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for investment firms. The members of the board of directors may have their domicile outside of Liechtenstein as long as they fulfil the obligations of their functions; they must be duly authorized to fully represent their company.50
The establishment of a branch or subsidiary of a non-EEA bank or investment firm also requires a licence. In addition to satisfying the aforementioned requirements, the institution must be subject to home consolidated supervision comparable to Liechtenstein supervision, and the home authorities must raise no objections. A foreign institution wishing to establish a representation in Liechtenstein requires a licence issued by the FMA; this is granted if it is supervised in its home country (consolidated supervision in the case of a group) in a manner comparable to Liechtenstein supervision, the home supervisory authorities do not object to the presence of the bank in Liechtenstein, and the managers of the representation "guarantee irreproachable business activities". No reciprocity requirements exist. However, according to the authorities, so far no non-EEA bank has requested to establish a branch in Liechtenstein.
Investment firms and undertakings domiciled in an EEA member-state have the right of free movement of services for the activities covered by their home licences; they do not require a Liechtenstein licence. However, their operations in Liechtenstein must be supervised by their home authorities. The same applies to the establishment of branches of EEA financial institutions in Liechtenstein. Suppliers from non-EEA countries must obtain a Liechtenstein licence. The FMA grants the licence if the written application indicates, inter alia, the name of the company in the third State and the name of the appointed bank in Liechtenstein; an up-to-date prospectus and the most recent yearly and half-yearly reports of the investment undertaking must also be submitted. Certification is required from home state authority that the undertaking is subject to consolidated supervision equivalent to Liechtenstein supervision.
Investment undertakings are governed by the Law on investment undertakings (IUG).51 Before initiating business activities, any investment undertaking requires a licence from the FMA. Investment undertakings are divided into investment funds on a contractual basis (which have the legal form of a trusteeship), and investment companies (which have the legal form of a limited company). The minimum required fully paid-up capital is Sw F 1 million. Investment companies must be incorporated as limited liability companies, with fixed or variable capital. Regardless of form, investment undertakings are obliged to have both a board of directors and a custodian bank, which must be registered in Liechtenstein. Furthermore, the principal administration of an investment undertaking must be domiciled in Liechtenstein. The marketing of mutual funds may be undertaken only by banks, fund management companies, or trustees with commercial presence in Liechtenstein. There are no secondary markets or underwritings in Liechtenstein. Liechtenstein banks may participate in secondary markets, however, through their Swiss operations. Units of foreign investment undertakings may be sold in Liechtenstein under licence or, if reciprocity exists, after notification.
The Law on asset management (Asset Management Act, AMA) entered into force on 1 January 2006. This Act lays the foundation for asset management companies as new, internationally recognized, financial intermediaries. The FMA supervises implementation of the Asset Management Act and the related ordinances as well as compliance with regulations, and it takes any necessary measures. The minimum required fully paid-up capital is Sw F 100.000. There were 90 asset management companies in Liechtenstein at the end of 2007.
50 Banks are obliged to adopt a dual management structure, with a board of non-executive directors and a management board; internal auditors, reporting directly to the board of directors, must also be appointed.
51 LLG 2005, No. 156.