Liechtenstein company registration

Liechtenstein company registration

DOING BUSINESS IN LIECHTENSTEIN

Since 2003, Healy Consultants has been efficiently and effectively assisting our Clients with i) Liechtenstein business registration ii) business licensing iii) Liechtenstein business banking solutions iv) visa options and staff recruitment strategies and v) workspace rent.

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  • Advantages and disadvantages

    Advantages of Liechtenstein company registration

    Liechtenstein business registration advantage

    1. If properly structured, a Liechtenstein commercial IP-Company enjoys an effective corporate tax rate of 2.5% on net profits from global income relating to patents, trademarks and designs. IP must be registered and protected in an international register. Liechtenstein’s network of tax treaties can help to reduce the withholding tax imposed by third countries;
    2. A Liechtenstein entity can be a commercial asset management company licensed by FMA and enjoy the following benefits:
      • A flat rate of annual corporation tax of 12.5% on net profits;
      • Offer and provide its services throughout the EEA and EU thanks to the Markets in Financial Instruments Directive;
      • The entity is free of capital gains tax and withholding tax;
      • A Liechtenstein entity can receive investment income free of local tax including dividends, royalties, and interest;
      • There is a legal tax exemption on profits from foreign permanent establishments, rental income from foreign real estate, dividends and capital gains;
      • An Asset Management Company is a legal entity that engages in i) portfolio management and/or ii) provides investment advice.

    Disadvantages of Liechtenstein company registration

    1. All commercial entities in Liechtenstein require a resident director and a high minimum paid up share capital of at least €30,000. Corporate directors are not allowed;
    2. For all commercial Liechtenstein entities, annual unaudited financial statements must be submitted to the Tax Authority of Liechtenstein;
    3. Commercial companies in Liechtenstein require permission to do business, making it difficult to start operations quickly;
    4. Compared to offshore tax haven jurisdictions, registering a Liechtenstein entity is expensive. Annual company costs range from €15,000 including Government license fees, accounting and tax fees, and paying for a local director;
    5. Liechtenstein has a very limited network of double taxation treaties. Consequently, minimizing global withholding tax may be a challenge when extracting funds from subsidiaries located outside of Europe or receiving IP royalties from abroad;
    6. Some Liechtenstein entities like the Anstalt and Stiftung may not be recognized by global banks, customers and suppliers. This problem is exacerbated by the fact all of the entity’s legal documents are in German.
  • Best uses for a Liechtenstein company

    1. Just like Ireland, A Liechtenstein LLC is an excellent European holding company because:
      • If suffers a maximum annual corporate tax of CHF1,200. If properly structured by Healy Consultants, a Liechtenstein holding company will not suffer tax on i) income from overseas operations ii) all forms of dividends and iii) international property holdings;
      • Liechtenstein imposes no withholding tax on dividends, meaning that foreign owners can use these companies as tax-neutral investment vehicles;
      • As part of the European Economic Area (EEA), access to the EU Parent-Subsidiary Directive means that a Liechtenstein company can receive dividends from companies in the EU, Norway and Iceland free of withholding tax, as long as the Liechtenstein company owns at least a 10% stake in the subsidiary.

    2. Similarly to the Luxembourg SPF, a Liechtenstein Stiftung (foundation) is a great family asset management vehicle because:
      • The foundation’s yearly tax bill on its investments is a minimum tax of CHF1,200;
      • The entity is not subject to capital gains tax or withholding tax. Thus, investment proceeds are free from tax in Liechtenstein irrespective of the holding period. Consequently, no tax is payable on dividends and capital gains made through the sale of investments;
      • A Liechtenstein entity can receive investment income free of local tax including dividends, royalties, IP, interest;
      • Legal tax exemption on foreign permanent establishment profits, rental profits from foreign real estate, dividends and capital gains;
      • This entity does not need a financial license if it i) manages its own assets and ii) provides no services to third parties. To enjoy these exemptions the entity i) must have the sole purpose of managing assets ii) must not conduct commercial activities and iii) only hold investments if it exercises no actual influence on the management of the subsidiary company. Only the acquisition, holding, sale and transfer of the assets is permissible.

Company registration

  • Time to incorporate: Four weeks
  • Cost to set up: €20,500
  • Minimum capital: €30,000
  • Physical office required: Yes

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: Yes

Key facts

  • Corporate tax rate: 12.5%
  • Corporate tax base: Worldwide
  • Shelf companies: No
  • Main company type: GmbH

Frequently asked questions

Contact us

For additional information on our company registration services in Liechtenstein, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Zhang Yi, directly: