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Liechtenstein: Country and Foreign Investment

Business Environment

Liechtenstein offers an extremely stable and efficient business environment with modern infrastructure and excellent telecommunications. There is a wide variety of corporate forms available for most purposes (see Forms of Companies) and the legislative structure is flexible and liberal. Although Liechtenstein is a 'civil code' jurisdiction, legislation has created a trust regime which is widely used.

There are stringent banking and tax secrecy laws. Liechtenstein signed a mutual assistance treaty with the US in July, 2002, but it excluded civil tax matters. In December 2008, however, it was announced that the United States and Liechtenstein had signed an agreement to allow for the exchange of information on tax matters between the two countries. The Tax Information Exchange Agreement (TIEA) between Liechtenstein and the US went into force on December 4, 2009. By June 2011, Liechtenstein had concluded TIEAs with 20 countries, including France, Germany, the Netherlands, Belgium, Luxembourg and the UK.

A double tax treaty with Austria contains provision for exchange of information regarding Austrian commuters working in Liechtenstein (there are some thousands of these). Liechtenstein is a signatory to some international conventions allowing exchange of information in criminal cases. Liechtenstein has also concluded a double tax agreement with Luxembourg.

The dramatic growth of the Liechtenstein economy in the last 50 years has led to the development of very extensive professional and financial services. English is widely spoken in business life, but this is after all a German-speaking country, and that is a factor to be taken into account.

Along with Switzerland, in 2004 Liechtenstein accepted the EU's Savings Tax Directive, and imposed a 15% initial withholding tax on interest and other savings returns paid to citizens of the member states of the EU from 1st July 2005. The 15% rate rose to 20% for three years from July 1, 2008, and will remain at 35% thereafter.

Liechtenstein is a relatively expensive jurisdiction. However taxation is low, even for domestic and resident individuals and companies; and it is lower still for those who are offshore or non-resident.



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