Liechtenstein


ESSENTIAL FACTS

LOCATION: 47 16 N, 9 32 E
Liechtenstein is located in Central Europe, between Austria and Switzerland.

POPULATION: 34,247

CURRENCY: Swiss franc (CHF)

LANGUAGE: German (official), there is also an Alemannic dialect. English is spoken in a majority of business dealings.

CLIMATE: Liechtenstein experiences cold, cloudy winters and cloudy, humid, cool summers

EDUCATION: Everyone in Liechtenstein age 10 and over can read and write.

PUBLIC HOLIDAYS: Assumption Day, 15 August

HISTORY AND GOVERNMENT

HISTORY
During its long and colorful history, the Principality of Liechtenstein has at certain points been occupied by the Holy Roman Empire, French and Russian troops, Austria and Switzerland. It remains neutral in all global conflicts and shares close ties with Austria and Switzerland, on its borders.

POLITICAL SYSTEM
Liechtenstein is a constitutional monarchy. Prince Hans Adam II is the chief of state, although Heir Apparent Prince Alois, his son, actually holds executive power. The Head of Government and Deputy Head of Government see to the day to day running of the country. Parliament votes into power the government’s Cabinet.

The legislative branch consists of a unicameral Parliament (Landtag)

JUDICIAL SYSTEM
In the judicial branch there is the Supreme Court (Oberster Gerichtshof) and the Court of Appeal (Obergericht).

COMMERCE AND TRADE

COMMERCIAL ACTIVITY
Agriculture: Wheat, barley, corn, potatoes; livestock, dairy products
Industry: Electronics, metal manufacturing, dental products, ceramics, pharmaceuticals, food products, precision instruments, tourism, optical instruments

TRADE PRACTICES
Exports: Small specialty machinery, connectors for audio and video, parts for motor vehicles, dental products, hardware, prepared foodstuffs, electronic equipment, optical products to Germany, Austria, France, Italy, UK, US, Switzerland
Imports: Agricultural products, raw materials, energy products, machinery, metal goods, textiles, foodstuffs, motor vehicles
Imports - partners from the EU and Switzerland

BANKING, FINANCE AND INVESTMENT

FINANCIAL FACTS
Liechtenstein uses Swiss currency and customs laws. The maximum business tax rate being 20 percent has allowed for small businesses to thrive in Liechtenstein. Almost a third of the country’s revenue comes from the offshore finance sector due to the efficiency and ease of the incorporation process. As a member of the European Economic Area, Liechtenstein is slowly integrating its own economic agenda with that of the greater EU community.

Fiscal year: Calendar year

BANKING
Liechtenstein has some of the most well-established and secure banking secrecy laws in the world. The Financial Market Supervisory Authority oversees the banking and finance sectors and ensures compliance, responsibility among financial institutions in Liechtenstein, and protection of Liechtenstein banking and investment customers.

The banking industry in particular is additionally protected by the Liechtenstein Bankers’ Association, which abides by the Law on Banks and Finance Companies as wel as the Banks and Savings Funds Act. Although 100 percent anonymity is no longer allowed, excellent due diligence requirements at the beginning of a financial relationship with a bank ensures that as many details will remain private as possible.

MEMBERSHIPS
CE, EBRD, EFTA, IAEA, ICCt, ICRM, IFRCS, Interpol, IOC, IPU, ITSO, ITU, OPCW, OSCE, PCA, UN, UNCTAD, UPU, WCL, WIPO, WTO

FOREIGN INVESTMENT
Liechtenstein produces no impediments to foreign investors. Liechtenstein banks cannot be owned by non-nationals. There are real estate restrictions, but they are minimal.

IMMIGRATION

VISAS
For Liechtenstein, all EU immigration laws, rules and regulations apply. Passports are required from all non-EU residents; they only need their national identity card from their own country.

BUSINESS

BUSINESS ENTITIES
A Company can be formed as an AG (Aktiengesellschaft), which is the same as a stock corporation and requires CHF50,000 share capital; Est. (Anstalt), which is limited by shares but does not have to have any members or shareholders, and combines its function with trust-type functions (minimum share capital CHF30,000); or GmbH (Gesellschaft mit beschränkter Haftung), which is the same as an LLC.

While these are the main types of companies that can be formed in Liechtenstein, the government recognizes local establishment of any organization type as long as it is legal in some part of the world. The Anstalt is the most common company formation in Liechtenstein.

When a company is incorporated in Liechtenstein, the Public Registry Office (Affentlichkeitsregisteramt) requires signed bylaws, the company’s name (although there are restrictions as banking and finance cannot be performed by offshore companies in Liechtenstein, nor can the name of the company be too similar or the same as another company already in business; nor can it be offensive; nor can it seem as though the Liechtenstein government has sponsored the company; also, the name of the company should be translated into German as well as its original language), details of the company’s capital, details (names, nationalities, addresses) of all company officers and shareholders, and the details of the Liechtenstein representative on the board.

TRUSTS
A trust is called a Treuhandschaft, and a registered trust is called a Treuunternehmen. A Liechtenstein national must be named in the deed. A physical Liechtenstein address must be posted. However, the beneficiaries’ names do not have to appear on any registered document concerning the trust. The minimum capital required to establish a Liechtenstein trust is CHF30,000.

Foundations (Stiftung) may not take part in any commercial activity and in Liechtenstein is used only as a financial tool for families. The minimum CHF30,000 capital must be deposited into a bank in Liechtenstein and registered as such for the foundation; it can be deposited in any currency but will be reported in and must be equal to CHF30,000.

TAXATION

CORPORATE TAXATION
An AG pays a minimum of CHF1,000 annual tax and a maximum of .1 percent of the corporation’s net value, as well as a 4 percent coupon tax. Est. companies and Stiftungs pay the same as an AG, minus the coupon tax. Withholding tax is due on payments to EU citizens only, and three-quarters of that tax goes to the payer’s home country.

DOUBLE TAXATION
Liechtenstein and Austria have a double tax treaty.