Activity
The activities of STIFA focus on the supervision of common-benefit foundations and establishments as well as private-benefit foundations and establishments that have voluntarily submitted to supervision. Unless the entity is exempted from the obligation to appoint an auditor, STIFA receives an annual audit report on the proper management and use of the assets for its supervisory purposes. These reports are processed by STIFA and, if necessary, regulatory measures are requested from the Court of Justice. In the case of foundations and establishments that are exempt from the obligation to appoint an auditor, STIFA normally carries out audits itself every three years. Furthermore, STIFA’s remit also includes checking the accuracy of the filed notifications of formation and amendments in the event of private-benefit foundations not entered in the Commercial Register.
Supervised entities
| Status at the end of the year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Common-benefit foundations | 1’398 | 1’391 | 1’375 |
| (exempted from the obligation to appoint an auditor) | (102) | (102) | (108) |
| Common-benefit establishments | 8 | 8 | 5 |
| (exempted from the obligation to appoint an auditor) | (0) | (0) | (0) |
| Private-benefit foundations | 31 | 32 | 30 |
| Private-benefit establishments | 20 | 20 | 20 |
| Total new entities under STIFA supervision 1) | 62 | 74 | 62 |
| of which newly set up | 43 | 39 | 50 |
1 These numbers generally include common-benefit and private-benefit foundations and establishments.
Besides the 62 foundations that came under supervision of STIFA in the year under review, 66 foundations were put into liquidation, four foundations were released from the supervision of STIFA and 52 foundations were removed from the Commercial Register. The positive increase in the number of common-benefit foundations, which had started again for the first time in 2022, thus continued in the year under review (increase of 0.5 % compared to the previous year) and the peak number of common-benefit foundations from 2018 (1’392) was even exceeded. It should be noted that although the number of common-benefit foundations dissolved in the year under review increased slightly compared to the previous year, the resulting reduction in the number of common-benefit foundations was compensated by the number of common-benefit foundations that came newly under the supervision of STIFA, which exceeded the number of dissolutions.
Proceedings concerning auditors
| 2024 | 2023 | 2022 | Proceedings to appoint auditors | 86 | 115 | 103 |
|---|---|---|---|
| Proceedings for exemption from the obligation to appoint an auditor | 10 | 6 | 6 |
During the year under review, 86 foundations applied to the Court of Justice for statutory auditors to be appointed. This also includes those proceedings in which an application was made for the replacement or dismissal of auditors. STIFA was a party to each of these proceedings. During the year under review, ten common-benefit foundations applied to STIFA to be exempted from the obligation to appoint an auditor (Art. 552 § 27 Para. 5 PGR).
Audits conducted by the auditors
| Financial year | 2023 | 2022 | 2021 |
|---|---|---|---|
| Objections | 17 | 15 | 15 |
| Referrals | 102 | 123 | 124 |
On 31 December 2024, 83 (in the previous year: 85) audit reports relating to the financial year 2023 were still outstanding. This means the above stated number of objections and referrals relating to the audited 2023 financial year is expected to increase until the reports have been submitted in full.
With regard to the objections raised by auditors relating to the 2023 financial year, it should be noted that these were largely due to improper use of the assets, in particular due to the lack of distributions over a longer period of time. Furthermore, deficiencies in the management of the assets (e.g. disproportionately high costs for the foundation administration, unsecured loans granted, non-compliance with investment regulations, value of investments not verifiable) also led to objections.
With regard to the referrals made by auditors concerning the 2023 financial year, the picture is broadly similar, namely that a large proportion of the matters requiring notification related to deficiencies in distribution practice. A large number of referrals were also made for the purpose of informing STIFA about pending legal proceedings or about an accounting over-indebtness pursuant to Art. 182e and Art. 182f PGR.
STIFA has examined the objections and referrals identified by the auditors and has taken the necessary measures.
Audits conducted by STIFA
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Objections | 3 | 5 | 4 |
| Referrals | 8 | 5 | 7 |
In the case of foundations and establishments that are exempt from the obligation to appoint an auditor (by the end of the year under review: 102), STIFA normally carries out the audit itself every three years. STIFA subjected a total of 26 (in the previous year: 40) common-benefit foundations to an independent audit during the year under review. Furthermore, in the year under review, STIFA carried out a final independent audit of six foundations that were exempt from the obligation to appoint an auditor as a result of a decision to dissolve the foundation, so that these foundations could subsequently be terminated.
On 31 December 2024, 19 regular audits of STIFA were still pending (among other things due to a backlog of audits from 2022 and 2023 and not or not completely received audit documents). This means the above stated number of objections and referrals will increase until the audits of STIFA have been completed in full.
With regard to the objections and referrals ascertained by STIFA, it should be noted that the picture is broadly analogous to the objections and referrals made by the auditors. The findings were mainly made due to the improper use of the assets of the foundation, in particular due to the lack of distributions over a longer period of time, as well as organisational shortcomings (e.g. use of common-benefit foundations as “flow-through foundations”, lack of documentation regarding distributions). In addition, STIFA pointed out disproportionately high costs for the foundation administration in relation to the approved distributions. Furthermore, STIFA revoked the exemption from the duty to appoint an auditor for one foundation, as the conditions for the exemption were no longer met.
STIFA took the necessary measures based on the objections and referrals identified.
Supervisory proceedings and other proceedings
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Supervisory proceedings pursuant to Art. 552 § 29 Para. 3 PGR Application submitted by STIFA |
|||
| Proceedings opened | 17 | 8 | 10 |
| Proceedings concluded | 17 | 11 | 10 |
| Proceedings pending | 4 | 3 | 6 |
| of which pending before appeal | 0 | 0 | 0 |
| Supervisory proceedings pursuant to Art. 552 § 29 Para. 4 PGR Application submitted by foundation participants |
|||
| Proceedings opened | 8 | 7 | 6 |
| Proceedings concluded | 7 | 10 | 2 | Proceedings pending | 7 | 7 | 7 |
| of which pending before appeal | 5 | 2 | 1 |
| Proceedings pursuant to Art. 552 §§ 33 and 34 PGR Change of purpose / change of other content |
|||
| Proceedings opened | 4 | 6 | 11 |
| Proceedings concluded | 7 | 4 | 11 |
| Proceedings pending | 2 | 5 | 1 |
| Referral of matters to the Office of the Public Prosecutor |
2 | 2 | 1 |
| Referral of matters to the Professional Ethics Committee of the Liechtenstein Institute of Professional Trustees and Fiduciaries |
4 | 1 | 0 |
In 17 cases STIFA applied to the Court of Justice for supervisory measures during the year under review (Art. 552 § 29 Para. 3 PGR), which corresponds to more than double the number of proceedings opened compared to the previous year. This is mainly due to a higher number of outstanding audit reports. In addition, in eight instances foundation participants applied to the Court of Justice for supervisory measures to be taken against foundations and establishments subject to STIFA supervision (Art. 552 § 29 Para. 4 PGR). STIFA was a party to each of these cases. With regard to the supervisory legal proceedings initiated by foundation participants, as in previous years, it can generally be said that the number of such proceedings, as well as their scope and complexity, has increased. As a result of the higher number of parties involved and the in some cases very high amount of and extensive assets affected by the proceedings, the legal proceedings are more comprehensive and take longer, which ultimately also places greater demands on STIFA’s resources.
Furthermore, in the year under review STIFA was asked to make statements in four cases on account of its party status in respect of changes to the purpose and other contents of the foundation documents, in particular the organisation, that had been requested at the Court of Justice (Art. 552 §§ 33 and 34 PGR).
In addition, in the year under review, STIFA reported two cases to the Office of the Public Prosecutor on suspicion of criminal offences or the violation of the transitional provisions on foundation law (LGBl. 2008 Nr. 220) and four cases were reported to the Professional Ethics Committee of the Liechtenstein Institute of Professional Trustees and Fiduciaries on suspicion of possible violations of the Code of Professional Conduct.
Audits of formation and amendment notifications
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Audited non-registered foundations | 194 | 173 | 141 | (number of representatives) | (29) | (31) | (26) |
In the case of a total of 29 representatives, the accuracy of the notifications of formation and amendments of private-benefit foundations not entered in the Commercial Register (Art. 552 § 21 PGR) was verified on a random basis during the year under review. In addition, audits were planned for two further representatives in the year under review, but these could not be carried out by 31 December 2024. In the first case, this was due to the fact that it was not possible to carry out the audit due to a lack of the necessary documents, and in the second case due to the fact that the transfer of all mandates was in question due to the representative waiving his licence in accordance with Art. 180a PGR and therefore the audit of the “old” representative was not carried out. However, the intention is to complete the outstanding audits in 2025, meaning that the sample will increase accordingly.
With regard to the total of 194 foundations audited by the end of the year under review, STIFA was informed of the following objections and referrals by the appointed auditors:
- In the case of five foundations, it was found that changes to the information entered in the commercial register had not been notified in due time. As the notifications of the changes have meanwhile been made by the foundations concerned, there was no requirement for STIFA to initiate supervisory measures.
- In the case of three foundations, it was found that there were discrepancies between the foundation documents and the information deposited with the Commercial Register regarding the date of establishment and the purpose. In all cases, STIFA has requested the foundations concerned for their statements or the necessary corrections have already been made in the Commercial Register in the meantime.
- In the case of four foundations, not all notifications or foundation documents could be examined because they were not at the disposal of the representative concerned, for example due to the transfer of a mandate. However, the audit did not reveal any facts that would have led to the conclusion that violations had occurred. In addition, the current status in the Commercial Register is correct.