Hortizon B.V. - Country-db, Liechtenstein

The Principality of Liechtenstein was established within the Holy Roman Empire in 1719; it became a sovereign state in 1806. Until the end of World War I, it was closely tied to Austria, but the economic devastation caused by that conflict forced Liechtenstein to enter into a customs and monetary union with Switzerland. Since World War II (in which Liechtenstein remained neutral), the country's low taxes have spurred outstanding economic growth. Shortcomings in banking regulatory oversight resulted in concerns about the use of financial institutions for money laundering. However, Liechtenstein implemented anti-money-laundering legislation over the past several years and a Mutual Legal Assistance Treaty with the US went into effect in 2003.

The Principality of Liechtenstein lies in the region of the Upper Rhine between the Swiss Canton of St. Gall and the Austrian Federal State of Vorarlberg. The topography is mainly mountainous, other than the Rhine Valley, which is the most populated area. The Principality of Liechtenstein has a population of approximately 34,000 people.

The Reigning Prince is Head of State and the Diet (parliament) has 25 elected members who propose the Head of Government, Deputy and 3 Councillors who form the Government and are not members of the Diet. Liechtenstein is a member of the United Nations; the Council of Europe, EFTA and the EEA, and membership of these does not influence local fiscal policy.

The official language of The Principality of Liechtenstein is German, although a dialect is spoken widely. English is also spoken and is used in most commercial transactions and communications. Under the treaty with Switzerland, there are no foreign Exchange Controls. The type of law ic Civil Law based on Swiss and Austrian law with local adaptations.

The Principal Corporate Legalisation is: Personen und Gesellschaftsrecht mit dem Gesetz über das Treuhandunternehmen 1926 (Persons and Companies Law with the Law on Registered Trusts).

Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and living standards on a par with its large European neighbors. The Liechtenstein economy is widely diversified with a large number of small businesses. Low business taxes - the maximum tax rate is 20% - and easy incorporation rules have induced many holding or so-called letter box companies to establish nominal offices in Liechtenstein, providing 30% of state revenues.

The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe.

Company Information

One of the main attractions of Liechtenstein is its extremely flexible company law, which allows for the creation of any type of legal organisation, which is recognised under the law of any jurisdiction in the world. There are three main types of entities in use – the Establishment or Anstalt, the family foundation and the company limited by shares. The most important entity for tax purposes is the Anstalt, which is commonly used by foreign companies as a holding company for overseas subsidiaries. The Anstalt is an entity, which has no members, participants or shareholders but a holder of the founder's rights, and is a hybrid between a company limited by shares and a foundation. It is popular because, with minor exceptions, it is free to conduct all kinds of business, including non-trading activities such as holding passive investments.

Procedure to Incorporate - The procedure for the establishment of Liechtenstein entities follows Civil Law practice. The procedure requires the submission to the Öffentlichkeitsregister (Public Registry) of the following information:

A Liechtenstein body corporate or trust cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes or any other activity that would suggest an association with the Banking or Finance industries, unless a special licence is obtained.

The language of legislation and corporate documents is German, but foreign language translations can be obtained. Entities must appoint a local representative. Owing to the costs associated with incorporation and the paid up share capital requirements, shelf companies are not widely available.

Subject to the proposed name being approved by the Public Registry and the criteria for incorporation has been strictly adhered to, a body corporate or trust can be established in 3-5 working days. There are certain name Restrictions: a name that is identical or similar to an existing name, a major name that is known to exist elsewhere, a name that may imply government patronage, and a name that in the opinion of the Registrar may be considered undesirable. The name of a body corporate or trust entity may use any language using the Latin alphabet, but the Public Registry may require a German translation.

There is no disclosure of beneficial ownership to authorities - None, but the identity of the beneficial owners must be provided to the local representatives/trust management company only.

Compliance

Authorized and Issued Share Capital - The minimum authorised issued and paid up share capital for:

An Aktiengesellschaft may issue registered, bearer, no par value, preference shares and shares with special voting rights. A GmbH, Anstalt, Stiftung and a trust do not have shares. (The founder’s / owner’s rights are expressed in a deed or in by-laws). Bearer shares are permitted for Aktiengesellschaft only.

An Aktiengesellschaft pays a 4% coupon tax on dividends and an annual capital tax of 0,1% on the net asset value of the company. The annual minimum is SFr 1.000. An Anstalt, whether commercial or non-commercial provided the capital has not been divided does not pay a coupon tax, but has to pay an annual capital tax of 0,1% on the net asset value of the company. The annual minimum is SFr 1000. A Stiftung, whether registered or deposited, does not pay a coupon tax, but has to pay an annual capital tax of 0,1% on the net asset value of the company. The annual minimum is SFr 1000. Trusts pay a minimum annual tax of SFr 1000 - or 0,1% on the net asset value. Liechtenstein has only one double tax agreement, which is with Austria.

An Aktiengesellschaft and GmbH are required to submit audited financial statements to the Liechtenstein tax administrator for assessment. A commercial Anstalt is required to submit audited financial statements to the Liechtenstein tax administrator. A non-commercial Anstalt need not submit accounts to the Liechtenstein tax administrator, solely a statement of assets and liabilities has to be drawn up. A Stiftung need not submit accounts to the Liechtenstein tax administrator; solely a statement of assets and liabilities has to be drawn up.

The minimum number of directors for Aktiengesellschaft, GmbH and Anstalt is one. The directors may be natural persons or bodies corporate and can be of any nationality, but at least one director must be a natural person, a resident of Liechtenstein and qualified to act. The Liechtenstein Stiftung does not have a board of directors, but appoints a Foundation Council, who may be natural persons or bodies corporate. They may be of any nationality but at least one member of the Council must be a natural person, a resident of Liechtenstein and qualified to act.

The concept of a company secretary is not recognised in The Principality of Liechtenstein. The minimum number of shareholders/equity participants/ beneficiaries of any Liechtenstein entity is one, except of the GmbH, which requires two.

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Detailed information you can get under the following email-address or you can use our contact form.

Liechtenstein

Key Corporate Features

General Information

Company Information

Compliance