Liechtenstein data theft could severely damage financial center reputation, expert warns

A significant data breach has compromised Liechtenstein's foundation registry, with hackers stealing 31,000 records. Thomas Sprecher, a foundation expert, warns that this data theft could severely damage the principality's reputation as a financial hub. The stolen information includes names, birth dates, nationalities, and countries of residence of the beneficial owners of foundations and companies registered in Liechtenstein.

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The data theft is likely to damage the reputation of the principality as a financial center very severely.

Liechtenstein established the "Register of Beneficial Owners" in 2021 under international pressure to prevent money laundering and terrorist financing. Similar registers exist in all EU and EEA member states, and Switzerland is set to implement its own transparency register on October 1st, though it will not cover associations and foundations. The stolen data, if made public, would immediately reveal who controls entities within Liechtenstein.

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The register is of great importance to the country. It records all foundations, trust companies, and companies based in the principality.

While the stolen information has not yet been released, Sprecher believes it holds particular interest for tax authorities. He anticipates that the data could expose foundations and their beneficial owners previously unknown to the public or to foreign tax agencies, potentially leading to investigations into undeclared assets. This revelation comes despite Liechtenstein's efforts to improve tax transparency and participate in the automatic exchange of information (AIA).

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The register was introduced under international pressure to prevent money laundering and terrorist financing.

The incident raises concerns not only for Liechtenstein's financial sector but also for Swiss foundations, which Sprecher believes could also be negatively affected. The breach underscores the ongoing challenges in balancing financial privacy with the global demand for transparency in combating financial crime.

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Knowing who can access the assets of a foundation is particularly interesting for tax authorities.