structures in the country, thereby ensuring maximum transparency.
Further advantages can undoubtedly be found in individual structuring options made possible by highly flexible company structures and in extremely uncomplicated access to Swiss investors – to be sure, a unique phenomenon among EEA states. The administrative processing of investment fund structures, their automated unit subscription, and redemption processes, as well as the issuing of custodial share certificates, all of which are based largely on bank-to-bank communication, represent a gain for investors in more than just transparency and security.
Thanks to the above factors and other diverse advantages, Liechtenstein is well equipped to continue to function as one of the most attractive, comprehensively regulated fund centers; as well as leading innovators when it comes to new types of future financing structures.
XOLARIS is now in its eleventh year of existence. Having started as a classic back-office outsourcer based in Constance, we have now developed into an international structuring and fund management platform for real assets, with offices in Liechtenstein, Germany, France, Singapore and Hong Kong.
In this regard, our growth is consistently breaking new ground.
When we made the decision to set up KVG, an independent service, in 2014, many people agreed that there would be no market for this service.
Today, the ManCo market is one of the fastest growing markets. Expansion into Asia in 2018 laid the foundations for internationalisation, which, in the capacity of first foreign market participant, reached another milestone in 2020, with relocation of the holding company to Liechtenstein and acquisition of the AIFM licence. As the next AIFM location, Paris is the logical next step of the XOLARIS Group’s success story.
In this context, it was and is always important to us that we remain true to our roots in the real asset business. We will continue to maintain this focus as we move towards becoming a global real asset investment group.
With our new CI, we want to break new ground in this area. The first edition of Market News as well as our podcasts, constitute another step in the development of the Group.
I would like to take this opportunity to thank all my colleagues, without whose great work the success of XOLARIS would not have been possible.
I hope you like our new format as well. Even so, we are open to suggestions and criticism and look forward to your feedback.