Stability & legal certainty
Over the course of the last century, state sovereignty in combination with close ties to the economically successful and politically stable Switzerland as well as integration into the European Union through EEA membership fostered unprecedented economic growth in Liechtenstein and allowed the Principality to become one of the wealthiest and most heavily industrialised nations in the world.
Liechtenstein is a constitutional hereditary monarchy based upon democratic-parliamentary principles. The current head of state Prince Hans-Adam II is the 15th Prince of the House of Liechtenstein. In 2004 he delegated government business to his son, Hereditary Prince Alois. State authority rests upon the Prince and the people. The people elect the Liechtenstein Parliament, the Landtag. The 25 members of parliament form the legislature together with the Prince. In addition, the people can exercise direct democratic rights through initiatives and referendums. The government is the Liechtenstein’s supreme executive organ, and consists of five members.
Liechtenstein has been a member of the European Economic Area (EEA) since 1995. For Liechtenstein-based companies, this ensures unrestricted market access to 31 states and around 500 million people in Europe. The free movement of goods, people, services and capital simplifies business relations with Europe. EEA membership means that the statutory operating conditions in force in Liechtenstein are the same as those in EU countries.
Since 1924, the customs and currency union with Switzerland has secured access to the neighbouring state. The Principality of Liechtenstein is an outstanding location for financial services providers and their clients. They benefit from political continuity and economic stability.
Promotion of innovation
Liechtenstein’s business-friendly company law offers wide-ranging opportunities and remains to this day a role model for other financial centres. In addition to conventional legal forms such as the stock corporation, foundations, protected cell companies or – uniquely in continental Europe – trusts can also be set up. In order to promote innovations, the Liechtenstein Venture Cooperative has also been created, which is specifically aimed at financial market innovations and brings together ideas, work and capital for innovations.
Tax attractiveness for companies
The tax operating conditions for companies are attractive. The flat income tax rate for Liechtenstein companies is 12.5 %. Payment of this flat tax settles all fiscal obligations, for Liechtenstein does not impose capital tax or coupon tax. A distribution surcharge or taxes on dividends, capital and liquidation earnings on shareholdings are also not imposed.
Lowest government expenditure in Europe
In addition, the debt-free Principality stands for a traditionally liberal economic system. The lean state administration is characteristic for Liechtenstein. At just over 20 %, government expenditure is the lowest of all European countries. This is the result inter alia of the efficient public administration, which produces results quickly and unbureaucratically. Analysts at Standard & Poor’s confirm the country’s high attractiveness. They have for years awarded Liechtenstein an AAA rating and underscore the stable outlook.