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Liechtenstein Company Formation
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Liechtenstein Foundation

The principality of Leichtenstein is Europe’s fourth smallest state and lies between Austria and Switzerland. It is a sovereign state and the current head of state is Prince Hans Adam II.

Liechtenstein has common recognizable company formations i.e. the Company limited by Shares and limited liability Companies, and there are formations peculiar to Liechtenstein, the Establishment, or Anstalt an autonomous fund with beneficiaries that is often used as a holding company for patents or royalties, or for estate assets. Off shore vehicles for tax avoidance can take the form of Establishment, the Foundation, Holding and Domiciliary Entities, and Non Resident Entities, Trust Enterprise and the Trust.

Offshore Company Formation

Advantages of a Liechtenstein Offshore Company Formation



Company Formation expertise
Value
Secrecy
Banking services
Legal system
Political stability
Prestige


offshore fee schedule

The Principality of Liechtenstein is renowned as an important financial centre, primarily because it specializes in financial services for foreign entities. The jurisdiction’s low tax rate, flexible incorporation and corporate governance rules, and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders.

Liechtenstein has chartered 17 banks, 3 non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. Its 270 licensed fiduciary companies and 81 lawyers serve as nominees for, or manage, more than 75,000 entities (primarily corporations, institutions, or trusts), mostly for non-Liechtenstein residents.

The economy is stable and the communications and professional services are excellent.

Liechtenstein Company Formation Formalities

The various offshore vehicles are not permitted to engage in commercial activity

  • The 'Holding entity is not limited as to where it holds assets, and can therefore operate within Liechtenstein as long as it sticks to holding activities;
  • The 'Domiciliary' entity is limited to external trading operations, but is permitted for certain internal activities;
  • The establishment (Anstalt) can operate freely within Liechtenstein on an exempt basis as long as it sticks to (non-commercial) holding and investment-type operations;
  • The foundation (Stiftung) and the Trust are not limited from a tax point of view as regards holding and investment activities, and can carry these out in Liechtenstein as well as outside.
There are no onerous registration requirements for these entities.

  • There are no nationality requirements in respect of most official positions;
  • Non-commercial entities such as the Foundation do not require audited accounts;
  • Confidentiality is guaranteed and beneficial ownership details can only be disclosed in the event of criminal activity.

Liechtenstein Trusts

Trusts are a highly effective means of asset protection Trusts can accumulate income, and are subject to no rule against perpetuities. Secrecy is maintained provided that the original trust documentation is deposited with the Registrar of Trusts within 12 months; then there is no public disclosure about, settlers and beneficiaries.

Taxation

Liechtenstein domestic taxes are relatively modest the main taxes for residents are Income Tax, the Net Worth Tax, Gift and Estate Tax, and the Property Profits Tax. VAT applies to most goods and services.

There is no separate capital gains tax as capital gains are treated as taxable income unless they are from real estate, when Property Profits Tax applies. The main taxes levied on businesses are Corporation Taxes (Profits Tax and Net Worth Tax), Capital Tax, Value Added Tax and Coupon (Withholding) Tax.

Holding and domiciliary companies and The Establishment (Anstalt) do not pay profits or property tax.

Banking

A substantial banking sector has developed in Liechtenstein, particularly in private banking, as a result of a combination of factors, including a relatively relaxed but still highly respected regulatory regime, the very flexible company legislation, and strict banking privacy.

Liechtenstein private banks are able to offer highly tax-efficient asset management services to clients, using one or other of the forms available under the PGR Code, so that income received in Liechtenstein from international assets can be forwarded or reinvested with minimal or no local taxation. Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all accounts.

Employment law

Non-Liechtenstein citizens require residence and work permits for any extended stay in the country. Liechtenstein's membership of the EEA gives additional rights for freedom of movement and work to EEA citizens.

Geography People and Culture

The capital of Liechtenstein is Vaduz. The terrain is mountainous and the climate is cold, usually cloudy winters with frequent snow or rain; cool to moderately warm, cloudy, humid summers. The population of Liechtenstein is 33,525 and the ethnic groups are Liechtensteiners, Swiss, Austrians and Germans. The official language is German but the Alemanic dialect is also spoken.

Immigration and Residency

A valid passport is required by all except the nationals of EU member states, who can enter with an identity card.

Tourist visas are given for three months; employment or permanent residence require permits.

EEA nationals have some qualified freedom of movement in Liechtenstein, but in practice non-nationals need residence and work permits. There is a substantial commuting population from Austria and Switzerland.

Legal and Political system

Liechtenstein is a hereditary constitutional monarchy on a democratic and parliamentary basis. Prince Hans Adam II is the Head of State and he is entitled to exercise his right to state leadership in accordance with the provisions of the constitution and of other laws. The head of government and ministers are appointed by the Prince, following the proposals of the Parliament

Citizens elect the parliament directly under a system of proportional representation. Until 1989, 15 members represented the population of the two constituencies (6 for the lowland area and 9 for the highland area). Since 1989 the lowland constituency has been entitled to have 10 members and the highland area 15 members.

The government of Liechtenstein is based on the principle of collegiality, namely of colleagues collaborating with each other. The government consists of the Head of Government and four Councillors. The members of the government are proposed by the parliament and are appointed by the Prince. Only men or women born in Liechtenstein, and who are eligible to be elected to parliament, may be elected to the government committee. The two electoral areas of the country, the highlands and the lowlands, are entitled to at least two members of the government, and their respective deputies must come from the same area.

Economy

Liechtenstein's national currency is the Swiss Franc; there is no exchange control.

Liechtenstein has limited natural resources but is a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and living standards on a par with its large European neighbours. The Liechtenstein industry sector contributes to 40% of the country's GDP, followed by banking and finance (30%), services (25%), and agriculture (5%).

Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995.

Legislation relating to offshore and non-resident business

If you require more information on any particular statute please contact us.

Act concerning Banks and Savings Funds 1960
Act Relating to National and Local Taxation 1961
Law Concerning the Trust Enterprise 1928
Law on Banks and Finance Companies 1993
Law on Banks and Finance Companies 1998
Law on International Co-operation in Criminal Matters
Law on Persons and Companies 1926
Law on Value Added Tax 1995
Swiss Federal Law on Stamp Duty 1993

 
 
 
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