Exploring the business in Liechtenstein

Nestled in the heart of Europe, Liechtenstein is a diminutive yet powerful economy known for its business-friendly environment, strategic positioning, and robust financial sector. For entrepreneurs eyeing international expansion or newcomers planning to establish their ventures, Liechtenstein offers a promising platform for diverse business endeavors. This article delves into a comprehensive insight about the business in Liechtenstein.

5 Main business in Liechtenstein

Liechtenstein's economy boasts a diverse range of thriving industries. While the country is renowned for its robust financial services sector, including private banking, asset management, and wealth preservation services, it also embraces other sectors like manufacturing, tourism, technology, and commerce. Its business-friendly policies and innovation-friendly environment have attracted companies seeking stability and growth opportunities. Here are 5 main business in  Liechtenstein

5 Main business in Liechtenstein

1. Banking and Financial Services

Liechtenstein's financial services sector is its primary industry, with over 73,000 registered entities, predominantly corporations and trusts. This sector, representing around 25% of the nation's GDP, is known for low taxation, strict confidentiality, and robust corporate governance, employing roughly 16% of the country's workforce. The country's banks, such as Liechtensteinische Landesbank AG and LGT Bank, manage assets worth $60 billion. Liechtenstein earned an impressive AAA rating in 2016 from Standard & Poor's, reflecting its stable economy and the banks' prudent investment strategies.

2. Imports And Exports

Another significant economic sector in Liechtenstein involves the import and export of goods. The country has witnessed notable growth in exports over the years, with exports to Switzerland constituting about 15.7% and approximately 62.6% directed to the European Union. Establishing cordial relations with the US has resulted in considerable imports from Liechtenstein, with Germany following closely. A substantial portion, approximately 32%, of revenue goes into research and development initiatives, pivotal in driving the country’s success.

3. Industry And Manufacturing

The industry and manufacturing sector in Liechtenstein employs about 40% of the workforce and significantly contributes to the nation’s GDP. Mainly focusing on exports, these small-scale specialized businesses, specializing in machinery, equipment manufacturing, and electronics, thrive on research and development efforts. They benefit from access to the European market, free trade agreements, and a diverse labor force from over 100 nations. Interestingly, over half of the workforce commutes daily from outside Liechtenstein.

4. Agriculture

Agriculture, while once pivotal, now represents a minor industry in the country. Despite employing only 0.8% of the population, it holds value in landscape cultivation and soil protection. The region’s suitable land and climate primarily support grazing.

Forests cover around 43% of Liechtenstein’s area, serving various purposes like environmental enhancement and natural hazard mitigation. The stringent laws governing the protection of trees and vegetation ensure a robust and sustainable ecosystem.

5. Tourism

Liechtenstein aspires to establish itself as a leader in the tourism sector. Collaborating with Liechtenstein Marketing, the national tourism sector aims to boost its appeal to visitors. While tourism contributes to the economy, the revenue generated is not as substantial as other industries. Most visitors hail from Germany and Switzerland, with other European countries and the US accounting for a smaller percentage.

Why you should startup business in Liechtenstein

For aspiring entrepreneurs, Liechtenstein offers a supportive ecosystem for startups. The country's emphasis on innovation and technology, coupled with access to venture capital and business incubation programs, creates a conducive environment for new businesses to flourish. Whether in fintech, biotech, or other emerging fields, Liechtenstein provides ample resources and networking opportunities for startups to thrive. Therefore, these reasons will convince entrepreneurs why you should start up business in Liechtenstein

1. Favorable business environment

Liechtenstein offers an appealing tax structure that entices global investors. Its maximum income tax rate of 20% and corporation tax rate of 12.5% stand among Europe's lowest. Moreover, Liechtenstein doesn't impose withholding tax on dividends, interest, or royalties, with no capital duty or real property tax. Its VAT rate, at 7.7%, extends to certain goods and services, while being part of Switzerland for VAT purposes, featuring a reduced rate of 2.5%. The business registration process in Liechtenstein is swift, requiring essential information and documentation for new companies, along with a minimum share capital of CHF30,000 for limited liability entities, and can be completed within two weeks by Tetra Consultants' specialists.

2. Reliable business landscape

Despite its advantageous tax rates, Liechtenstein isn't classified as an offshore destination. Businesses in Liechtenstein are dependable, not on any blacklists, and maintain discrete structures. Establishing a company here mandates a local director licensed to conduct business in the country. The Liechtenstein company registry solely discloses local management data, enhancing the firm owner's confidentiality.

3. Access to the EU market

Liechtenstein's membership in the European Economic Area (EEA) allows access to the EU's single market, presenting global investors with opportunities to tap into the vast EU markets through Liechtenstein. Despite not being an EU member, Liechtenstein has negotiated agreements enabling EU investors to establish enterprises in Liechtenstein's investment funds sector.

4. Growing SMEs

Liechtenstein's economic foundation thrives on small and medium-sized enterprises (SMEs), constituting around 40% of the workforce and nearly 40% of the country's gross value added, driving its growth.

5. Reputable financial hub

Liechtenstein serves as a significant European financial center, offering a favorable regulatory framework for investment funds. International businesses setting up funds benefit from high investor protection, with various legal forms available. The licensing procedure for investment funds is straightforward, and the Financial Market Authority (FMA) ensures market stability and collaborates with European supervisory bodies. Liechtenstein accommodates traditional and modern business concepts, targeting investors from the EU and Switzerland, leveraging its strong financial stability and policies.

6. Efficient banking system

Liechtenstein boasts a highly efficient banking infrastructure, supporting the investment fund business. Its well-capitalized banks weathered the global crisis without government aid, drawing skilled individuals from neighboring nations. The region's financial legacy and proximity to the Zürich stock exchange enable the recruitment of highly skilled professionals.

Why you should startup business in Liechtenstein

How to start a business in Liechtenstein

Depending on the consulting company, there will be different procedures. Offshore CompanyCorp would like to provide a basic procedure for establishing a company in Liechtenstein. We provide 4 simple steps to start a business in Liechtenstein:

Step 1: Preparation

• Our advisory team will assist in identifying the most suitable type of Liechtenstein company for your business activity.
• The team will verify the company name, ensuring compliance with regulations. Certain criteria must be met for a name to be registered, including not containing certain restricted terms or suggesting offensive or criminal connotations.
• You will receive detailed information about Liechtenstein's obligations, taxation policies, and the financial year.

Step 2: Your Liechtenstein Company Details

Your Liechtenstein company details include selecting an appropriate entity type for your business and choosing recommended services for your Liechtenstein company:

• Bank Account: Access to bank accounts worldwide with a Liechtenstein entity, excluding options in UAE and Hong Kong.
• Nominee Services: Option to use nominee services for confidentiality on the Company Registration's website.
• Serviced Office: Selection of a preferred jurisdiction for a service address, available globally.
• Intellectual Property & Trademark Service: Ability to register intellectual property across jurisdictions with a Liechtenstein company.
• Merchant Account: Activation after the corporate bank account is established.
• Bookkeeping: A future service option.
• Processing Time: Two time frames are available for company formation, with normal cases taking approximately 7-8 working days and urgent cases processed within 5 working days, following receipt of full payment and necessary documents.

Step 3: Paying Your Selected Liechtenstein Business

Payment options include:

• Credit/Debit Card (Visa/Master/Amex)
• Paypal
• Bank Transfer: International wire transfer options are available, including IBAN/SEPA for Europe or SWIFT, with varying transfer times.

Step 4: Company Kit is dispatched to your address

• The original company documents will be sent to your provided address via mail services such as DHL/TNT/FedEx. Additional services like bank account opening, serviced office setup, licensing, or trademark applications can be arranged subsequently.
• Delivery of the company kit usually takes 2 to 5 working days after incorporation.
• Upon issuance of the Certificate of Incorporation, your company will be ready to conduct business globally!

Liechtenstein company formation cost

Liechtenstein company formation cost can vary depending on several factors such as the type of entity, legal requirements, professional fees, and associated services. Typically, the expenses involved in forming a company in Liechtenstein might include registration fees, notary fees, legal counsel charges, minimum capital requirements, administrative costs, and ongoing maintenance fees.

As of my last update in January 2022, the approximate costs for establishing a limited liability company (Gesellschaft mit beschränkter Haftung - GmbH) in Liechtenstein could range from CHF 5,000 to CHF 15,000 or more, taking into account legal and administrative expenses. However, these costs are approximate and can vary depending on various factors, including the complexity of the company structure, legal advice, and other services required during the incorporation process.

When evaluating the expenses related to establishing a company in Liechtenstein, consider these aspects:

1. Company Type: Different company structures entail varied costs.
2. Legal and Administrative Charges: Fees for legal counsel, notary services, and administrative assistance play a significant role.
3. Capital Requirements: Some structures mandate minimum capital, impacting initial costs.
4. Professional Assistance: Engaging lawyers, accountants, or corporate service providers incurs additional charges.
5. Government Fees: Registration fees, taxes, and licensing charges are essential considerations.
6. Ongoing Expenses: Annual fees, compliance, accounting, and other recurring costs need to be factored in.
7. Complexity: Elaborate structures or specialized requirements may increase costs.
8. Additional Services: Nominee services, corporate secretarial support, and specific legal advice may lead to extra expenses.
9. Currency Fluctuations: Exchange rates can impact costs, especially when dealing in foreign currencies.
10. Regulatory Changes: Recent legal alterations might affect incorporation expenses.

Conclusion,

In conclusion, the business in Liechtenstein presents a wealth of opportunities for aspiring entrepreneurs and established businesses alike. With a diverse economy, supportive infrastructure, and a commitment to innovation, Liechtenstein continues to attract ventures seeking stability, growth, and access to European markets. As you embark on your entrepreneurial journey in Liechtenstein, thorough planning, expert guidance, and a keen understanding of the business landscape will pave the way for success and prosperity in this dynamic economy.