Doing Business In... 2021

Last Updated July 13, 2021


Law and Practice


Marxer & Partner was founded in 1925 and has 12 partners, a permanent consultant, 12 legal staff, four of counsel and approximately 50 other professionals. For many years, Marxer & Partner has focused its activities on the fields of corporate law, M&A, trust and estate planning, capital markets and tax, and provides in-depth knowledge and advice in these fields to its international client base. The experienced corporate litigation team has successfully represented clients in litigation, and international arbitration proceedings complete the scope of services provided to clients. Many of the firm’s lawyers regularly contribute to international handbooks and other publications, and speak at conferences. The firm represents Liechtenstein exclusively at Lex Mundi, the worldwide association of independent law firms.

Liechtenstein is a civil law jurisdiction with strong historic and present-day ties to the legal systems of Austria and Switzerland. The basic organisation of the judicial order in Liechtenstein consists of three different branches.

First Branch

The first branch is the so-called ordinary jurisdiction, which is responsible for criminal and civil law cases. The respective courts for this branch are the Princely Court (Fürstliches Landgericht; first instance), the Princely High Court (Fürstliches Obergericht; second instance) and the Princely Supreme Court (Fürstlicher Oberster Gerichtshof; third instance).

Second Branch

The second branch is the administrative courts: the individual administrative authorities as the first instance, in some cases an administrative appeals authority as the second instance, and the Administrative Court (Verwaltungsgerichtshof) as the second or third instance, depending on the legal matter at hand.

Third Branch

The third branch is the constitutional jurisdiction, which is exclusively exercised by the Constitutional Court (Staatsgerichtshof) as the sole constitutional court in Liechtenstein.

Under Liechtenstein law, there are no generally applicable regulations, such as foreign investment rules, that would prohibit foreign investments on grounds of national interest in the Principality of Liechtenstein. In principle, foreign investments are not hindered by significant barriers and there are no significant discriminatory effects on foreign investors or foreign-owned investments in Liechtenstein.

However, foreign investments in undertakings operating in regulated sectors might require approval from the respective authority. This includes, for example, banks and investment firms, asset management companies and insurance companies. In particular, investments above a certain threshold may need to be authorised by the authorities.

It is fair to say that Liechtenstein is one of the most attractive countries for foreign investors, due to its stable social and economic order, high degree of political stability and continuity, liberal company and taxation laws, short and flexible decision-making processes, and the strong Swiss Franc as national currency. In its recent biannual review, Standard & Poor's confirmed Liechtenstein's country rating of AAA, which is the best rating possible. It is particularly noteworthy that the outlook remains stable, despite the challenges posed by the COVID-19 pandemic.

The steps for foreign investors to obtain approval depend on the respective regulated sector. The same applies for the consequences of investing in a regulated sector without prior approval; sanctions could range from financial fines up to a forced sale of assets.

The process and timing are straightforward and can be completed within either a few weeks or up to several months, depending on the individual case.

As already stated, there are no general regulations that would prohibit foreign investments on grounds of Liechtenstein's national interests. However, investments above a certain threshold may need to be authorised by the respective authority. In order to ensure the fit and proper management of a bank and investment firm, asset management company or insurance company, the authorities examine the suitability of the (national or foreign) investor on the basis of his or her reliability, reputation and experience, as well as financial soundness.

If the authorities do not authorise a certain investment, there is always the possibility of challenging such decision in court.

Liechtenstein law recognises a large number of different legal forms. The most common types of corporate vehicles are stock companies (Aktiengesellschaft), establishments (Anstalt), foundations (Stiftung) and trusts (Treuhänderschaft).

Stock Company (Aktiengesellschaft – AG)

Due to its international recognition, the stock company is one of the most popular and most common types of legal entity in Liechtenstein.

General meeting of shareholders

The general meeting of shareholders constitutes the supreme corporate body of the stock company. It must be convened at least once a year for the approval of the annual accounts and other duties as laid down in the law and the articles of association. In general, the board of directors is responsible for managing the company's business and representing the company vis-à-vis third parties.


The appointment of an audit authority is a requirement by law as the stock company is obliged to file audited annual accounts. The minimum share capital is CHF50,000, EUR50,000 or USD50,000, which must be fully paid up or contributed upon the formation of the company. The liability of the company is limited to its assets.

The purpose of a stock company can be of an economic or non-economic nature, but it must be lawful and in line with good morals.

Establishment (Anstalt)

The establishment under private law is a flexible legal entity with its own legal personality. The establishment may be designed similar to a foundation or a stock company. An establishment always requires a founder, which can be an individual or a legal entity. At the time of incorporation, the founder contributes the required minimum capital of CHF30,000 to the establishment and, in return, acquires the so-called founder's rights in the establishment.

The bearers of these founder's rights constitute the supreme body of the establishment and therefore determine its destiny. The bearer of the founder's rights may dispose of the founder's rights, with the exception that they cannot be pledged. The transfer of the founder's rights inter vivos takes place by assignment and the transfer mortis causa according to the applicable law of succession.

Board and beneficiaries

Each establishment must have a board of directors. It is initially appointed by the founder and, subsequently, by the bearer of the founder's rights. The board of directors is primarily responsible for the conduct of the establishment's affairs and the representation vis-à-vis third parties.

Furthermore, each establishment must have beneficiaries. By default, the bearer of the founder's rights is assumed to be the beneficiary of the establishment.

Foundation (Stiftung)

A foundation is a legally and economically independent special-purpose fund that is formed as a legal entity through a unilateral declaration of the founder. Therefore, the founder must transfer at least the minimum foundation capital in the amount of CHF30,000 to the foundation. The foundation assets shall only serve to fulfil the purpose for which it has been formed.

A Liechtenstein foundation has full legal capacity and all the rights of a legal person, including the right to own property or to enter into contracts. However, a Liechtenstein foundation is not permitted to run a commercial business.

Anyone can be the founder of a Liechtenstein foundation. It could be one or more natural persons or legal entities, regardless of their place of residence or nationality.


Unlike a corporation, a foundation has no owners or members but does have beneficiaries, who may receive economic benefits pursuant to the provisions of the foundation's statutes and by-laws. The founder may also be a beneficiary of the foundation. The founder is completely free to determine who shall benefit from the foundation's assets.

Other functions

As opposed to other jurisdictions in which foundations (or legal forms similar to foundations) may be used for family purposes only and, thus, have natural persons as beneficiaries only, a Liechtenstein foundation may also be designed to serve as a so-called "enterprise foundation" (Unternehmensstiftung). An enterprise foundation usually holds the majority of the shares in an active business company. The specialty of such enterprise foundation is that its assets shall be used to maintain and support such operational business, as the case may be.

A Liechtenstein enterprise foundation is a highly attractive vehicle to permanently protect and preserve an operating company and to act as a responsible long-term owner.

Trust (Treuhänderschaft)

Liechtenstein is the only continental European country that has codified the legal form of a trust in its Persons' and Companies' Act (PGR). A trust is established when a natural or legal person (settlor) transfers assets (trust property) to the trustee with the provision that the trustee shall hold or make use of the trust property in his own name and as proprietor of the trust property against all others, however, in accordance with the trust instrument and on behalf of one or more third parties (beneficiaries).

As opposed to the stock company, the foundation and the establishment, the trust is not a legal person. In general, the institution of a trust is better known to persons from Anglo-American jurisdictions than, for example, a foundation. In contrast to Anglo-American trust law, however, Liechtenstein law neither prohibits the accumulation of income nor has a rule against perpetuities, thereby allowing the creation of a trust with an unlimited duration.

Creation and beneficiaries

A trust can be created by a written instrument (trust deed) between the settlor and the trustee. The trust deed must always be in writing and determines the trust between the settlor, trustee and beneficiary in the first instance.

The settlor appoints the beneficiaries in the trust deed, for whose benefit the trust property shall be applied. Whilst the settlor may also be a beneficiary, the trustee may not be the sole beneficiary.

Depending on the legal entity, an application or registration must be submitted to the Liechtenstein Trade Register (Hanelsregister), including a variety of different documents. The registration process with the Liechtenstein Trade Register usually takes about one week.

Depending on their legal form, companies operating in Liechtenstein are obliged to provide more or less comprehensive information about their financials and to disclose their annual accounts. Liechtenstein legislation provides for some simplifications for small and medium-sized companies.

If a company is obliged to disclose the annual accounts, the legal representatives must submit the following documents to the Office of Justice:

  • the duly approved (consolidated) annual accounts, consisting of the balance sheet, the income statement and the notes, as the case may be;
  • the auditor's report: the annual financial statements and the consolidated financial statements must be audited by an auditor or an audit company; and
  • a proposal for the appropriation of the result and the decision on its distribution.

The following companies are obliged to disclose their annual financial statements:

  • stock companies (AG);
  • limited liability companies (GmbH);
  • partnerships limited by shares; and
  • Societates Europaeae.

Publication of Disclosure

After the above documents have been filed, the Office of Justice will publish the registration number under which the documents were filed, in the electronic gazette. This is done at the expense of the company.

Companies whose bonds or shares are listed on a stock exchange must also publish the (consolidated) annual accounts in printed form and make them available to the public and to anyone else on request. At present, Liechtenstein does not have a stock exchange and therefore Liechtenstein companies may only be listed on foreign exchanges.

Anyone who violates their disclosure obligations will be fined by the Office of Justice.

The typical management structures of the entities listed under 3.1 Most Common Forms of Legal Entitiesare as follows.

Stock Company (Aktiengesellschaft)

The general meeting of shareholders is the supreme corporate body of a Liechtenstein stock company. The company is managed by a board of directors but may have other appointed corporate bodies, depending on its structure and business model.

Establishment (Anstalt)

As the Liechtenstein establishment under private law is a flexible legal entity, different management structures are possible.

If the respective establishment is designed similar to a stock company and therefore has so-called founder's rights (which closely resemble shares in a stock company), the bearers of these founder's rights constitute the supreme corporate body of the establishment. Similar to a stock company, this type of establishment is managed by a board of directors.

If the respective establishment is designed similarly to a foundation and does not have so-called founder's rights, the establishment is governed by its board of directors, which is bound to the corporate documents, in particular the statutes and by-laws.

Foundation (Stiftung)

A foundation is governed by its foundation council, which is bound to the corporate documents, in particular the statutes and by-laws. The purpose and objects of the foundation are to be observed at all times. The foundation council is the supreme and only compulsory body of a Liechtenstein foundation.

Additional supervisory or executive bodies may be established in the statutes and/or by-laws.

Trust (Treuhänderschaft)

The settlor may appoint one or more natural or legal persons as trustee(s). The trustee as an independent legal owner has an absolute right in rem to the trust property. Their position is bound to the will of the settlor under the trust deed only internally – consequently, the trustee “can” legally do more than they “may”.

The trustee must manage and invest the trust property with the due diligence of a prudent businessperson and in strict accordance with the trust deed. The settlor may additionally appoint a protector to assist and advise the trustee in accordance with the settlor's wishes.

In general, the directors owe their principal duties to the legal entity. Provided they have fulfilled their duties, all members of the board of directors are entitled to be discharged by the supreme corporate body (Article 225 of the PGR).

In some instances, the directors may also be held accountable for their actions towards third parties.

According to Article 220 (6) of the PGR, directors may refuse to follow an instruction given by a superior corporate body if by doing so they would breach their respective duties. In this case, they cannot be held liable for this respective action.


Article 218 et seq of the PGR encompass several provisions revolving around the liability of directors for their actions. The law distinguishes between liabilities to the corporation, to individual members of the corporation, and to third parties. In general, directors are only liable for wilful misconduct or negligence. Nonetheless, the different types of liabilities described often require/allow different degrees of negligence on the part of the director in question.

Generally speaking, directors are liable for the damage caused when they do not live up to their responsibilities as outlined by law or the respective corporate documents (Article 220 (1) of the PGR).

Primarily, the corporation as such is entitled to a claim for damages against the director. If the corporation has no such claim, its members may directly enforce their respective claims for damages (Article 222 of the PGR).

Piercing the Corporate Veil

Liechtenstein law recognises the principle of "piercing the corporate veil" under certain circumstances. The separation principle (Trennungsprinzip) is applicable to Liechtenstein legal entities and leads to a clear legal separation between the foundation and its members/founders. In general, there is a possibility of piercing the corporate veil in case of misuse of the legal entity.

There is no statutory law with regard to this latter possibility. In fact, it is solely based on case law, despite Liechtenstein being a civil law country.


The Liechtenstein courts are very restrictive with regard to piercing the corporate veil in cases of misuse. According to the Liechtenstein Supreme Court, piercing the corporate veil is subject to an objective and a subjective component.

First, the existence of a de facto body is required for piercing the corporate veil due to misuse of the legal entity. A person who exercises control functions without having been formally appointed as a body of the entity is a de facto body (objective element).

Secondly, when forming the respective legal entity, the founder(s) must have had the intention of misusing the legal entity, to act dishonestly, or to act in a way that would damage another person's assets (subjective element) from the outset. However, this latter subjective intention of misuse is extremely difficult to prove, since it requires a retrospective legal analysis.

Liechtenstein employment law is comprised of different tiers of rules and regulations.

The Liechtenstein Civil Code (ABGB) provides for a major part of the codified legal provisions of Liechtenstein employment law.

Apart from the provisions of the ABGB, there are collective employment agreements in different branches and individual employment agreements.

As Liechtenstein is a civil law jurisdiction, case law only plays a subordinate and supporting role in determining the legal content of individual legal provisions.

An individual employment contract can be concluded in writing or orally. However, a written employment contract is strongly recommended in any case: if the contract is only concluded orally, the employer may be obliged to provide the employee with a document setting out the most important working conditions. This document has to contain the following:

  • the employer's personal details, registered office or residence;
  • the date of commencement of work (and the duration of the contract for fixed-term contracts);
  • daily or weekly working hours and rest periods;
  • information about the workplace;
  • information on work performance;
  • the job title, function and grade;
  • the duration of free time and holidays;
  • periods of notice;
  • any collective or standard employment contract in force; and
  • wages (cash and/or wages in kind, allowances, gratuities, expenses).

Collective Labour Agreements

Collective agreements are in force in many economic sectors – so-called collective labour agreements (Gesamtarbeitsverträge or CLAs). They contain the general provisions for the respective industry, such as working hours, holidays, notice periods, minimum wages, etc. The minimum wages are redefined annually in a wage and protocol agreement.

CLAs can be declared generally binding by the government. If this is the case, they apply to the entire industry and to all employers, both domestic and foreign. The SAVE Foundation was set up by the social partners to monitor and enforce collective labour agreements declared generally binding. The Central Joint Commission (ZPK) was set up by the foundation for enforcement and monitoring, and has the task and competence to control and enforce compliance with and implementation of the CLA provisions in their respective area of application.

Currently, there are CLAs in the following sectors, which are generally binding:

  • the car industry;
  • master builders and pavers;
  • retail trade;
  • electrical-electronic and radio-TV trades;
  • gardeners and florists;
  • building cleaning and caretaker services;
  • plasterers and painters (including scaffolding);
  • building services and plumbers/building envelope;
  • the information technology industry;
  • interior decorator and floor layer trade;
  • the metal industry;
  • stove fitters and tilers;
  • personnel service providers (personnel rental);
  • joiner; and
  • master carpenters and roofers.

Negotiating CLAs

CLAs are negotiated by the social partners. On the employee side, this is the Liechtenstein Employees' Association (LANV) and on the employer side the Chamber of Commerce (WKL), the Chamber of Industry and Commerce (LIHK) and PostBus Liechtenstein Anstalt. If a CLA has not been declared generally binding, it applies only to companies that have signed the CLA.

Currently, there are CLAs in the following sectors, which are not generally binding:

  • bakers and confectioners;
  • the hairdressing industry;
  • gastronomy;
  • commercial industry;
  • the textile cleaning trade; and
  • the metal and non-metal industry.

Moreover, the government may issue so-called standard employment contracts (Normalarbeitsverträge or NAV). This means that the government regulates the employment relationship between employee and employer in a particular industry. The provisions of the NAV apply directly to the employment relationships within its respective scope, unless otherwise agreed in the individual employment contract. Currently, NAVs exist for employees in domestic service and agriculture.

Working time is defined as the time during which the employee must be available to the employer. Travel to and from work, however, is not considered working time. If the work has to be performed outside the usual place of work and the travel time is longer than the usual commuting time to work, the time difference is considered working time.

Working Hours

In any case, the length of the working hours must be determined and documented (eg, by time recording systems or respective reports).

Under Liechtenstein law, daily work may not begin before 6 am and may not continue after 11 pm. The start and end of the day's work may be changed between 5 am and midnight if employees are represented within the company (see 4.5 Employee Representations) or, if there is no such representation, if the majority of the affected employees agree. In this case too, the maximum daily working time is 17 hours. The daily working time of the individual worker must be within a daily time period of 13 hours, including breaks and overtime.

The maximum weekly working time in Liechtenstein is as follows:

  • 45 hours for employees in industrial companies, for office staff, for technical and other employees, including sales staff in large retail trade companies (retail trade);
  • 40 hours for young people between 15 and 18 years; and
  • 48 hours for all other workers.

For certain groups and entities, the weekly working time may be temporarily extended by up to four hours.

Overtime/Overtime Work

Under Liechtenstein law, a distinction is made between overtime (Überstunden) and overtime work (Überzeitarbeit).

If overtime (meaning more working hours on a specific working day) is necessary, employees are only obliged to do overtime to the extent that they are able and can be expected to do so. Overtime must be compensated by time off or paid at a premium of at least 25% compared to the respective regular salary, unless otherwise agreed upon in writing. Overtime may not exceed two hours per day for the individual employee, except on non-working days or in emergencies.

Overtime work, on the other hand, is defined as exceeding the maximum working hours. This may only be exceeded in exceptional cases, such as in the case of the urgency of the work, extraordinary workload, inventories, clearance of accounts and liquidation work, or work to prevent or eliminate operational disruptions (unless the employer can be reasonably expected to take other precautions).

Overtime calculation and wages

The employer must pay the employees a wage supplement of at least 25% for overtime work. However, this is only the case for office staff and technical and other employees, including sales staff in large retail trade enterprises, if the overtime work exceeds 60 hours per calendar year.

The average weekly working time, including overtime, may not exceed 48 hours within four months. If overtime work is compensated by free time of equal duration within a reasonable period of time, with the consent of the individual employee, no bonus payment is due.

Depending on the duration of work, the following minimum break times must be granted:

  • 15 minutes for a continuous working time of more than five and a half hours;
  • 30 minutes for a continuous working time of more than seven hours; and
  • one hour for a continuous working time of more than nine hours.

Breaks, Rest Time and Days Off

Breaks are considered to be working time if the employees are not allowed to leave their workplace. Breaks of more than 30 minutes may be divided in agreement with the employee. In the case of flexible working hours, such as flexible working time, the average daily working time is decisive for calculating break times.

After the end of the daily working time, a rest period of at least 11 hours must be granted in the default scenario. At shift changes, the rest period may be reduced to eight hours once a week, provided that the average of 11 hours in two weeks is observed. The weekly day of rest shall by default be Sunday. The weekly day of rest and the daily rest period shall together constitute at least 35 consecutive hours.

If the weekly working time is spread over more than five days, the employee must be granted a weekly half-day off. The employer may, with the consent of the employee, grant the weekly half-days off for a maximum of four consecutive weeks.


By default, working on Sunday is not permitted. However, if Sunday work is necessary for a company, it can be authorised by the Office of National Economy, provided specific legal requirements are met. In the case of temporary Sunday work, a wage supplement of 100% must be paid and a substitute rest day must be granted in the preceding or following week.

In shops or petrol stations, only a 50% supplement must be paid for permanent or regularly recurring Sunday work. In a calendar year, employees in shop and petrol station businesses must be granted at least 26 Sundays off, which may be distributed irregularly over the year.

The number of free Sundays may be reduced to a minimum of four, provided that the employee's weekly working time does not exceed 18 hours on average over four weeks. Public holidays are considered equivalent to Sundays.

Night Work

In principle, night work is not permitted. However, if night work is necessary for a company on a temporary, permanent or regularly recurring basis, it can be approved by the Office of Economic Affairs. The legal requirements for this must be met.

In case of night work, the daily working time may not exceed eight hours. Additional specific provisions for night work exist.

Termination Employment Agreements

An employment agreement entered into for an indefinite period of time may be terminated by the employer or by the employee at any time without justification. However, the individual termination dates and termination periods have to be observed.

During a trial period, the employment relationship can be dissolved at any time by either party, subject to a seven-day period of notice effective from the end of a working week.

Termination periods

Unless otherwise agreed upon in the individual employment contract, the following termination periods apply once the trial period has been completed:

  • during the first year of service: one month as per the end of the respective month;
  • during the second year of service up to and including the ninth year of service: two months as per the end of the respective month; and
  • from the tenth year of service onwards: three months as per the end of the respective month.

Termination for good cause or mutual agreement

There is always the possibility to terminate the employment relationship for good cause (eg, fraud), in which case the termination dates do not have to be observed. Good cause is given if the terminating party can no longer reasonably be expected to uphold the employment relationship.

At all times it is possible to terminate the employment relationship through mutual agreement, in which case a dissolution with immediate effect is possible.

Collective Redundancies

Collective redundancies (mass dismissals) are defined by law as terminations of at least 20 employment relationships within 90 days by the employer for operational reasons (Section 1173a Article 59a et seq of the ABGB).

In the event of a planned mass dismissal, the employer must consult the employee representatives in the company, or the employees if there are no such representatives, and inform the Office of Economic Affairs (Amt für Volkswirtschaft or AVW) in writing. The consultation must be initiated as soon as the mass dismissal is planned – ie, before the final decision is made and before the notification to the AVW and the issuing of notices of termination.

The employee representatives must be given all relevant information in good time; the following information in particular must be provided in writing:

  • the reasons for the planned mass dismissal;
  • the number and categories of employees affected and the reasons for their selection;
  • the number of workers normally employed;
  • the period of the projected collective redundancies; and
  • the procedure for determining severance pay (social plan).

Notifying the AVW

The employer must notify the AVW of the planned mass dismissal and send a copy of this notification to the employee representatives. The notification shall contain the results of the consultation and all relevant information on the planned mass dismissal. The AVW will seek ways to mitigate the consequences of the planned mass dismissal.

Subject to any contractual or statutory provisions to the contrary, planned mass dismissals will take effect no earlier than 30 days after receipt of the notification by the AVW.

The Employee Participation Act (Mitwirkungsgesetz or MWG) encompasses the major part of the provisions regarding employee representation under Liechtenstein law. However, employees in the public sector are not subject to these regulations.

Depending on the size of the respective company, employee representation and participation is effectuated either directly or by proxy. Nonetheless, employees are merely granted the right to be heard and specific information rights.

Employees only have (limited) participation rights when it comes to mass dismissal, health issues (including health insurance issues), safety issues and certain business transfers.

Individuals (eg, employees or self-employed persons) are regarded as being resident in Liechtenstein if they reside in Liechtenstein with the intention of staying permanently or if they stay in Liechtenstein temporarily for a period longer than six months. Resident individuals are generally subject to unlimited tax liability on their worldwide income and worldwide net assets. Non-resident individuals are subject to limited tax liability on their income and net assets located in Liechtenstein (ie, real estate and permanent establishments in Liechtenstein).

Wealth Tax

The net value of assets (total assets minus debt) at the beginning of the tax year is the base of the wealth tax. Real estate and permanent establishments situated abroad are tax exempt. The wealth tax is integrated into the income tax, meaning that the amount of net assets multiplied by a standard rate (currently 4%) becomes a part of the taxable income.

Individual Income Tax

Taxable income generally includes employment income, income from self-employment, director's fees, retirement benefits and income from other sources. Income from investments (mainly dividends, interest and rental income) is tax exempt, provided that the underlying assets are subject to wealth tax. Work-related costs (eg, travel expenses, education), social security contributions, lump sums for health insurance and other personal deductions (eg, child allowance) are deductible. Taxable income is subject to tax at the progressive rates, varying between 0% and 8%.

Communities levy a surcharge on the income tax due at rates that may range from 150% to 250%. The maximum income tax rate, including the maximum municipal surcharge of currently 180%, cannot currently exceed 22.4%.

Social Security Contributions

Social security contributions are shared between the employees and employers. The employer is obliged to withhold the employee contributions. The taxable base is the gross salary. The following compulsory social security contributions are due:

  • old age, survivors' insurance – 8.1% (employee contribution 3.95%, employer contribution 4.15%);
  • disability insurance – 1.5% (employee contribution 0.75%, employer contribution 0.75%);
  • family compensation fund – 1.9% (employee contribution n/a, employer contribution 1.9%);
  • contribution to administrative expenses – 0.2875% (employee contribution n/a, employer contribution 0.2875%); and
  • unemployment insurance (no contribution on income in excess of CHF126,000) – 1% (employee contribution 0.5%, employer contribution 0.5%).

Furthermore, accident insurance (occupational/non-occupational) and health insurance are mandatory in Liechtenstein.

Withholding Taxes

No withholding taxes on dividends, interests and royalties are levied in Liechtenstein.

Inheritance and Gift Taxes

Liechtenstein does not levy inheritance or gift taxes.

Corporate Income Tax (CIT)

A company doing business in Liechtenstein is subject to unlimited tax liability if its domicile or place of effective management is in Liechtenstein. Such company is generally taxed on its worldwide income. Non-resident companies are subject to limited tax liability on their income attributable to real estate and permanent establishments in Liechtenstein.

CIT is levied on taxable net corporate income, which is calculated on the basis of annual accounts. Income from foreign real estate and foreign permanent establishments is not taxed in Liechtenstein. Dividends, capital gains and unrealised increases in value from participations in legal persons are generally not included in the taxable net corporate income, subject to anti-avoidance provisions (see 5.7 Anti-evasion Rules). However, realised and unrealised losses from participations are not deductible. Furthermore, a notional interest deduction (currently 4% of the modified equity) may be deducted from taxable income (see 5.3 Available Tax Credits/Incentives).

The CIT rate is 12.5%. A minimum CIT of CHF1,800 per year is levied on companies with unlimited and limited tax liability. Operating small enterprises are, under certain conditions, exempt from the minimum CIT. A tax return must be filed for each business year.

Capital Tax

No capital tax is levied in Liechtenstein.

Withholding Taxes

No withholding taxes on dividends, interests and royalties are levied in Liechtenstein.

Stamp Duty

Based on the customs union treaty between Liechtenstein and Switzerland, the Swiss stamp duty tax law (including the issuance stamp tax and the securities transfer tax) is applicable in Liechtenstein. Issuance stamp tax is levied on corporations, limited liability companies and establishments with divided capital. Issuance stamp tax of 1% is due in the case of capital increases, with a tax allowance of CHF1 million. Deposits without capital increase cannot benefit from the CHF1 million tax allowance. Securities transfer tax is levied on corporations, limited liability companies and establishments with divided capital. The transfer of securities by securities dealers is subject to a tax of 0.15% (domestic securities) and 0.3% (foreign securities).

Liechtenstein Formation Tax

Legal entities that are not subject to Swiss stamp law are subject to the formation tax of 1% of the statutory capital (not applicable to contributions to the reserves). The formation tax is reduced to 0.5% above CHF5 million and to 0.3% above CHF10 million. Foundations and trusts pay 0.2% of the statutory capital, but at least CHF200.

Value Added Tax (VAT)

For Liechtenstein VAT purposes, Switzerland is considered domestic territory. VAT is levied on any supply of goods and provision of services in Liechtenstein, and on the import of goods and the provision of services from abroad to Liechtenstein. Export of goods and services is not subject to VAT.

The standard rate is 7.7%. A special rate of 3.7% applies to accommodation services (ie, hotels) and a reduced rate of 2.5% applies to certain other goods and services (ie, food, water or medication). Various services are tax exempt – eg, banking and insurance.

In general, VAT must be declared and paid quarterly or, in special cases, monthly, half-yearly or yearly.

Real Estate Gains Tax

The seller of a property located in Liechtenstein has to pay a tax on real estate gains at the rate of 0% to 24%.

A foreign tax credit may be claimed in an amount not exceeding the amount of Liechtenstein CIT payable on the income subject to foreign taxes.

Tax Incentives

The following tax incentives are applicable under the Liechtenstein tax law:

  • tax exemption of dividend income and capital gains from participations under consideration of anti-avoidance provisions (see 5.7 Anti-evasion Rules);
  • tax exemption of income from foreign real estate and permanent establishments situated abroad;
  • general tax exemption, upon application, of legal entities and trusts that have a charitable purpose without the intention of making a profit;
  • privileged taxation as a Private Asset Structure (PAS) is available to entities that do not conduct any economic activity; a PAS is only liable to the minimum CIT of CHF1,800 annually; and
  • notional interest deduction (see below).

Notional Interest Deduction

A deduction of 4% on the modified equity poses a commercially justified expense. The modified equity is calculated as follows:

  • equity at the beginning of the tax year;
  • plus equity increases;
  • minus equity decreases, own shares, participations in legal entities, assets not required for business operations, and 6% of the assets that have not already been deducted.

The corrections of equity as at the beginning of the tax year (see above) are weighted and deducted pro rata temporis, aggregated per quarter and considered to have occurred in the middle of the quarter.

If the modified equity is negative, the notional interest deduction is CHF0. The notional interest deduction cannot lead to a loss nor increase an existing loss. A double-dip through interest expenses at the parent company and notional interest deduction at the subsidiary is not possible.

Group Taxation

Upon application, associated companies may form a group for tax purposes and compensate losses within the group with profits in the same year. In order to apply for group taxation, certain conditions have to be met (eg, participation of more than 50% of capital and voting rights of subsidiaries by a Liechtenstein group parent company). Losses are allocated on a pro rata basis according to the participation held.

The allocated losses are taxed retrospectively, inter alia, when the loss-making company makes profits again or leaves the group. After five years, tax is recovered retrospectively irrespective of profits in the group company. This is only a temporary tax suspension.

No thin capitalisation rules are applicable in Liechtenstein.

The general principle is that intra-group transactions must be carried out at arm's length in Liechtenstein. Thus, corporate income and expenses that arise between related parties must be determined in the same way as would be the case for a relationship between independent third parties.

According to the recommendations of the OECD, transfer prices for transactions with related parties and permanent establishments must be documented. Documentation requirements vary according to the size of the companies or the associated group.

Liechtenstein does not have special Controlled Foreign Corporation (CFC) rules, but the Liechtenstein domestic tax law does provide for a General Anti-Avoidance Rule (GAAR).

Liechtenstein has recently introduced special anti-avoidance rules for dividends and capital gains. The anti-avoidance provisions cover dividends and capital gains as well as unrealised increases in value from participations in legal persons with more than 50% passive income and low taxation (<6.25% or <50% of the effective Liechtenstein taxes), so such income is taxable (switch-over).

There is a transitional period, with the first application in 2022 for participations acquired before the end of 2018. In addition, dividends that are tax deductible at the paying entity are not tax exempt (hybrid-mismatch).

Liechtenstein has no national merger control rules or antitrust law. However, the competition rules of the EEA Agreement (Articles 53 to 60 and ANNEX XIV, Competition), incorporating certain provisions of the EU Merger Regulation into the EEA Agreement, are applicable. If the transaction in question exceeds certain turnover thresholds, a proposed merger or concentration must be notified either to the European Commission or to the EFTA Surveillance Authority (ESA).

The relevant thresholds are set out in the EU Merger Regulation and Annex XIV of the EEA Agreement respectively. The merger provisions of the PGR do not define national thresholds.

Applicability When Thresholds Are Not Met

Even if the thresholds for a concentration with an EU or EFTA dimension are not met, the provisions of the EU Merger Regulation are nevertheless applicable in the following circumstances:

  • where the combined aggregate worldwide turnover of all the undertakings concerned is more than EUR2.5 billion;
  • where the combined aggregate turnover of all the undertakings concerned is more than EUR100 million in each of at least three EU Member States or EFTA States;
  • where the aggregate turnover of each of at least two of the undertakings concerned is more than EUR25 million in each of at least three EU Member States or EFTA States, included for the purpose of the above point; and
  • where the aggregate EU or EFTA-wide turnover of each of at least two of the undertakings concerned is more than EUR100 million.

This last point applies unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same EU or EFTA Member State.

A concentration that is subject to merger control must be notified to the competent authority (see 6.1 Merger Control Notification) before it is implemented. Closing without notification or prior to clearance can result in fines being imposed.

Phase I

In phase I, the European Commission or the ESA issues a formal clearance decision if it finds that the concentration notified does not fall within the scope of the merger regulation or, although falling under the regulation, does not raise serious doubts as to its compatibility with the common market. Where it finds that the concentration falls within the scope of the merger regulation and raises serious doubts as to its compatibility with the common market, the European Commission or the ESA shall decide to initiate proceedings.

Phase II

The phase II decision approves or blocks the merger.


The deadline for a decision in phase I is 25 working days from a complete notification. Under certain conditions, the period may be extended to 35 working days. The deadline for a decision in phase II is 90 working days from the initiation of proceedings, and may be extended to 105 days.

Under certain conditions, this period may be extended further, provided that the total duration of any extension or extensions in phase II does not exceed 20 working days.

Liechtenstein has no national antitrust law. Cartels may be prohibited by EEA competition law (see 6.2 Merger Control Procedure).

Article 54 of the EEA Agreement prohibits any abuse by an undertaking – or a group of undertakings – that has market dominance within the EEA, provided that the abuse may affect EEA trade.

Abuse can include:

  • imposing unfair prices or trading conditions;
  • limiting production, markets or technical development;
  • placing trading parties at a competitive disadvantage by applying dissimilar conditions to equivalent transactions; and
  • other conduct excluding competitors from the market to the detriment of consumers.

The ESA can impose fines for an infringement of Article 54.

Under certain conditions, an abuse of dominant position may contravene the principle of good faith and, thus, constitute unfair practice within the meaning of the Act against Unfair Competition. In the case of a wilful violation of the Act against Unfair Competition, the Princely Court may, upon request, impose a fine of up to CHF100,000, or up to CHF50,000 in the case of negligent violation.

In the Patent Protection Treaty of 22 December 1978, the Principality of Liechtenstein and the Swiss Confederation declared to constitute a unified area for the protection of patents for inventions. Accordingly, the patent law of Switzerland is also applicable in Liechtenstein, with the relevant provisions of Swiss law being periodically published in the Law Gazette (Landesgesetzblatt) of Liechtenstein. Patents for invention have the same effect in both states and can only be granted, assigned and revoked, or will expire for the entire territory of protection.

From 1995, however, any exhaustion of the rights under a patent that may occur in the Principality of Liechtenstein under EEA law is not deemed to affect the state of such rights under patent law in Switzerland.

Definition and Legal Requirements

An invention or process is eligible for patent protection if it is both:

  • novel (that is, it cannot easily be derived from the state of the art by a person skilled in the field concerned at the time of the application); and
  • capable of industrial application.

A patent is not granted if the invention or process violates human dignity or is in any other way contrary to public morals or public policy. The following are also excluded from patentability:

  • methods for treatment by surgery or therapy and diagnostic methods practised on the human or animal body; and
  • plant varieties and animal varieties or essentially biological processes for the production of plants or animals.

The last point applies unless it is a microbiological procedure or product derived from it, or if the application of the invention is not technically confined to a single plant or animal variety.

The patent holder has the exclusive right to exploit the patent commercially.


By virtue of a Treaty, the competent Patent Office is the Swiss Federal Institute of Intellectual Property (Eidgenössisches Institut fur geistiges Eigentum or IGE), the headquarters of which are in Bern, Switzerland. The website of the IGE ( provides detailed information on the application procedure.

Enforcement and Remedies

Patent infringers can be prosecuted through both civil and penal proceedings. The competent courts for civil action in patent cases are the Princely High Court (Fürstliches Obergericht) at first instance and the Swiss Federal Tribunal (Schweizerisches Bundesgericht) at the appellate level. The most commonly used remedies include preliminary injunctions and monetary compensation.

Criminal sanctions include a custodial sentence not exceeding one year or a monetary penalty (the maximum fine is 360 times the daily rate of CHF3,000). The calculation is at the discretion of the competent authorities, based on the default and economic ability of the offender.

Length of Protection

The maximum period of patent protection is 20 years from the date of the application.

Definition and Legal Requirements

A trade mark is a distinctive mark of authenticity through which the goods and/or services of a particular enterprise are distinguished from those of other enterprises. Trade marks may have the form of words, letters, figures or pictures, or combinations of such elements. Marks may also be represented three-dimensionally or acoustically.

No trade mark protection is afforded to deceptive marks or marks contrary to morality, nor to marks that are in the public domain, except where the latter have obtained secondary meaning for the products for which they are claimed. Furthermore, no trade mark protection is afforded to marks that are identical or similar to a prior trade mark and are intended to be used for the same or similar goods or services, if they involve a risk of confusion.

The trade mark right grants the proprietor the exclusive right to use the trade mark for the purpose of identification of the goods or services for which it is claimed and to dispose of that trade mark (for example, by sale, pledging or licensing).


The trade mark right arises, on the basis of an application for registration, upon the deposit of the trade mark and its entry onto the register of trade marks kept at the Office of Economic Affairs (Amt für Volkswirtschafi). Registration is made in accordance with the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. Currently there are 45 classes.

Having ratified the Madrid Agreement concerning the International Registration of Marks and the Protocol relating thereto, Liechtenstein is a state party to the Madrid System. Accordingly, a batch of trade marks can be obtained through mediation of the Office of Economic Affairs at an international level, which has the same effect as the relevant national registration in each of the contracting states designated by the applicant. Vice versa, international registration with protective effect for Liechtenstein has the same effect as deposit and registration in Liechtenstein.

Enforcement and Remedies

If a legal interest exists, the Princely Court (Landgericht) may, upon request, declare the existence or non-existence of a legal relationship in respect of a trade mark. Moreover, any person whose trade mark right or indication of origin is infringed or jeopardised is entitled to seek judicial redress by action for performance. The Princely Court may order the confiscation or destruction of objects that are not in accordance with the indication of origin or with trade mark law.

Any intentional infringement of the trade mark rights of others or intentional use of incorrect indications of origin will be punished with imprisonment of up to one year or a fine of up to 360 daily rates (the maximum daily rate being CHF1,000), if the infringed party so requests. Furthermore, there are criminal offences committed under aggravating circumstances (for example, fraudulent use of trade marks).

Length of Protection and Renewability

The registration is valid for a period of ten years from the date of deposit; the protection period may be renewed for further periods of ten years each, upon request. If the trade mark has not been used within five years of its registration, or if such use has been suspended during an uninterrupted period of five years, the mark may be subject to cancellation upon request from a third party.


The Office of Economic Affairs will delete an entry, in full or in part, if the proprietor files an application for deletion or if the entry expires and is not renewed, or if the entry is declared null and void by a court judgment.

Definition and Legal Requirements

Design means the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation.

If a design is new, has individual character and is contrary to neither law nor morality, it is eligible for protection and may be entered in the design register kept by the Office of Economic Affairs.

The design right entitles the proprietor of a design to prohibit any other persons from using the design for commercial purposes. The proprietor of the design may transfer, pledge or license the design right.


An application for registration must be filed with the Office for the National Economy. Liechtenstein is a state party to the Hague Agreement Concerning the International Deposit of Industrial Designs or Models, and other international conventions. Any person who deposits a design internationally obtains the same protection as is granted in the event of a deposit in Liechtenstein.

Enforcement and Remedies

The legal protection (action for performance, etc) and the penal provisions (infringement of design right) are formulated similarly to the relevant provisions of the trade mark law (see 7.2 Trade Marks).

Length of Protection and Renewability

The period of protection is five years from the date of deposit and may be extended by four periods of protection of five years each. Thus, the maximum period of protection is 25 years.

Definition and Legal Requirements

Literary and artistic works (including scientific works and computer software) are protected by copyright, provided they are original, intellectual creations of the author, and have a unique character.

The author has the exclusive right to decide whether, when and how the work is used.


Protection arises automatically from the moment of creation, with no need for registration.

Enforcement and Remedies

The legal protection afforded to the author and the penal provisions are formulated similarly to the provisions of trade mark law (see 7.2 Trade Marks).

Length of Protection

Protection lasts for the entire life of the author and expires 70 years after his or her death.


The Copyright Act regulates the rights of artists in their performance, the rights of film and sound producers, and the rights in a database (so-called related rights or neighbouring rights). The protection of such related rights is generally weaker than the protection of copyrights.

Domain names may be protected as internet counterparts of trade marks.

Factory or Business Secrets

The unauthorised use of factory or business secrets may constitute unfair conduct within the meaning of Article 5 (exploitation of a service provided by others) and Article 6 (violation of factory and business secrets) of the Liechtenstein Act against Unfair Competition, and a violation of Section 122 (violation of a business or trade secret) of the Liechtenstein Criminal Code.

In this context, it is worth mentioning that, on 6 September 2019, the Liechtenstein Parliament ratified the EEA Joint Committee Decision 091/2019, which serves to incorporate Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure into the EEA Agreement. The entry into force of said Joint Committee Decision is pending fulfilment of constitutional requirements by Norway and Iceland.

Know-how can be contractually insured against exploitation by third parties – eg, by agreeing to confidentiality clauses and setting forth contractual penalties in case of breach of confidentiality.

The Data Protection Act of 4 October 2018

The Data Protection Act has been in force since 1 January 2019. The purpose of this law is to protect the personality and fundamental rights of natural persons with regard to the processing of their personal data. It is based on the following EU Regulations:

  • Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation – GDPR); and
  • Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA (ABI L 119, dated 4 May 2016, page 89).

The Information Act of 19 May 1999

This has been in force since 1 January 2000 and regulates the principles and procedures for informing people about the activities of the authorities, particularly the right to information and access to files.

The Information Ordinance of 19 October 1999

This has been in force since 1 January 2000 and lays down rules for informal inquiries about government business or business that is prepared by an authority on behalf of the government, which shall be answered by the member of the government responsible for such.

The Data Protection Act applies to public and non-public bodies. For non-public bodies, it applies to the automated and non-automated processing, wholly or partly, of personal data stored or being stored in a file system.

The Act applies to non-public bodies under the following conditions:

  • the controller or processor of personal data processes the data domestically;
  • the processing of personal data takes place in the course of the activities of a domestic branch of the responsible person or processor; or
  • the responsible person or processor falls within the scope of the GDPR, although it is not established in an EEA Member State.

Applicability of the GDPR

According to Article 3 therein, the GDPR applies to the processing of personal data in the context of the activities of an establishment of a data controller or a data processor in the EU, regardless of whether the processing takes place in the EU or not, or in the case of the processing of personal data of EU data subjects by a controller or processor that is not established in the EU, where the processing activities are related to the offering of goods or services, irrespective of whether a payment of the data subject is required, or to the monitoring of data subjects' behaviour that takes place within the EU.

In compliance with the terms of the local Data Protection Act, the GDPR provisions are applicable to foreign companies targeting customers in the Principality of Liechtenstein.

The Data Protection Authority is the national supervisory authority, pursuant to Article 51 of the GDPR and Article 41 of Directive (EU) 2016/680. The Data Protection Authority is in charge of supervising the fulfilment of the provisions of the Data Protection Act of 4 October 2018.

The Data Protection Authority has the following tasks, in addition to those set out in the GDPR:

  • monitoring and enforcing the application of the Data Protection Act as well as other regulations regarding data protection and laws and regulations implementing Directive (EU) 2016/680;
  • promoting public awareness and understanding of the risks, rules, safeguards and rights in relation to the processing of personal data; activities addressed specifically to children shall receive specific attention;
  • advising the Parliament, the government and other institutions and bodies on legislative and administrative measures relating to the protection of natural persons’ rights and freedoms with regard to the processing of personal data;
  • promoting awareness among controllers and processors of their obligations under the Data Protection Act and other data protection legislation, including legislation adopted to implement Directive (EU) 2016/680;
  • upon request, providing information to any data subject concerning the exercise of their rights under the Data Protection Act and other data protection legislation, including legislation adopted to implement Directive (EU) 2016/680, and, if appropriate, co-operating with the supervisory authorities in other Member States to that end;
  • handling complaints lodged by a data subject, or by a body, organisation or association in accordance with Article 55 of Directive (EU) 2016/680, and investigating, to the extent appropriate, the subject matter of the complaint and informing the complainant of the progress and the outcome of the investigation within a reasonable period, particularly if further investigation or co-ordination with another supervisory authority is necessary;
  • co-operating with other supervisory authorities, including sharing information and providing mutual assistance, with a view to ensuring the consistency of application and enforcement of the Data Protection Act and other data protection legislation, including legislation adopted to implement Directive (EU) 2016/680;
  • conducting investigations on the application of the Data Protection Act and other data protection legislation, including legislation adopted to implement Directive (EU) 2016/680, also on the basis of information received from another supervisory authority or other public authority;
  • monitoring relevant developments, insofar as they have an impact on the protection of personal data, particularly the development of information and communication technologies and commercial practices;
  • advising on the processing operations referred to Consultation of the Data Protection Authority; and
  • contributing to the activities of the European Data Protection Board.

The Data Protection Authority shall have powers as defined in the Data Protection Act, which is based within the scope of the GDPR and referred to in Article 58 of the GDPR. In the case of a breach, the Data Protection Authority can inform the competent supervisory authority.

Violation of Data Protection

If the Data Protection Authority concludes that – in data processing for purposes beyond the scope of the GDPR – public or non-public bodies have violated the Data Protection Act or other data protection legislation, or that there are other shortcomings in their processing or use of personal data, it shall notify the controller of the violation. In the case of a public body, the Data Protection Authority will also inform the government. The Data Protection Authority shall give the controller (and the government, in the case of a public body) the opportunity to notify its opinion within a reasonable period.

The Data Protection Authority may refrain from notifying the controller or requesting a statement if the infringement is insignificant or was remedied in the meantime. The Data Protection Authority may also warn the controller, if the intended processing of personal data is likely to violate this Act or any other data protection legislation applying to the respective data processing.

The powers of the Data Protection Authority shall also extend to:

  • personal data obtained by public and non-public bodies regarding the contents of and specific circumstances relating to postal communications and telecommunications; and
  • personal data that is protected by official secrecy, especially tax secrecy pursuant to the Tax Act.

Provision of Compliance Data

Public and non-public bodies shall be obliged to provide the following to the Data Protection Authority as well as any persons charged with the monitoring of compliance with data protection legislation by the Data Protection Authority:

  • access to all premises, including to any data processing equipment and means, and to all personal data and all information necessary to perform their tasks, after being given due notice by the Data Protection Authority or a responsible person; and
  • any information that is relevant and necessary to fulfil their tasks.

In the case of a non-public body, the person who is obliged to provide the information may deny the provision of information if doing so would expose them or another person as set out in the Code of Criminal Procedure to criminal prosecution. The person concerned shall be informed accordingly.

The Data Protection Authority advises and provides support to data protection officers and takes their typical needs into consideration. It may demand the dismissal of a data protection officer if such individual does not have the expert knowledge needed to perform their tasks or if there is a serious conflict of interests as referred to in Article 38 (6) of the GDPR.

No major relevant legislative reforms are foreseeable in the near future. In view of the last few years, it can be said that various major legal reforms are driven by the EEA acquis to be implemented and the OECD framework agreed by way of international treaties.

Marxer & Partner

Heiligkreuz 6
PO Box 484
LI-9490 Vaduz

+423 235 81 81

+423 235 82 82
Author Business Card

Trends and Developments


Marxer & Partner was founded in 1925 and has 12 partners, a permanent consultant, 12 legal staff, four of counsel and approximately 50 other professionals. For many years, Marxer & Partner has focused its activities on the fields of corporate law, M&A, trust and estate planning, capital markets and tax, and provides in-depth knowledge and advice in these fields to its international client base. The experienced corporate litigation team has successfully represented clients in litigation, and international arbitration proceedings complete the scope of services provided to clients. Many of the firm’s lawyers regularly contribute to international handbooks and other publications, and speak at conferences. The firm represents Liechtenstein exclusively at Lex Mundi, the worldwide association of independent law firms.

General Introduction

Economic key factors

The Liechtenstein economy is highly diversified. In addition to strong local businesses and a global export industry, the financial services sector is of great importance to the country: although only 15% of the workforce is employed in this sector, it generates more than one third of the total value to Liechtenstein's national economy. At the end of 2018, Liechtenstein counted 38,378 inhabitants. It is worth noting that, at the same time, Liechtenstein's economy provided a total of 39,635 jobs and that 22,038 inward commuters formed part of the total workforce.

Economics and politics

Liechtenstein is a member of numerous international organisations, such as the United Nations, the World Trade Organization, the Council of Europe, the Organization for Security and Co-operation in Europe and the European Free Trade Association (EFTA). By joining the European Economic Area (EEA) in 1995, the country gained access to the European single market while maintaining its traditionally close ties with Switzerland in a reconcilable manner. As a globally oriented business location, Liechtenstein has a vital interest in the worldwide implementation of internationally recognised standards, especially in the financial sector. In this context, preventing abuses and combating money laundering and terrorist financing are top priorities for Liechtenstein. Therefore, the International Monetary Fund recognises Liechtenstein's efforts and attests to it a "high level of compliance".

Financial centre

There are currently 15 Liechtenstein-based banks, which are mainly specialised in private banking. The range of private banking services is supplemented by investment fund and insurance business, which has developed sustainably in recent years.

Liechtenstein's Business-Oriented Legislation

To further a business-friendly environment, Liechtenstein aims to provide innovative and flexible legislation to create and promote new business opportunities. In this regard, the introduction of the Liechtenstein Venture Cooperative (LVC) in 2017 (a special provision in the law regarding small co-operatives; Article 483 of the Persons' and Companies' Act), the enactment of a fintech-related law in 2020, namely the Token and Trustworthy Technology Service Provider Act (TVTG – the Blockchain Law), and the total revision of the Trade Act in 2020 are worth mentioning.

Liechtenstein Venture Co-operative

The LVC is a platform for several parties to co-operate in developing innovations. Through the establishment of an LVC, an innovator directly incorporates his or her idea into a specific legal structure and thereby prepares the basis for facilitating co-operation with other specialists and investors. The LVC offers a legal basis for combining the work and non-cash and capital contributions from various persons (both private individuals and legal entities) that are required to develop an innovation, in the form of an investment. This means that the founders can prove that they already described the invention in that form at the time of establishment. Inventors are given shares in the company for contributing their idea to the LVC or doing the preparatory work.

The LVC was provided for in the law based on an initiative by the Ministry for General Government Affairs and Finance. The establishment of an LVC may primarily be considered if several people are working on an innovation. However, even if an individual inventor does not apply for an LVC initially, it may be useful for such inventor to have his or her invention described in an invention document signed and officially authenticated, pursuant to the process outlined on the government's LVC website, which also contains templates for the constituting documents of an LVC and other useful information (see

The innovation document is intended to provide evidence if disputes over intellectual property arise at a later stage. In this context, inventors may also wish to remember to record the time spent on the invention even before establishing an LVC, as such efforts may be brought into the LVC as a preliminary contribution. As a legal entity, an LVC is subject to normal taxation, particularly income tax. After being entered in the Trade Registry, an LVC may be converted into an ordinary co-operative, which in turn may be converted into other company forms, such as a company limited by shares.

Blockchain Law

In October 2019, the Liechtenstein Parliament approved the Blockchain Law, which entered into force on 1 January 2020. With this new law, Liechtenstein is the first country to have a comprehensive regulation of the token economy.

On the one hand, the law regulates civil law issues relating to client protection and asset protection. On the other hand, adequate supervision of the various service providers in the token economy is established. In addition, there are measures to combat money laundering by submitting service providers to AML/CFT rules. The law also provides clarity with regard to digital securities. The TVTG forms part of the Liechtenstein government's financial market strategy and is thought to position Liechtenstein as an innovative location with legal security for providers in the token economy.

Total revision of the Trade Act

A total revision of the Trade Act (Gewerbegesetz – GewG) was enacted and entered into force on 1 January 2021, triggered by criticism from the EFTA Court. The new GewG basically introduces a shift from a principal licensing requirement for the establishment of foreign businesses to ex-post control by the authorities.

The former system of a general authorisation/licensing requirement, according to which any trade/commercial activity must be authorised before it can be executed, was abandoned. A trade licence is now only required in exceptional cases. This authorisation requirement must be justified for each trade by a predominant general interest. The requirements and procedures must be non-discriminatory and proportionate. Possible reasons for a predominant general interest include consumer protection, environmental protection, protection of a high level of education, social policy objectives, protection of employees, etc. Within the framework of the proportionality test, it must be examined whether a licence is required in order to achieve the objective.

In addition, the 4th Anti-Money Laundering Directive and the Due Diligence Act (DDA) require that certain trades (accountants, real estate agents and traders in goods) also fall under the scope of the DDA under certain conditions, and, as a result, the reliability test must be extended to beneficial owners with a defined portion of shares. This examination shall be the responsibility of the Office for National Economy.

Further Legal Changes Relevant to Business

Insolvency Law amendment introducing personal insolvency

The revised Insolvency Law entered into force on 1 January 2021.

The main aspects of the far-reaching amendment to the Insolvency Law are to focus on reorganisation (Sanierung), because this is in the interest not only of the enterprise concerned and the general economy, as it may save jobs, but also of creditors, as it usually raises the quota available to them.

In relation to the reorganisation plan, the law provides for a reduction of the minimum quota to be offered to 20% (currently at 40%) and for a reduction of the majority requirement for the creditor consent to a simple majority (currently a two-thirds majority is required), whereby only the votes of the creditors present in the hearing are counted. The system of several categories of insolvency creditors is also abandoned, since that system led to creditors from the general insolvency category normally only receiving a very small quota or nothing at all.

A further notable modification in the new law is the introduction of the possibility for natural persons to file for private insolvency (Privatkonkurs). The aim of the law is to improve the situation of an insolvent natural person in the interest of both the creditors and the debtors. The legislator has recognised that the former ordinary insolvency proceedings were hardly suitable for natural persons, which is why the law now provides for special proceedings.

According to the law, concluding a reorganisation plan (Sanierungsplan) should be simplified for private individuals through more flexible provisions and reducing the maximum payment period to five years. A minimum quota of 20% is nevertheless necessary. The creditors decide on acceptance.

If a reorganisation plan cannot be achieved, a payment plan (Zahlungsplan) without a minimum quota of payments can be considered. The assessment period is the following five years. The payment period can be shorter or longer, but is limited to seven years. Again, the creditors decide whether the payment plan is accepted.

If a payment plan is also not possible, the skimming-off procedure (Abschöpfungsverfahren) comes in, which begins with the realisation of the assets. Within five years, the debtor must try to generate income and during this time make the attachable part of his or her income available to the creditors. In the meantime, only a modest standard of life should be possible. If the debtor adheres to the agreed payments and other obligations, he or she will be free of debt after five years and granted "residual debt discharge" (Restschuldbefreiung) without the consent of the creditors. The creditors will – as far as possible – receive a part of their claims back. Private insolvency aims to give honest and motivated debtors a realistic chance of a new economic start.

Legal Changes Relating to the Judicial System

A final noteworthy amendment relates to the laws governing the Constitutional Court (StGH), the Supreme Court (OGH) and the Administrative Court (VGH), which entered into force on 1 January 2021.

According to the Report and Motion No 50/2020 introducing the new law, Liechtenstein's highest courts – namely the Constitutional Court, the Administrative Court and the Supreme Court – are marked by the idea of "militia courts". Such courts are extremely economic, as they have part-time presidents and judges, rather than full-time.

On the downside, the courts are particularly dependent on a well-functioning and solid infrastructure – for example, with respect to the continuity of their work. The Liechtenstein highest courts so far have had only minimal resources in this regard. With the exception of the Supreme Court, which has a secretariat or court registry, the judges of the three next highest courts do not have any institutionalised administrative and technical support. The law, therefore, creates the legal basis for considerably improving the infrastructure at the highest courts and consolidating their institutionalisation. To this end, the law creates professional court registries and equips the courts with research services, thereby relieving the administrative and technical burden on the presidents in particular.

Marxer & Partner

Heiligkreuz 6
PO Box 484
LI-9490 Vaduz

+423 235 81 81

+423 235 82 82
Author Business Card

Law and Practice


Marxer & Partner was founded in 1925 and has 12 partners, a permanent consultant, 12 legal staff, four of counsel and approximately 50 other professionals. For many years, Marxer & Partner has focused its activities on the fields of corporate law, M&A, trust and estate planning, capital markets and tax, and provides in-depth knowledge and advice in these fields to its international client base. The experienced corporate litigation team has successfully represented clients in litigation, and international arbitration proceedings complete the scope of services provided to clients. Many of the firm’s lawyers regularly contribute to international handbooks and other publications, and speak at conferences. The firm represents Liechtenstein exclusively at Lex Mundi, the worldwide association of independent law firms.

Trends and Development


Marxer & Partner was founded in 1925 and has 12 partners, a permanent consultant, 12 legal staff, four of counsel and approximately 50 other professionals. For many years, Marxer & Partner has focused its activities on the fields of corporate law, M&A, trust and estate planning, capital markets and tax, and provides in-depth knowledge and advice in these fields to its international client base. The experienced corporate litigation team has successfully represented clients in litigation, and international arbitration proceedings complete the scope of services provided to clients. Many of the firm’s lawyers regularly contribute to international handbooks and other publications, and speak at conferences. The firm represents Liechtenstein exclusively at Lex Mundi, the worldwide association of independent law firms.

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