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Geographical info
Location: Central Europe, between Austria and Switzerland.
Area: total: 160 sq km.
Climate: continental; cold, cloudy winters with frequent snow or rain; cool to moderately warm, cloudy,
humid summers.
Natural resources: hydroelectric potential.
Population: 32,057 (July 1999 est.)
Age structure:
0-14 years: 19% (male 3,076; female 2,949)
15-64 years: 70% (male 11,209; female 11,247)
65 years and over: 11% (male 1,484; female 2,092) (1999 est.).
Ethnic groups: Alemannic 87.5%, Italian, Turkish, and other 12.5%
Religions: Roman Catholic 80%, Protestant 7.4%, unknown 7.7%, other 4.9% (1996)
Languages: German (official), Alemannic dialect
Literacy:
definition: age 10 and over can read and write
total population: 100%
male: 100%
female: 100%.
Government type: hereditary constitutional monarchy
Capital: Vaduz
Administrative divisions: 11 communes (Gemeinden, singular—Gemeinde); Balzers, Eschen, Gamprin, Mauren,
Planken, Ruggell, Schaan, Schellenberg, Triesen, Triesenberg, Vaduz
Independence: 23 January 1719 (Imperial Principality of Liechtenstein established)
Economy—overview: Despite its small size and limited natural resources, Liechtenstein has developed into
a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and living standards
on a par with the urban areas of its large European neighbors. Low business taxes—the maximum tax rate is 18%—and
easy incorporation rules have induced about 73,700 holding or so-called letter box companies to establish nominal
offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland
and uses the Swiss franc as
its national currency. It imports more than 90% of its energy requirements. Liechtenstein is a member of the European
Economic Area (an organization serving as a bridge between European Free Trade Association (EFTA) and EU) since
May 1995. The government is working to harmonize its economic policies with those of an integrated Europe.
Type of Company Available
The Company Limited by Shares (Aktiengesellschaft)
which requires a mimimum paid up capital of CHF50,000. It must submit annual audited accounts, pay a 4% coupon
tax on dividends and is used in the manner of a traditional IBC. Bearer or registered shares may be issued.
The Establishment (Anstalt)
has either commercial or non-commercial objects. It is generally only suitable for one beneficial owner and has
a minimum paid up capital of CHF30,000. Audited accounts need only be submitted when having comercial objects,
otherwise a statement by the directors annually that a complete statement of assets and liabilities is to hand
suffices. The establishment can appoint beneficiaries by means of a by-article, which is not registered with the
authorities - assuring absolute discretion as to the beneficial owner. The ownership respectively the control is
evidenced by the person holding the founder's rights, normally in the form of a blank deed of assignment. An establishment
is not classified as having commercial objects provided it only administers its own assets, eg. an establishment
that purchases properties as an investment to produce income is non-commercial, whereas an establishment that buys
and sells properties as a business to achieve a profit would be classified as having comercial objects.
The Liechtenstein Foundation (Stiftung)
is either registered, in the manner of companies when having the standard charitable purpose of a foundation, or
deposited when a pure family foundation ie where the beneficiaries are specifically designated or definable. All
foundations have a minimumcapital fund of CHF30,000 and submit no accounts to authorities. The Foundation Council
is required to declare that an annual statement of assets and liabilities is available. The deposited family foundation
guarantees a further degree of secrecy.
The Liechtenstein Trust or Settlement (Trust or Treuhandschaft)
is either operated in the manner of a common law trust and governed by the laws of trusteeship, or formed as a
trust enterprise in the manner of a Massachusetts Trust. The trust differs from the fiduciary trust relationship,
in as much that the latter is based on the law of mandate and the trust enterprise as a juridicial person has legal
personality. However, unlike the Anglo-Saxon trust, Liechtenstein law does not contain any prohibition of accumulation
of income or any rule against perpetuities, therefore allowing the creation of a trust with an unlimited duration.
In the objects of the trust enterprise it must be clear whether commercial activities are to be undertaken or
not. This will determine whether auditors are required pursuant to the law in the same manner as with the establishment.
Taxation
The taxation of domiciliary entities is restricted to a capital tax at a preferred rate of norminally 0.1% on capital
paid in or invested assets and reserves, however, a minimum tax of CHF1,000 per annum per entity. A stamp duty
is levied during formation of the capital of a limited company, an establishment and trust enterprise, normally
in an amount of 3%, for family foundations only 0.2% or a minimum of CHF200. A trust pays no duty. A reduction
of duty may be applied for under certain circumstances should the registered capital be higher than CHF5 mio (1.5%)
or more than CHF10 mio (1%).
Liechtenstein has only one double taxation agreement with Austria.
Local Representation
is required on the boards of all juridicial persons and trusts, and all entities must have a local representative.
Summary:
Liechtenstein is the most sophisticated of all offshore centres, situated in the heart of Europe, under two
hours from Zurich Airport, with excellent telecommunications and supported by internationally renowned, highly
efficient Liechtenstein banks and service industries, with English widely spoken in addition to German. Therefore,
it attracts substantial clients requiring a liberal and flexible company law allowing the formation of holding,
domiciliary companies, foundations and trusts in a highly developed jursidiction.
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