Benefits of forming a company in Liechtenstein

Liechtenstein is traditionally one of the most discreet and efficient financial centers of Europe. Liechtenstein could preserve its entrepreneurial traditions, but also was among the first low-tax  countries to adopt the international standards on taxation.

The Principality of Liechtenstein is a real mini-state in Central-Europe. It borders the Swiss canton of St. Gallen and the Austrian province of Vorarlberg. Official language is German, although its citizens speak their own dialect. There are 11 municipalities in the country and as its name suggests, Liechtenstein is still a monarchy, the head of the state is Duke Hans-Adam II.

Liechtenstein didn’t become accidentally a decisive entrepreneurial and wealth management center. The financial sector produces the most revenue after the country’s industry. Famous banks are treating 195 billion Swiss francs of clients from all over the world. In addition the principality is a very important center of the insurance, asset and fund management industries as well as the nominee services. About 5,000 people work in the financial services, this is 16% of all workers in the country.

Liechtenstein is member state of the European Economic Association, but not joined the European Union. The country is still tied mostly to Switzerland, its currency is the Swiss franc. Due to the EEA membership the same rules apply to Liechtenstein’s financial market such as to the EU member states. Liechtenstein’s laws guarantee compliance with the highest standards, while the country’s financial industry remains among the most competitive markets.

In Liechtenstein the lowest corporation tax rate is 1,200 francs, there are lower values than this in Europe. It means that despite the clear tax benefits Liechtenstein can not be considered as offshore jurisdiction. The Liechtenstein companies can not be found in any blacklists, these are highly reliable and discreet structures. To form a company in Liechtenstein the beneficial owner will need a local director, who has a licence to carry out its activity. The company registry of Liechtenstein only registers the data of the local manager, it increases enormously the discretion of the owner of the company.

In Liechtenstein companies and limited liability companies are the favourite forms of business for foreigners. Share capital of companies must be at least 50,000 Swiss francs and minimum 20% of the share capital must be paid up. In case of a limited liability company, the share capital must be at least 30,000 Swiss francs. Other popular business form is the foundation, because no registration is required. The ‘Anstalt” is a special enterprise type, which is characteristic only in Liechtenstein. It has no members or shareholders, it is an autonomous fund, commonly used for holding purposes. It is an excellent tool for royalties and real estate investments.

Dividends, commissions, royalties, interests paid by Liechtenstein companies to other countries are completely free from withholding tax.

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