The Liechtenstein dimension

The Anstalt and the domiciliary company

Texon and the Weisscredit establishment in Schaan belonged to a type of entity that Liechtenstein had made available in large numbers since the 1920s. The Persons and Companies Act (Personen- und Gesellschaftsrecht, PGR) of 20 January 1926 offered foreign founders a range of vehicles, among them the Anstalt, the foundation (Stiftung) and the trust enterprise (Treuunternehmen), which could be established quickly, required little capital and needed no activity in the Principality beyond a registered office and a local representative.¹ Combined with low taxation of such domiciliary companies and with a banking and professional secrecy that matched the Swiss model, these vehicles made Liechtenstein a standard component of cross-border structures for clients of Swiss banks. A Swiss bank account held in the name of a Liechtenstein establishment separated the client's name from the account, and the establishment could act as borrower, lender, investor or guarantor without revealing who stood behind it.

The legal attraction of such an entity for a bank's branch in Chiasso lay in its separateness. As a legal person under Liechtenstein law, Texon could take deposits and grant loans without being a bank in Switzerland, since Swiss banking law applied to enterprises active in Switzerland and Texon formally acted from Vaduz. As a foreign non-bank, it was not supervised in Liechtenstein as a bank either. Its accounts were not published, and its auditors, if any, were not Swiss banking auditors. The Federal Banking Commission's description of the Weisscredit establishment applies equally to Texon: a company with a "mere domicile" in Liechtenstein, directed in fact from Switzerland and investing third-party money without published accounts or audit.²

Two establishments compared

The two Liechtenstein entities of 1977 reveal a pattern that the authorities had not addressed before. In both cases a bank in Ticino used a foreign entity to take deposits that it could not or would not take on its own balance sheet. In both cases the entity was controlled in fact by the bank's managers, who were not shown as its owners. In both cases the bank's clients relied on the reputation of the bank, while the bank's supervisors saw nothing of the entity's business. The difference was one of scale and of the guarantor. Weisscredit's establishment had taken in more than CHF 200 million on a capital of CHF 20,000. Texon took in more than a billion francs and was backed by secret guarantees of one of the country's largest banks.³

The lesson the authorities drew was that the separation between a bank and the entities it controls must not be allowed to hide risks or clients. The Federal Banking Commission's later doctrine on consolidated supervision, which requires banks to include in their capital and risk calculations the companies they control in fact, has one of its origins here. In the field of client relations, the due diligence agreement of 1977 required banks to look through domiciliary companies to the person who stood behind the money.⁴

Domiciliary companies in Swiss due diligence today

The modern rules make the point explicit. Under the CDB 08, a domiciliary company was defined as an entity that had no business premises or employees of its own, and the agreement stated that "a domiciliary company cannot itself be the beneficial owner".⁵ The CDB 20 applies the same principle in Article 39. It treats as domiciliary companies all legal entities, companies, establishments, foundations, trusts and similar structures, Swiss or foreign, that do not conduct a commercial or industrial business. Holding companies are excluded from this category, and the commentary of the Swiss Bankers Association adds that a bank which considers an entity with a c/o address to be an operating company must document its reasons.⁶ For an establishment of the Texon type, a bank today must obtain a declaration of the beneficial owner on Form A or, for foundations and trusts, on Forms S and T.

Liechtenstein itself transformed its regime in the decades after Chiasso. It introduced a due diligence law for its financial intermediaries, revised its trust and foundation law, joined the exchange of information in tax matters and, after the international pressure of the 2000s, ended the era in which its domiciliary companies served as anonymous holding vehicles for clients of Swiss banks.⁷ The Anstalt still exists, as does the Liechtenstein foundation, but its beneficial owners are now identified by the Liechtenstein trust company that administers it and recorded in a register of beneficial owners. A structure like Texon could no longer be built with the same opacity on either side of the Rhine.

For the practitioner. Lessons from the Liechtenstein side of the Chiasso case for relationship managers who meet foreign entities today:

• Treat every nonoperating entity as a domiciliary company and obtain Form A, or Form S or T for foundations and trusts.
• Ask who controls the entity in fact, including whether the bank's own staff or introducers hold any function in it.
• Record any guarantee or comfort letter given in the bank's name for an entity's obligations in the bank's central systems.
• Do not accept a lawyer's or trust company's statement that the entity "belongs to nobody".

Notes

1. Personen- und Gesellschaftsrecht (PGR) of 20 January 1926, LGBl. 1926 No. 4, with the Anstalt in Arts 534 ff., the foundation in Arts 552 ff. and the Treuunternehmen in Arts 932a ff. (as later renumbered). ↩
2. EBK, Jahresbericht 1977 (above), 22–23 (Weisscredit establishment with only a shell domicile in Liechtenstein, "faktisch durch den Generaldirektor der Weisscredit von der Schweiz aus geleitet"). ↩
3. EBK, Jahresbericht 1977 (above), 22–24; Pizzigoni, l'Unità, 4 June 1979 (above). ↩
4. EBK, Jahresbericht 1977 (above), 11–12 and 17–18 (consolidation already under study by the Federal Council's study group); today BankA (above), Arts 3b–3h on the supervision of financial groups, with the definition of the financial group in Art. 3c, inserted by Annex No. II 6 of the Insurance Supervision Act of 17 December 2004 and in force since 1 January 2006, https://www.droit-bilingue.ch/de-it/9/95/952.0-3c-13.html. The causal link to Chiasso is the author's assessment. ↩
5. Swiss Bankers Association (SBA), Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence (CDB 08), 7 April 2008, Art. 4, margin nos 38 and 40, English version published at https://www.eda.admin.ch/dam/countries/countries-content/canada/en/20080410-vsb-cwe.pdf. ↩
6. SBA, Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence (CDB 20), 13 June 2018, Art. 39(2), https://www.swissbanking.ch/_Resources/Persistent/6/2/e/e/62eec3df0685e359c5a376dfca79dec8b90 8ea9c/SBA_Agreement_CDB_2020_EN.pdf; SBA, Commentary on the Agreement … (CDB 20), https://www.swissbanking.ch/_Resources/Persistent/a/1/1/5/a115ebc3dc8454f51346c8f1c05d9e81dfcb5 cac/SBA%20_Commentary_on_the_Agreement_on_the_Swiss_banks %27_code_of_conduct_with_regard_to_the_exercise_of_due_diligence_CDB_20_EN.pdf (c/o address; exclusion of holding companies). ↩
7. Liechtenstein's Due Diligence Act (Sorgfaltspflichtgesetz) of 1996, replaced in 2008, the foundation law reform in force on 1 April 2009 and the register of beneficial owners introduced in 2019. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.