Сompany registration in Liechtenstein: Legal aspects and advice
If you plan to start a business in Europe, Liechtenstein is an excellent choice for registering your company. The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Liechtenstein , and is ready to share its results and help you choose the right jurisdiction.
What are the main advantages of incorporating a company (business) in Liechtenstein?
- Sound legal framework
Liechtenstein provides a strong legal foundation for doing business, which is especially valuable for entrepreneurs seeking stability and protection for their interests. Local legislation is designed to meet modern business needs. It supports a variety of corporate structures, allowing businesses to choose the most suitable format for their specific activities. This ensures confidence in the long-term stability and predictability of operating conditions.
- Political and economic stability
Liechtenstein is a politically stable country with low corruption and a high GDP per capita. Additionally, developed infrastructure and highly educated workers support economic stability. The government actively fosters business growth, providing entrepreneurs with essential resources for expansion and development. Liechtenstein’s political and economic stability forms a solid foundation for building reliable business relationships and achieving sustainable growth.
- Favorable tax environment
Liechtenstein offers attractive tax conditions for companies, featuring low tax rates and options for cost optimization. The standard corporate tax rate is only 12.5%, one of the lowest in Europe, significantly reducing the tax burden on businesses. Additionally, the jurisdiction does not impose a capital gains tax, providing further benefits to companies that invest and reinvest their profits.
- Streamlined incorporation process
The company registration process in Liechtenstein is fast and efficient, helping to avoid unnecessary delays and bureaucracy. Government authorities support entrepreneurs with straightforward administrative procedures for setting up a business, making Liechtenstein especially appealing for entrepreneurs looking to start operations quickly and fully take advantage of the local market’s benefits.
- Нighly developed financial sector
Liechtenstein is renowned for its reliable and professional financial infrastructure, encompassing banks, insurance companies, trusts, and investment funds. The country offers a modern banking system and high-quality financial services, providing entrepreneurs with security and confidentiality for their financial transactions. This is especially valuable for international businesses that require trusted relationships with financial institutions.
- Access to the European market
Through its membership in the European Economic Area (EEA), companies registered in Liechtenstein enjoy smooth access to the European market. This opens up a broader geographic reach and enables easy trade with EU countries without additional customs or tax barriers. Access to a market of over 500 million consumers offers substantial opportunities for business growth and expansion.
How to register a company in Liechtenstein and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Company registration
- Verification and reservation of the company name at the Commercial Register
- Register or login and fill in the company names and director/ shareholder(s)
- Facilitating the notarial process for the company’s official registration
- Opening a bank account and paying/contributing the share capital in full amount upon the formation of the company
- Incorporating the company’s data into the Commercial Register
- Obtaining the Certificate of incorporation issued by the Commercial Register
- Getting the licenses or permits, if applicable
Requirements for registering a company in Liechtenstein on the example of a Limited Liability Company (LLC) / Gesellschaft mit beschränkter Haftung (GmbH):
- Shareholders: the company must have at least 1 shareholder, with no requirements as to nationality or residency. The shareholder can be a legal or natural person.
- Director: the company is required to have at least 1 local resident director.
- Company secretary: no requirement.
- Minimum share capital: the minimum nominal capital is CHF 10,000 (or €10,000 or $10,000) and minimum value per share is CHF 50 (approx. €51). It can be in cash or in kind. The minimum nominal capital must have been fully paid up or contributed upon the incorporation of the company.
- Legal address: the company must have a registered address in Liechtenstein.
- Liability: only the assets of the company are liable for the liabilities of the company. The GmbH members are not liable for the liabilities of the company.
- Accounting: the legal representatives of the GmbH are under an obligation to file the duly approved annual accounts and the audit report with the Office of Justice no later than before the expiration of twelfth months after the balance sheet date.
What do you have to know about taxes when registering a company in Liechtenstein?
Corporate income tax (CIT):
- Resident companies are subject to unlimited tax liability on worldwide income.
- The standard flat rate is 12.5%.
- With the exception of some small businesses, each registered business must pay a minimum tax of CHF 1,800 (approx. €1,870) per year.
- No minimum corporate earnings tax is imposed, if the balance sheet of a business has not exceeded CHF 500,000 (approx. €519,704) over the average of the last three financial years and if the purpose is exclusively to operate a business run along commercial lines.
- The tax filing period for a year is 30 June of the following year.
- The tax return can be completed electronically using the e-Tax system, but a printout with the date and personal signature must be submitted to the Tax Administration in a timely manner.
Personal income tax (PIT):
The PIT rates are as follows:
- from CHF 0 to CHF 20,000 (approx. €20,787) – 1%
- from CHF 20,000.01 (approx. €20,787) to CHF 40,000 (approx. €41,577) – 3%
- from CHF 40,000.01 (approx. €41,577) to CHF 70,000 (approx. €72,757) – 4%
- from CHF 70,000.01 (approx. €72,757) to CHF 100,000 (approx. €103,943) – 5%
- from CHF 100,000.01(approx. €103,943) to CHF 130,000 (approx. €135,122) – 6%
- from CHF 130,000.01(approx. €135,122) to CHF 160,000 (approx. €166,294) – 6.5%
- from CHF 160,000.01(approx. €166,294) to CHF 200,000 (approx. €207,874) – 7%
- from CHF 200,000.01 (approx. €207,874) and above – 8%
Value-added tax (VAT):
- The standard rate is 8.1%.
- A special rate is 3.8% (accommodation services such as overnight stays with breakfast in hotels and health resorts and in other types of accommodation such as private accommodation, holiday homes, student dormitories, mountain lodges, camping sites, youth hostels, etc.).
- A reduced tax rate of 2.6% is levied on such services and products, but not limited (turnover resulting from and import of tap water; medication; newspapers, magazines, books; services of radio and television companies, with the exception of commercials or other turnovers of a commercial nature).
- Getting a VAT registration is mandatory if the turnover exceeds CHF 100,000 (approx. €103,943) in a year.
- e-MWST is a platform in which businesses can file their VAT statements by electronic means.
For readers
Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Liechtenstein. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Liechtenstein, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Liechtenstein and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.