Private Label Funds in Liechtenstein More Than Just a Niche Market

Private Label Funds have established themselves as a dominant force in Liechtenstein’s financial landscape. These funds constitute around 85% of all managed funds in the principality, showcasing a growing trend. Despite the absence of comprehensive European statistics on new fund establishments, Liechtenstein stands out among its counterparts.

Unique Framework Behind Growth

Liechtenstein’s impressive growth in the private label fund market stems from several factors. Unlike many countries focused on large investment firms, Liechtenstein has cultivated an environment where private label funds can thrive. Rapid approval processes and reduced time-to-market are pivotal, as delays can jeopardize both financial outcomes and available seed capital.

Streamlined Approval Process

• Maximum approval period for UCITS: 10 working days.
• Maximum approval period for Alternative Investment Funds: 20 working days.
• Average actual approval time: 5 working days.

The Financial Market Authority (FMA) of Liechtenstein ensures a thorough review process and accommodates preparatory discussions with fund promoters. This efficiency significantly benefits both the funds’ administration and asset managers.

No Additional Overregulation

As a member of the European Economic Area (EEA), Liechtenstein adheres fully to EU fund regulations. However, it avoids the extra national regulations known as “Goldplating,” reducing bureaucratic hurdles. Moreover, Liechtenstein does not impose taxes on funds, making it a favorable fund domicile.

Benefits of Passporting

Passporting allows funds in Liechtenstein to be marketed EU-wide and managed cross-border. This advantage attracts private label fund providers from well-established financial centers like Luxembourg. Liechtenstein’s appeal is further enhanced by its excellent service and administrative reputation.

Advantages for Swiss Investors

Liechtenstein offers significant tax benefits for Swiss investors. Due to a customs treaty, Liechtenstein funds are treated similarly to domestic products, exempting them from stamp duties on fund share issuance. Operational benefits include minimal travel times, cultural similarities, and no need for physical presence.

David Gamper, the managing director of the LAFV Liechtenstein Investment Fund Association since 2014, plays an instrumental role in this thriving environment. Previously, he held senior roles in Austria, Italy, and Liechtenstein, bringing extensive expertise to the industry.