Opening a Liechtenstein holding company bank account: participations and PVS

Exemption for dividends and gains on participations

A Liechtenstein holding company bank account handles the dividends of a company or Anstalt that owns participations and funds its subsidiaries, often in Swiss francs and euros, with a bank in Vaduz. Since the 2011 tax reform, dividends and capital gains on participations are in principle exempt from the holding's profit tax, though restrictions apply to low-taxed foreign subsidiaries earning most of their income from passive assets.

Since the 2011 tax reform, dividends and capital gains on participations are in principle exempt from the holding’s profit tax. Restrictions apply to low-taxed foreign subsidiaries that earn most of their income from passive assets.

The PVS private asset structure regime

An entity that only holds and manages financial assets for a family, without economic activity, can apply for private asset structure status, or PVS. It then pays only the 1,800 franc minimum tax, without ordinary assessment.

Strict conditions for keeping PVS status

A PVS may not advertise, carry out paid active management or freely accept outside investors. Its investors are typically members of one family, and compliance with these limits is monitored by the tax administration.

Group holdings and the 15 percent minimum tax

Liechtenstein has adopted the global minimum tax for groups with consolidated revenue of at least 750 million euros, including a domestic top-up tax. The top holding of such a group can therefore no longer rely on the 12.5 percent rate alone.

No withholding on dividends paid out

On a holding company account, the principality levies no withholding tax on dividends paid to shareholders, including foreign ones. For a French resident, these dividends remain taxable in France, and the France-Liechtenstein tax treaty deals with double taxation.

Local governance and a qualified board member

Like other legal entities, the holding often has a qualified director under Article 180a of the PGR. Decisions genuinely taken in Vaduz and documented in minutes support the company’s tax residence in Liechtenstein.

How LGT Bank reviews a family holding

When a family holding applies for an account, LGT Bank looks at the historical origin of the participations, the role of each family member and the trustee administering the structure. Planned investments and distribution policy are also discussed.

Beneficial owners of holdings and Anstalts

Holdings and Anstalts record their beneficial owners in the register kept since 2021. For an Anstalt, the founder or designated beneficiaries are identified, and the bank checks consistency with the articles and internal by-laws.

Intragroup flows and reference interest rates

For a Liechtenstein holding account, loans between the holding and its subsidiaries must be at arm’s length; the tax administration publishes reference rates each year for related-party loans. The bank may ask for the relevant agreements.

French rules and CRS reporting for the shareholder

A French resident controlling a Liechtenstein holding should consider French rules on low-taxed entities. They report accounts over which they hold signing authority on Form 3916, and the bank reports controlling persons under CRS.

Documents to prepare for a Liechtenstein holding company bank account

Before submitting your request, draw up a clear organisation chart showing the holding, its shareholders and each company it owns, with the percentages held. The bank will rely on this chart to understand the structure, identify the beneficial owners and check that the expected flows match the company’s purpose as stated in its articles.

Next, gather the articles, the commercial register extract, the register of participations, identity documents for the directors and beneficial owners, and the latest accounts of the most important subsidiaries. If the holding was set up recently, prepare a detailed plan of its intended investments, since the absence of a track record forces the bank to rely on your projections.

Finally, document the source of the funds feeding the structure: dividends received, sale proceeds, a family contribution, an inheritance or a shareholder loan. For an intragroup loan, attach the contract and the rate applied. In practice, a complete and consistent file moves faster, although timing depends on the bank and on the complexity of the chart. Keep the same chart for every institution you approach with a holding company account request.

The steps to open a holding company account

The process most often starts with a conversation with the trustee or qualified director, who knows the structure and what the banks in Vaduz expect. They will point you to an institution whose policy fits the profile of your holding. This preliminary exchange avoids a request that would be refused from the outset for commercial policy reasons.

The documentary phase follows. The bank has its forms completed, identifies every related person, screens sanctions lists and analyses the risk linked to the subsidiaries’ countries and the nature of the income. It may ask for written clarifications, or even arrange an interview with the shareholders or the board, in person or remotely.

After the decision, the signatories receive the fee schedule, online banking access and payment arrangements. No bank guarantees an opening in advance: it results from the review of the file. The real timing becomes clear with the institution you select, and it is wise to ask at the start which steps remain and in what order.

Common mistakes with a holding bank account

The most widespread mistake is presenting the holding as a mere shell without explaining what it actually owns. A bank concerned with substance wants to know why the structure exists, which decisions are taken there and by whom. A holding whose role remains vague will be treated with caution and may be sent through additional checks.

Another weakness comes from inconsistencies between the beneficial owner register, the articles and the documents given to the bank. If these sources differ, the file is suspended while the situation is clarified. Have the trustee verify everything, and update the register before you submit the account application.

Also avoid underestimating the tax position of the shareholder or shareholders. Depending on their country of residence, owning the holding may trigger specific reporting and particular taxation of the income it distributes. It is better to obtain written advice from a tax adviser before starting the banking procedure than to discover these points afterwards.

Questions to ask the bank and useful checks

Ask the bank about available currencies, account fees, transfer costs, payment limits and whether cards can be issued to directors. Ask how it handles intragroup flows, what evidence it requires for a dividend received or paid and how often it expects the file to be refreshed once the holding company account is open.

Also ask whether the bank accepts PVS-type structures and on what conditions, since not all of them handle these. A bank that does not usually deal with them will not offer the same service as an institution used to family structures, particularly for securities custody, management mandates and transactions on participations. A holding company account is reviewed again whenever its structure changes.

Finally, check that the institution is supervised by the Liechtenstein financial authority and that your reporting obligations are clear. Automatic exchange under CRS and FATCA covers the holding’s accounts and the people who control it. Independent legal and tax advice remains useful to confirm how the structure is treated in your own country.