The parliament of Liechtenstein has approved a reform of the country’s foundations law, to bring it into line with international standards, as part of a modernisation process that will also include a revision of trust law.

The principality’s new foundation law will come into force on 1 April 2009.

"The balanced overall concept of the reform meets international standards without deviating from the Liechtenstein legal tradition, which has always considered the protection of privacy to be a valuable good," the government said in a statement.

The new law differentiates private-use from charitable foundations and imposes more responsibility on the founder. There are also new rules protecting foundation assets and on supervision and governance of foundations.

The non-transferability of the founders’ rights as a further new key feature entails greater legal certainty and clarity.

But the much-criticised “deposited” foundation, for which registration in the Public Registry is not required, has been retained for private-use foundations only as the government says that it serves to protect the confidentiality of the founder if he wants to engage in long-term asset planning in the interest of his family.