Doing Business In Liechtenstein in 2024: What You Need to Know

Liechtenstein is getting popularity as a favored investment location among European countries. For one thing, it features one of Europe's most stable economies - rating agencies have given it triple-A ratings for numerous years in a row due to economic stability. These triple-A ratings, together with the country's steady economy, have led to a surge in international investment in Liechtenstein. Deciding on which countries to expand your business to can be a complex and difficult decision. As an aspiring entrepreneur, you might have heard of the lucrative business environment of Liechtenstein and might be wondering about the business culture of Liechtenstein. In this article, Tetra Consultants has outlined the important point of consideration with respect to the business environment and the reasons  for doing business in Liechtenstein so that you may better understand this business phenomenon and make a more informed decision. Additionally, we also have outlined the steps to register company in Liechtenstein. 

Doing Business In Liechtenstein in 2023: What you need to know

Favorable business regime

• One of the key reasons that attract international investors is Liechtenstein's advantageous taxation regime. Liechtenstein provides several other advantages to global investors, including a maximum income tax rate of 20% and a bevy of tax and investment treaties. Liechtenstein's corporation tax rate is 12.5%, making it one of the lowest in Europe.
• Additionally, there is no withholding tax on dividends, interest, and royalties and no capital duty or real property tax. Liechtenstein has also considered part of Switzerland for VAT purposes and the standard VAT rate is 7.7% with certain goods and services being subject to a reduced rate of 2.5%.
• Furthermore, many foreign investors are impressed by Liechtenstein's straightforward business registration process. The company incorporation procedure in Liechtenstein is quick and straightforward, requiring you to give the Public Registry information and documentation concerning your new company, as well as a minimum share capital of CHF30,000 for a limited liability company. Tetra Consultants' team of incorporation specialists can complete the registration process of your Liechtenstein entity within 2 weeks. 

Reliable business environment 

• As mentioned above, the lowest company tax rate in Liechtenstein is 12.5% however there are lower rates throughout Europe. This implies that, despite obvious tax advantages, Liechtenstein cannot be termed an offshore country. Liechtenstein businesses are not on any blacklists; they are exceptionally dependable and discreet structures. To establish a company in Liechtenstein, the beneficial owner will require a local director who is licensed to conduct business in the country. The Liechtenstein company registry only registers the data of the local management, which greatly improves the discretion of the firm's owner.

Access to EU market

• Liechtenstein is a member of the European Economic Area (EEA), which comprises European Union (EU) members as well as Iceland, Liechtenstein, and Norway. As a result, Liechtenstein is also a member of the EU's single market, allowing worldwide investors to access the vast EU markets through Liechtenstein.
• Liechtenstein is one of the greatest nations in the world for establishing insurance businesses and investment funds. Despite the fact that Liechtenstein is not a member of the EU, it has negotiated a number of agreements with EU nations that allow investors from the EU to set up enterprises in the investment funds industry in Liechtenstein.

Growing SMEs

• Liechtenstein is a well-developed country. Small and medium-sized companies (SMEs) constitute the economic foundation of Liechtenstein, facilitating its growth. The industrial sector employs around 40% of the workforce, while the manufacturing sector accounts for nearly 40% of the country's gross value added.

Highly reputable financial center: 

• Liechtenstein is a significant European financial hub with a particularly advantageous regulatory system for investment funds. All international businesses who opt to establish a fund in Liechtenstein benefit from the high degree of investor protection. Furthermore, there are numerous legal forms that may be used to create an Alternative Investment Fund (AIF) or Undertakings for Collective Investments in Transferable Securities (UCITS). The licensing procedure for investment funds in Liechtenstein is a simple and straightforward process for UCITS in circumstances where all documentation is provided. For the appropriate compilation of fund documentation, you may depend on the advice given by our licensing experts in Liechtenstein.

• The Financial Market Authority (FMA) is in charge of both supervisory and protective tasks, ensuring market stability while also keeping current market demands in mind. The FMA collaborates with other European supervisory bodies.
• Further, Liechtenstein is a financial hub that can accommodate both traditional and modern business concepts. It is able to target investors from both the EU and Switzerland, which is a significant factor in attracting investors from both countries. The region is tiny yet dense, with significant international ties. The fact that the country has strong financial stability and stable policies further add to the list of benefits for businesses here.

Efficient banking system

• Access to a highly efficient banking infrastructure advantages the Liechtenstein investment fund business. The Principality's banks are among the best-capitalized in the world, and they did not require government aid during the global crisis. The neighboring nations of Switzerland and Austria provide a large part of the well-trained individuals in the local financial services business. The long-standing legacy of Liechtenstein's financial center, as well as its vicinity to the Zürich stock exchange, facilitate the recruitment of highly skilled employees.

Steps to register company in Liechtenstein 

Understanding the incorporation process of a company is imperative to start a business in Liechtenstein: 

Step 1: Choose the form of company structure

• Tetra Consultants will recommend the most suitable form of business structure depending on your intentions and preference.

Step 2: Select the company name:

• To further proceed you need to choose the name for your entity. The name must be approved by the Liechtenstein state register of companies. The name must be unique and contain no geographical names or connections to banking, insurance, or investing services. The company name should end with the appropriate abbreviation depending on the type of ownership.

Step 3: Preparation and collation of the application documents:

A natural person registering a company in Liechtenstein has to submit the following documents:

• Notarized and apostilled passport copies (if you have a domestic and a foreign passport, you will have to make copies of both).
• A recent utility bill or a bank statement to serve as proof of the residential address.
• Police clearance from the company founder’s home country.
• Prospective company By-laws.
• A bank statement confirming the deposit of the registered capital.
• Company officers’ signature samples.
• Application form for company registration in Liechtenstein.

Tetra Consultants' legal team is proficient with the drafting and proper collation of the above-mentioned documents. Once drafted, our team will provide you with the prototypes for your confirmation and modification based on your business activity in the nation. 

Step 5: Open a corporate bank account:

• Prior to registering a company in Liechtenstein, corporate legislation demands the deposition of the registered capital. You will need to have a bank account opened in Liechtenstein or another nation to do so. Ensure consulting with Tetra Consultants' team of banking specialists on corporate bank account opening and deciding on the best international bank account for your business needs in Liechtenstein.

Step 6: Deposit the registered capital:

The registered capital has to be deposited in full. The required amounts depend on the form of company ownership:

• GmbH, Anstalt, Stiftung  - CHF30,000.
• AG - CHF50,000. 

You can use the registered capital as you wish after the company is registered with the State Register.

Step 7: Company registration with the state Register

• Tetra Consultants team will ensure that you fulfill the other regulatory requirements of company incorporation in Liechtenstein. 
• Our team can provide assistance with the provision of a company secretary and local registered address which will be used to keep the official records and register of your entity. 
• With everything in place, Tetra Consultants' team of incorporation specialists will proceed to submit the necessary information and documents to the Liechtenstein Chamber of Industry and Commerce - LIHK for the official registration of your entity.  

Conclusion

Navigating the country of Liechtenstein’s complex business climate as an entrepreneur planning to register a company in the nation might be a challenging process – a hassle to say the least. As such, Tetra Consultants hopes that this article has provided you with a much better understanding of the business culture of Liechtenstein so that you can truly decide whether you should do so yourself. So, what are you waiting for?  Contact us to find out more about the process of starting a business in Liechtenstein, and our dedicated and experienced team will respond within the next 24 hours. Tetra Consultants will not only empower you by helping to navigate the different regulations of Liechtenstein but also aid in facilitating the registration of your company there while providing invaluable, nuanced insights into any potential challenges.