German tax risks drive interest in Liechtenstein family foundations

Significant political and tax risks in Germany are driving wealth protection strategies, according to Kommer. Discussions among Bundestag parties include introducing a wealth tax, abolishing the capital gains tax in favor of income tax, and removing speculation periods for real estate and gold. While 34% of Germans have considered emigrating, genuine emigration is rare due to practical difficulties, and statistics citing 200,000 to 400,000 departures are misleading as they include students and retirees. To mitigate these risks, Kommer suggests family foundations, particularly in Liechtenstein, which are legally separate entities with no owners, thus avoiding German inheritance and potential wealth taxes. He recommends an initial liquid asset contribution of approximately 1.5 million euros for a Liechtenstein foundation. Distributions from such a foundation to German residents are taxed at 26.4% capital gains tax, but this rate drops to zero if the recipient moves to an EU country like Malta. Kommer also warned of political risks in other jurisdictions, such as France’s potential debt restructuring or special taxes on large corporations, and the shift toward "state oligopoly capitalism" in the U.S. under Trump. He asserted that state fiscal distress and populist politics necessitate proactive legal structuring to protect wealth from future tax hikes and political instability.