Liechtenstein is a micro-state situated entirely in the Alps and bordering Switzerland and Austria.
Liechtenstein has an very diverse national economy with numerous small and medium-sized enterprises. The high value-added is particularly due to the strong industrial sector and financial services. Financial services traditionally contribute about 25% of Liechtenstein's gross value added. The attractiveness of Liechtenstein as a financial centre is enhanced by the political continuity of the country, its stable currency (Swiss Franc) and legal certainty.
Liechtenstein banks have always specialised in private banking and wealth management, these banks do not engage in investment banking. They are among the best-capitalised banks in Europe. Compared to other European countries, they have a high equity ratio of 15% on average and did not require state aid during the financial crisis.
On 26 May 1924, Liechtenstein declared the Swiss franc (CHF) the legal currency of Liechtenstein. All coins, banknotes and other payment media used in Switzerland were recognised as official legal tender in Liechtenstein.
1 EUR = 1.1521 CHF (2018-02-16)
During the last 11 years EURCHF exchange rate was within the range 1.0341 - 1.6762, reaching its maximum in Oct 2007 and falling to its minimum in May 2015.
Chart 1. Euro to Swiss franc (EURCHF). Source: ECB.
|Nominal GDP (2015)||Nominal GDP per Capita (2015)|
|5.6 bln EUR (+0.11%)||147 300 EUR (+0.10%)|
According to Eurostat, nominal GDP of Liechtenstein in 2015 was 5.6 bln EUR.
In 2015, nominal GDP per capita in Liechtenstein was 147 300 EUR.
|CPI, Year Average (2012)|
|-0.7 % (2011: 0.2 %)|
According to Office of Statistics (Liechtenstein), inflation rate in Liechtenstein in 2012 expressed as annual percentages of average consumer prices was -0.7% which was below the Euro Area average (2.5%) and below the European Union average (2.6%).
Chart 2. Inflation Rate in Liechtenstein. Source: Office of Statistics (Liechtenstein).
|Unemployment Rate (2011)|
|2.5 % (2010: 2.2 %)|
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Liechtenstein are shown in Table 1.
|Natural person, resident||0.0 %||0.0 %|
|Natural person, non-resident||0.0 %||0.0 %|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Liechtenstein signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Liechtenstein and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Liechtenstein signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Liechtenstein and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Liechtenstein signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Liechtenstein has signed bilateral agreements with 51 jurisdictions to automatically receive information:
Liechtenstein has signed bilateral agreements with 58 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Liechtenstein|
|IGA in effect since 19 May 2014, Model 1|
Liechtenstein has FATCA agreement with the U.S. in effect since 19 May 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Liechtenstein are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Liechtenstein's financial accounts hold in U.S. financial institutions will be reported to Liechtenstein's authorities.
|Maximum Protected Amount|
|100 000 CHF|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Liechtenstein are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Liechtenstein (including branches of foreign banks), branches of Liechtenstein's banks abroad|
|Covered Accounts||account balances of all kinds as well as call money and time deposits|
|Maximum Protected Amount||100 000 CHF|
|Paid In Currency||CHF|
Table 2. Deposit guarantee scheme in Liechtenstein.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Swiss franc)||Foreign Currency|
Foreign currency deposit ceiling for Liechtenstein is Aaa (prime).
|Number of Banks|
|Consolidated Assets (2015)|
|60 556.00 mln CHF (-4.42%)|
|Recent Changes (2016)|
|new banks: 0, closed banks: 0|
Currently there are 15 credit institutions operating in Liechtenstein.
In 2015 consolidated banking assets in Liechtenstein were 60 556.00 mln CHF. The consolidated banking assets' evolution is shown at Chart 3 below.
Chart 3. Consolidated banking assets in Liechtenstein.
Recent structural changes (2013 - 2016) of the banking sector of Liechtenstein are summarised in Table 3.
|Number of Opened Banks||0||0||0||0|
|Number of Closed Banks||0||0||1||0|
Table 3. Recent structural changes in the banking sector of Liechtenstein.
|Rank||Name||Total Assets||Market Share|
|1||LGT Bank AG||29108.20 mln CHF||46.61 %|
|2||Liechtensteinische Landesbank AG||14223.20 mln CHF||22.78 %|
|3||VP Bank AG||11083.10 mln CHF||17.75 %|
LGT Bank specializes in private banking and asset management. For the region Liechtenstein – Rhine Valley – Vorarlberg, the bank also provides comprehensive services as a universal bank.
LGT Bank is owned and managed by the Princely House of Liechtenstein. This special ownership structure guarantees important advantages such as stability, reliability, and independence.
LGT Bank AG is the 1st largest bank in Liechtenstein in terms of total assets. In 2015 its total assets were 29 108,20 mln CHF, providing the bank with the market share of 46.61%. In 2015 the bank's annual profit was 112,30 mln CHF.
LGT Bank AG is rated by Moody's. Long-term credit rating assigned to the bank by Moody's is Aa2 (high grade). LGT Bank AG participates in deposit guarantee scheme of Liechtenstein. This scheme covers accounts up to 100 000 CHF per bank per depositor.
The Liechtensteinische Landesbank AG (LLB) was founded in 1861 and is the financial institution with the richest tradition in the Principality of Liechtenstein, it is also one of the largest banks in Liechtenstein. The State of Liechtenstein has been the main shareholder since the partial privatisation of the LLB in 1993.
LLB offers its clients comprehensive products and services in retail, corporate and private banking.
Liechtensteinische Landesbank AG is the 2nd largest bank in Liechtenstein in terms of total assets. In 2015 its total assets were 14 223,20 mln CHF, providing the bank with the market share of 22.78%. In 2015 the bank's annual profit was 77,60 mln CHF.
Liechtensteinische Landesbank AG participates in deposit guarantee scheme of Liechtenstein. This scheme covers accounts up to 100 000 CHF per bank per depositor.
VP Bank AG was formed in 1956 and now ranks among the largest banks in Liechtenstein. It offers tailored asset management and investment advisory services for private persons and intermediaries.
The first-class services for private and professional clients include every aspect of asset management and investment advice. Thanks to a culture of open architecture, clients benefit from the independent and personal advice of a private bank while receiving access to a global network of specialists: advice includes both products andservices of leading financial institutions as well as the bank’s own investment solutions.
On 7 January 2015 VP Bank AG acquired all of the shares of Centrum Bank AG. This means that Centrum Bank AG is now a wholly owned subsidiary of VP Bank AG. The legal merger of VP Bank AG and Centrum Bank AG will be completed in the coming months.
VP Bank AG is the 3rd largest bank in Liechtenstein in terms of total assets. In 2015 its total assets were 11 083,10 mln CHF, providing the bank with the market share of 17.75%. In 2015 the bank's annual profit was 41,20 mln CHF.
VP Bank AG participates in deposit guarantee scheme of Liechtenstein. This scheme covers accounts up to 100 000 CHF per bank per depositor.