Indotco - Company Formation, Advisory & Tax Solutions, Business Consultant

Indotco International


It's a personal service.
Indotco - Company Formation, Advisory & Tax Solutions, Business Consultants
 


 

Company Formation in Liechtenstein


 
Liechtenstein is an attractive jurisdiction for business formation due to its favorable tax regime, political stability, and robust legal framework. We outline here the requirements, processes, and taxation associated with forming a company in this principality.

Types of Companies

The most common types of business entities in Liechtenstein are:

- Gesellschaft mit beschränkter Haftung (GmbH): Equivalent to a limited liability company, suitable for small to medium-sized enterprises.
- Aktiengesellschaft (AG): Similar to a public limited company, appropriate for larger enterprises.

Requirements for Company Formation

To establish a company in Liechtenstein, several requirements must be met:

- Shareholders: A minimum of one shareholder is required. There are no restrictions on nationality or residency; shareholders can be individuals or legal entities.
- Directors: At least one director must be a local resident. This ensures compliance with local regulations.
- Minimum Share Capital:
- For a GmbH, the minimum share capital is CHF 10,000 (approximately €10,000 or $10,000), which must be fully paid upon incorporation.
- For an AG, the minimum capital requirement is CHF 50,000, also fully paid at registration.
- Registered Address: The company must have a registered office in Liechtenstein.
- Documentation: Essential documents include the articles of association, proof of identity for shareholders and directors, and evidence of the registered address.

Steps for Company Formation

The process of forming a company in Liechtenstein generally includes the following steps:

1. Initial Consultation: Assess business needs and choose the appropriate legal structure.
2. Name Reservation: Availability of the desired company name with the Commercial Register.
3. Document Preparation: Drafting and notarizing necessary documents such as articles of incorporation.
4. Bank Account Opening: Corporate bank account opening to deposit the minimum share capital.
5. Registration: Submission of all documentation to the Commercial Register for official incorporation.
6. Licensing: Necessary licenses or permits depending on the business activities. Companies engaged in trading activities will need special permits and licenses and will need to be registered for EORI purposes for customs procedures.

The entire process typically takes between two to three weeks.

Taxation in Liechtenstein

Liechtenstein offers an attractive tax environment for companies:

- Corporate Income Tax (CIT): A flat rate of 12.5% applies to worldwide income, making it competitive compared to many other jurisdictions.
- Value Added Tax (VAT): The standard VAT rate is 8.1%.
- Personal Income Tax (PIT): Ranges from 1% to 8%, depending on income levels.

Additionally, Liechtenstein has signed double taxation treaties with numerous countries, which helps prevent fiscal evasion and reduces tax burdens for international businesses.

Main benefits of establishing a company in this principality:

1. Favorable Tax Regime
- Low Corporate Tax Rate: Liechtenstein offers with 12.5% a competitive and one of the lowest corporate tax rate in Europe, making it attractive for businesses seeking to minimize tax liabilities.
- No Withholding Taxes: There are no withholding taxes on dividends, interest, or royalties, enhancing the attractiveness for international investors.
- Value Added Tax (VAT): The VAT rate is relatively low at 8.1%, further benefiting businesses operating in the region.

2. Political and Economic Stability
- Liechtenstein boasts a stable political environment and a robust economy, consistently rated with AAA credit ratings. This stability provides a secure backdrop for business operations and investments.

3. Access to European Markets
- As a member of the European Economic Area (EEA), Liechtenstein allows companies to access the EU single market without barriers, facilitating trade and investment opportunities across Europe.

4. Business-Friendly Environment
- The country has streamlined company formation processes, allowing for quick incorporation—often within just a few days. Minimal requirements include only one director and one shareholder, which simplifies the setup for foreign entrepreneurs.

5. Strong Financial Infrastructure
- Liechtenstein is known for its sophisticated banking and financial services sector, providing businesses with access to world-class financial resources and expertise.

6. High Quality of Life
- The principality offers an excellent standard of living, which can be an attractive factor for expatriates and skilled professionals considering relocation.

7. Confidentiality and Privacy
- Liechtenstein provides high levels of confidentiality regarding company ownership and operations, appealing to investors who prioritize privacy in their business dealings.

In conclusion, establishing a company in Liechtenstein involves navigating specific requirements and processes but offers significant advantages such as low taxation rates and a stable economic environment. Entrepreneurs considering Lichtenstein as jurisdiction will benefit from its strategic location in Europe and its business-friendly policies.

Don’t hesitate any longer. Apply to become a client today to work with our experts on legal tax strategies.
 


 
You have some more questions?
Contact us for more details or a free quote.