Our Attorney at Law Julian Nigg, specialised in Liechtenstein corporate and foundation law, has co-authored an article with Domenik Vogt (partner at Gasser Partner Rechtsanwälte) on the topic of “Prohibition of the return of capital contributions in Liechtenstein public limited companies”, which was published in June 2025 in issue 2/2025 of the Liechtensteinische Juristen-Zeitung (LJZ).
The publication sets out the key principles and legal stumbling blocks of the prohibition on the return of capital contributions including a description of best practices relating thereto and was already cited by the Liechtenstein Supreme Court just one month after publication (OGH, GE 2025, 123).
The shareholder of a Liechtenstein public limited company is not entitled to reclaim the amount paid in or the contributions in kind either before or upon dissolution of the public limited company. This prohibition of the return of capital contributions in principle includes any financial transaction that leads directly or indirectly to a repayment of capital to the shareholder.
However, the prohibition of the return of capital contributions only applies to the nominal share capital and nominal participation capital. All other parts of the capital (including any share premiums) are not part of the protected share capital. Thus, Liechtenstein’s capital preservation provisions are much more liberal than for example those in neighbouring Austria, where the prohibition of the repayment of capital contributions covers the entire assets of the company and therefore in principle any direct or indirect payment to a shareholder that is not matched by consideration at market or arms length conditions and that economically reduces the assets is prohibited.
In this context it must be noted that in case a financial transaction with the shareholder affects the protected capital, i.e. the nominal share capital, it also in any case does not violate the prohibition of the return of capital contributions under Liechtenstein law if it is carried out at market or arms length conditions.
Violations of the prohibition of the return of capital contributions result in the underlying legal transaction being null and void. However, the company only is entitled to claim repayment if the recipient, i.e. the shareholder or a third party involved in the legal transaction, was demonstrably acting in bad faith at the time of receipt. This is a further significant difference to the neighbouring legal systems of Switzerland and Austria, which do not subject the public limited company’s claim for repayment to the recipient’s bad faith.
Niedermüller Attorneys at Law has an experienced team of specialists in the area of corporate law and regularly advises international clients in connection with corporate law issues and complex cross-border corporate transactions.
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