COMPANY PROFILE LIECHTENSTEIN – Annual Company Formation Guide 2018
Currency: Swiss franc (CHF) (CHF)
Time Zone: UTC +1
Phone Code: +423
Formation Cost: depends on the type of entity but usually around USD 6’000 to 8’000
Formation Time: depends on the type of entity and the quality of the KYC information, around 3 to 5 working days
Maintenance cost: depends on the type of entity but standard costs usually
amount to USD 8’000-15’000, exclusive of accounting, auditing, tax and other secretarial and consultation services.
Liechtenstein: A Family Business
Martin Gassner, Trust Officer, ATU, Liechtenstein/Vaduz
The Principality of Liechtenstein is charmingly seated on the slopes of the Rhine Valley, and is well located in the middle of the Alps. Geographically, it is situated between Munich, Germany, on the northern side of the massif and Milan, Italy, on the southern side. In 2017, the Henley & Partners – Kochenov Quality of Nationality Index ranked the country 14th with respect to the general ranking, meaning the country offers an extremely high quality of life.
Liechtenstein is well connected to Europe and the world. It is a member state of the European Free Trade Association, the Organization for Economic Co-operation and Development, and the World Trade Organization. Despite its small size, the country’s GDP per workforce is one of if not the highest in the world, amounting to almost EUR 170’000, which is astounding. In addition, citizens of Liechtenstein currently boast a life expectancy of 82.7 years, among the top 10 globally, meaning there is plenty of time for self-fulfillment.
Most certainly, Liechtenstein is the perfect base for developing your talents and business opportunities. For families, the country offers much comfort, as children can grow up in your choice of the many safe neighborhood options and can attend first-class boarding schools and universities before joining the country’s innovative and global workforce. All this is possible because Liechtenstein’s education system and medical services are excellent. Unflawed social security and assurances accompany you through your life — even at retirement age support is available through a pension scheme that is well funded and secure.
The Principality is a remarkably peaceful and quiet place to make your home. A historical anecdote states that during the German War between Austria and Prussia in 1866, the Liechtenstein battalion placed at the Stilfser Joch Pass in Northern Italy came home with one more soldier than when it left. This was the last deployment and the armed forces have been dissolved, meaning Liechtenstein people do not endure military service. Ever since, Liechtenstein follows a policy of neutrality.
Due to its small size and its already high percentage of foreign inhabitants, Liechtenstein is fairly restrictive when it comes to issuing residence and citizenship permits. The cap for entry allowance is set at 56 persons per year. Half of these persons are drawn by lottery — in order to guarantee equality of success — and the other half is carefully selected by the government. Apart from the European Economic Area (EEA), 16 third country citizens are allowed entry each year as well, with eight selected by lottery and another eight selected on the basis of the needs of the national economy.
With regard to citizenship, Liechtenstein applies birthright, the ius sanguinis. For offspring to acquire Liechtenstein citizenship, either the mother or the father must be a genuine Liechtensteiner. This can be bypassed by marriage or by residence in Liechtenstein for a period of 30 years. With such an arduous requirement, those interested in Liechtenstein citizenship are better off exploring the ordinary procedure, i.e. application with the government. On approval by parliament, the government will submit the application to the ruling prince, who has the casting vote. However, before they can apply at all, interested applicants must undergo the ‘popular vote’, which means the inhabitants of one of Liechtenstein’s eleven villages must agree to your being welcome after a period of 10 years of ordinary residence.
Family Office, Family Affairs
Liechtenstein is a viable option to consider when establishing a family office. The Principality stands out with its superior infrastructure and public services, and is renowned for its political and economic stability. Apart from that, privacy, security, and personal freedom are protected by law. These are essential requisites for a family office wanting to endure for generations.
Liechtenstein is a prime destination for achieving a high — and, more importantly, healthy — standard of living. Residents are given space and perspective to develop their talents and businesses as well as to diversify life and assets; all that you need to ensure unclouded joy of living.
Martin Gassner, Trust Officer
Allgemeines Treuunternehmen ATU
Vaduz, Principality of Liechtenstein
This article has also been published in the Magazine “The Global Citizenship Review – 2nd Quarter 2018”.
Banking, Fund Management, Trading, Financial, Intellectual Property/Licensing, Holding Companies, foundations and trusts
Company limited by shares (Aktiengesellschaft, AG); private limited company (GmbH); establishment (Anstalt); foundation (Stiftung); trust enterprise (trust reg.), partnership.
Capital primary business districts:
Tax Burden - Business: attractive
Corporate income tax at a uniform rate of 12.5% applies to a company’s net income/profit, irrespective of the size of that profit and its distribution. Income and capital gains from participating interests are exempt, and there is no time limit on the use of losses carried forward. Furthermore, an equity capital interest deduction has been introduced. Legal persons not pursuing economic activities can apply to be taxed as Private Asset Structures.
Tax Burden - Individual: moderate, wealth tax applies
Wage tax (from employment): 3 to 24%
Personal income and wealth tax: maximum 8% at country level, however municipalities levy additional tax charges in the amount of 150-200% of the country income and wealth tax rate.
Headline tax rates:
CIT 12.5% (uniform), wage tax (from employment): 3 to 24%, VAT 7.7%
Liechtenstein has Double Taxation Agreements (DTA) with:
Andorra, Bahrain, Germany, Georgia, Guernsey, Hongkong, Iceland, Luxembourg, Malta, Monaco, Austria, San Marino, Switzerland, Singapore, Czech Republic, Hungary, Uruguay, UAE, UK
Liechtenstein has Tax Information Exchange Agreements (TIEA) with:
Andorra, Antigua and Barbuda, Australia, Belgium, China, Denmark, Germany, Faroe, Finland, France, Greenland, India, Ireland, Iceland, Italy, Japan, Canada, Mexico, Monaco, Holland, Norway, Sweden, St. Kitts and Nevis, St. Vincent and Grenadines, South Africa, UK, USA