Executive Summary
The Principality of Liechtenstein is a landlocked microstate located in Western Europe. Its area is approximately 160 sq km. Liechtenstein is a German speaking country; Vaduz is its capital. Liechtenstein is not a EU member state, but it has joined the European Free Trade Agreement.

Liechtenstein has adopted a parliamentary democracy political model under constitutional monarchy. The Prince has substantial political authority, including veto rights to laws voted by the parliament, calling referendums, proposing new laws, dissolving parliament and representing Liechtenstein at the international level. However, Switzerland represents Liechtenstein in many diplomatic relations. Head of the government, prime minister, is appointed by the prince.

Liechtenstein is a prosperous country, where the number of companies exceeds the number of its citizens, as a result of a relatively low taxation regime and favourable environment for managing business. Financial sector is the solid basis of the state economy. It is a highly industrialized, free market economy country. More than 90% of the energy is imported.

The Swiss Franc (CHF) has been adopted as the national currency.

Liechtenstein is bordered by Switzerland and Austria, and the biggest part of its territory is a mountainous terrain, which makes the country attractive particularly for winter tourism. The Grauspitz is the highest point of the country, which raises at 2,599 metres above the sea level. However, thanks to the predominant  Southern winds, the country has a mild climate. Its landscape is characterized by cultivated fields and small farms.

Map, Flag and Coat of Arm

Types of Company

Limited Liability Company

This company can be incorporated by two or more members, and its minimum capital requirement is of CHF 30,000. Different types of shares can be issued including bearer, registered, preference and voting shares. At least one director, which can be a private person or a corporate entity, should be appointed; there are no secretarial requirements, and a local agent should represent this type of company. Annual accounts have to be audited and filed with the authorities.

Company Limited by Shares
Founders of this company can be distinct from its shareholders, and this structure can be registered as private or public company. Minimum share capital is CHF 50,000. If there is no public subscription, such a company is formed ‘simultaneously’, if general public may subscribe to a company’s shares, it must be formed ‘successively’, first the founders express their intentions and then subscribers proceed with the registration process. Different types of shares can be issued, but all of them must be voting shares. Annual accounts must be audited and submitted to the Registrar.

This type of company has no members or shares. It is often used for ensuring continuity to family assets and is set up by a founder or founders. It is a legal entity which is usually managed by a foundation council and an advisor may be appointed. The foundation is only liable up to its capital or assets. No third party is required to provide additional assets at any time. The duration of a foundation can be unlimited and is defined by each foundation on the individual basis.

Founder’s rights are transferable and they may terminate a Foundation or change its purposes. Beneficiaries need not be registered. Foundation must have non-commercial goals during the whole period of its activities, but it may own companies that conduct commercial activities. Foundations may be created for charitable and religious goals. CHF 30,000 is the minimum capital of a foundation.

This type of company does not have shareholders. It is an autonomous fund which has its beneficiaries. This structure is appropriate to use for holding purposes. Founders and beneficiaries can be distinct. If the capital is not divided in shares, founders’ rights can be easily transferred.

Establishment is similar to Foundation. The minimum capital is CHF 30,000. At least one director should be appointed. In case an Establishment conducts a commercial activity (investment management is not considered as such), audited annual accounts must be filed.

Liechtenstein is a civil law jurisdiction which has adopted common law trust legislation. However, unlike in common low, there is no bar against income accumulation or perpetuities in Liechtenstein.

A written agreement – a trust deed, is created by a settlor and trustees; names of beneficiaries need not be specified.

Trust Enterprise
A settlor establishes a Trust Enterprise by submitting a trust deed to the Registrar. The minimum capital should be CHF 30,000, and it must have an auditor in case a trust enterprise conducts a commercial activity. An active trust is a trust enterprise with a legal personality, while a non-active trust does not have a legal personality. Non-active trusts are often used for holding assets and investment purposes. At least one trustee must be a resident of Liechtenstein which holds the necessary professional qualifications.


As in most countries, nationality and citizenship do not determine a person’s tax status. A resident of Liechtenstein pays taxes in the jurisdiction on the world-wide income, while non-residents pay taxes only on income derived from activities conducted within Liechtenstein borders.

Dividends, royalties, rentals and interests are exempt from income tax; wealth tax must be paid. Capital gains tax is usually included in income tax or property tax payments. The maximum income tax rate is approximately 18%, and in addition to it, social security contributions are payable. Net worth tax is charged on assets, securities, cash and valuables at a maximum rate of 0.9%. Gift, inheritance and estate taxes rates differ in each particular case. Property profit tax is applied on profits gained from property sale, and its rate is approved by the parliament every year.

Following the example of Switzerland, Liechtenstein has also adopted a EU directive and imposed a withholding tax on interest and other savings profits derived within the country and paid to the EU citizens.

The maximum corporation tax rate is 18-20%. Net worth tax is levied on a resident company’s share capital at a rate of 0.2%. Stamp duty is charged at different rates in different cases. Turnover tax is paid by trading, dealing and broking companies, as well as by those organizations the assets of which include taxable securities valued at more than CHF 10 m. The rate of turnover tax varies between 0.15% and 0.3%.

Corporate entities, as well as private persons, are liable to property profits tax on proceeds of sale of a property in case the received sum of money exceeds invested cost. The standard rate of the VAT is 7.6%, and a reduced rate of 2.4% is applied to food, medicine and printed materials. Exports, medical and educational services as well as most real estate transactions are exempt from the VAT.

Withholding tax at a rate of 4% is applied on dividends or profit shares. This tax is not applied to most inter-company loans.

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