Legal Basis

Core Legislation on Liechtenstein Investment Funds

The new Investment Undertakings Act (IUA) and Investment Undertakings Ordinance (IUO) entered into force on September 1, 2005. These bring the 1996 legislation in line with changes in operating conditions and serve to ratify two EU directives to which Liechtenstein is subject as a member of the European Economic Area (EEA).

Art. 5 and 8	A full prospectus and simplified prospectus must be published for every investment undertaking, allowing the investor to evaluate the envisaged investments in detail, to assess the associated risks and to ascertain the expenses charged to the fund.
Art. 14	Every investment fund must publish an annual and a half-yearly report and is required to submit a quarterly performance report to the Liechtenstein Financial Market Authority (FMA).
Art. 23	Investment Undertakings for Qualified Investors are a special form of Investment Undertakings for Other Assets. As the investors in question (institutional investors and experienced private investors) are assumed to have less need for protection, such funds are exempted from various requirements, including the need to obtain a license from the FMA.
Art. 27	The activities of both the fund and its management company must be audited annually by an audit office recognized by the FMA.
Art. 56	The FMA must decide within 6 months of receiving the application documentation whether to grant a license for the management company to operate.
Art. 57	To keep waiting times to a minimum, the provisions stipulate that permission to market an Investment Undertaking for Transferable Securities must be granted or denied within 6 weeks of receiving all the necessary application documentation.
Art. 58	In the case of Investment Undertakings for Other Assets and Investment Undertakings for Real Estate, the decision to grant or reject a license application must be made within 4 months of receiving all the necessary application documentation.
Art. 59	The net assets of an Investment Undertaking must amount to at least CHF 2 million within 6 months of the granting of a license.
Art. 87 and 88	Investment Undertakings for Transferable Securities under Liechtenstein law may be marketed in any member country of the EEA without need for an additional license ("UCITS passport"), provided the competent authority of the country concerned is notified in advance.