Thinking in Generations
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Thinking in generations Presenting the Liechtenstein financial centre Issue 2021 / 2022 CONTENTS 4 Principality of Liechtenstein 5 Liechtenstein in figures 6 Liechtenstein as a business location 7 The Liechtenstein financial centre 8 Locational advantages of the Liechtenstein financial centre 10 Spotlight: conformity 16 Fiduciary companies 17 Banks 18 Asset management companies 19 Investment fund companies 20 Insurance companies 21 Auditors 22 Association of Liechtenstein Charitable Foundations and Trusts e. V. 23 CFA Society Liechtenstein 24 Attorneys-at-law 25 Liechtenstein Finance 26 Contact 27 Legal information FOREWORD Liechtenstein’s accession to the European Economic Area (EEA) in 1995 heralded a new era. On the one hand, the European in ternal market opened up for Liechtenstein companies, and on the other hand, Liechtenstein thereby committed itself to considering European regulations and incorporating them into national law. This was particularly true for the Liechtenstein financial centre, and had wide-ranging consequences for its stakeholders. The Liechtenstein financial centre has sound foundations, is well- regulated and independently supervised. Strict statutory provisions and rules to combat money laundering, governing cross-border tax offences and terrorist financing guarantee the H. S. H. Prince Michael stability and security of the financial centre. Their adherence of Liechtenstein is safeguarded by an independent and strong Financial Market Chairman of the Board of Authority. Liechtenstein’s commitment to OECD standards on Directors of Liechtenstein transparency and exchange of information in tax matters enables Finance e. V. financial centre players to develop fully their core competencies in long-term, cross-border wealth issues in the interests of their clients. In particular during uncertain times. Further, increasingly stringent requirements will continue to be imposed upon the financial centre and the stakeholders in the coming years. New stakeholders, new technologies, new products, new laws and directives will shape the financial centre. Thanks to the short decision-making channels in Liechtenstein and the open and trustworthy cooperation between the govern- ment, the administration and the financial centre associations, these requirements will also be implemented quickly and with a healthy sense of proportion. This will ensure that Liechtenstein continues to play a pioneering role as an adaptable and innovative financial centre in the future as well as for our future generations. 3 Principality of Liechtenstein Export nation at the heart of Europe The Principality of Liechtenstein is a diversified economic area. It is not merely the numerous locational advantages that speak for themselves. The country is also characterised by its pristine natural environment, the many recreational opportunities and the people of Liechtenstein themselves. Switzerland Austria Nestled between Austria and Switzerland lies the world’s sixth-smallest nation, at the very centre of Europe. In terms of entrepreneurship, how- ever, the country is right at the forefront. World market leaders and glob- ally operating industrial corporations, a professional, innovative financial centre and a large number of commercial enterprises characterise the Principality of Liechtenstein as a business location. 4 Liechtenstein in figures Form of government The Principality is a constitutional hereditary monarchy on a demo- cratic and parliamentary basis. 38 747 inhabitants Liechtenstein’s population has increased more than four-fold Prince over the past 100 years. On 15 August 2004, Prince Hans-Adam II abdicated and appointed his son, Hereditary Prince Alois as the new head of state. 5 government members The country’s supreme executive body consists of the prime minister 160 km² and four ministers. Liechtenstein’s borders and consequently its surface area have remained practically 25 members un changed for 300 years. 42 % of the total surface area or of parliament 67 km² is forest. Liechtenstein’s parliament is also called the “Landtag” or 11 municipalities “Hohes Haus”. Liechtenstein’s settlements are divided into two electoral districts, known as the “Oberland” (Vaduz, Triesen, Balzers, Triesenberg, Schaan, Planken) and the “Unterland” (Eschen-Nendeln, Mauren- 41 784 jobs Schaanwald, Gamprin- Bendern, Ruggell, Liechtenstein has more positions of Schellenberg). employment than inhabitants. Each day over 20 000 people commute to 1 : 8 the Principality for work. In Liechtenstein, the ratio between eco- nomically active companies and inhabitants is about 1 : 8 (in Switzerland approx. 1 : 14 and in Germany some 1 : 24). Swiss francs Liechtenstein made the Swiss franc (CHF) its legal tender on 26 May 1924. German Liechtenstein’s official and national language is German. 5 Liechtenstein as a business location Broadly diversified business centre with stable industrial and financial sector 0.1 % agriculture 35 % general services 22 % financial services 43 % industrial Gross output by economic sector Customs union Market access Stability and continuity Liechtenstein is part of the Swiss Liechtenstein-based compa- A stable social, legal and customs territory. In addition nies have unrestricted market economic system ensures to the customs union, there are access to 31 states and around a high degree of of conti- over 100 further bilateral trea- 500 million people in Europe. nuity and legal certainty. ties with Switzerland. 6 The Liechtenstein financial centre Professional, innovative, internationally-recognised and broadly based Liechtenstein financial centre Fiduciaries, banks, asset management companies, fund companies, insurance companies, auditors, common benefit foundations, lawyers as well as FinTech and blockchain companies all value Liechtenstein’s locational advantages. 13 36 102 banks insurance asset management companies companies 147 763 245 1362 fiduciaries single and fiduciary common-benefit sub-funds companies foundations 20.3 % public expenditure ratio Blockchain in Liechtenstein AAA rating Liechtenstein has the lowest Legal certainty promotes inno- Liechtenstein has no govern- public expenditure ratio (govern- vation and reduces risks for all ment debt and is regularly ment spending in relation to parties. That is why the Token awarded an AAA country rating GDP) of all European countries. and VT Service Providers Act by Moody’s and Standard & In Switzerland the ratio is in (“TVTG”) was introduced on Poor’s. the region of 30 %, in Austria at 1 January 2020. over 50 %. 7 Locational advantages of the Liechtenstein financial centre Perfect combination of innovation and a long-term mindset The Liechtenstein financial centre thinks in generations. The focus on the long term, on quality and stability is just as impor- tant as being in touch with the latest trends. QUALITY AND STABILITY AND LEGAL AND STRENGTH OF INNOVATION LEGAL CERTAINTY TAX CONFORMITY • Extensive expertise and • Stable social, legal and • Financial centre regulation long-standing experience economic system in Liechtenstein based on of service providers within • Customs and currency union EU guidelines the financial centre with Switzerland since 1924 • Internationally integrated • Direct access to specialists • Member of the European Eco- and recognised financial and experts from Switzerland, nomic Area (EEA) since 1995. market supervisory authority Austria, Germany and • Barrier-free access to the • Recognition and implemen- Liechtenstein European market (freedom tation of international and • Flexibility and short decision- of movement of goods, European tax cooperation making channels in Liechten- people, services and capital) standards stein • Political continuity and • Early AEOI adopter (automatic • Europe-compliant niche stability exchange of information) products in the financial sector • Liberal economic policies • Global Forum rating “largely • Support for innovation • Liberal company law compliant” • Sound financial policies / • Implementation of OECD / no government debt BEPS (corporate taxation • Very well-funded public sector guidelines) • Moderate corporate taxation • Tax information exchange • AAA country rating awarded agreements and / or double by Moody’s and Standard & taxation agreements with Poor’s 54 states • Broadly diversified economy with strong industrial sector 8 Locational advantages of the Liechtenstein financial centre SUSTAINABILITY AND PHILANTHROPY • Liechtenstein is establishing itself as a respected, sustai nable and stable financial centre. • Acting in a responsible, sustain- able manner is a central compo- nent of Liechtenstein’s culture. • Unique projects: • “Energy country”: all of Liech- tenstein’s municipalities have been awarded the “Energy Town” label. Liechtenstein is the world’s first “energy country”. • “Solar world champion”: Liech- tenstein has the highest per capita photovoltaic capacity. • “Water footprint”: Liechten- stein is the first country to offer as many people in developing countries safe access to clean drinking water as it has in- habitants. • Outstanding international reputa- tion as a philanthropy centre at the heart of Europe. • Advanced foundation gover- nance with high protection of the private sphere. 9 Spotlight: conformity Stability, continuity, innovation and conformity – the Liechtenstein way With its 300 year history, Liechtenstein stands for continuity and stability. Decisions are therefore made with an eye to the greatest pos sible future sustainability. Particularly noteworthy for the finan- cial