Corporate income tax – 12.5%.
Tax basis. Corporate income tax is levied on profits made by the company worldwide. However, profits derived from foreign branches or permanent establishments, foreign real estate and profits undistributed by foreign subsidiaries may not be taxable.
Withholding tax - Liechtenstein does not levy tax on dividends, interest and royalties paid to non-residents.
Dividends received by the Liechtenstein company are generally tax exempt.
Personal income tax on individuals is 28%.
VAT - 7.7%.
Capital gains tax is treated as ordinary income and taxed at the standard rate.
Foreign sources income is taxed at standard rates, except for dividend income, income from capital gains in real estate abroad and income from foreign representative offices and branches.
Losses can be carried forward indefinitely.
Private Limited Company (AG) and Limited Liability Company (GmbH). The main difference between an AG and a GmbH (Limited Liability Company) is that the first one has an increased transferability of shares, along with higher capital and governance requirements than other types of companies.
Unlike a LLC, a PLC is more convenient for global business, especially when dealing with customers and suppliers. This type of company can engage in all commercial activities, including international trade of goods and services, holding and disposing of investments as well as the administration of real estate. An AG follows the same company formation procedure as a GmbH. Both types of companies require that at least one of the company’s directors is a resident of Liechtenstein.
In the case of the AG, it’s essential to appoint an auditor, a German-speaking managing director and maintain a legal registered office in Liechtenstein.
Entrepreneurs who want to start a company in Liechtenstein will need a business license. In order to obtain this license, the investor must meet the following requirements:
Have a clean financial record regarding past financial dealings;
Have the necessary competence and knowledge to carry out the proposed business
Have the necessary space to carry out commercial activities;
Have the necessary employees to carry out the planned work;
Have sufficient German language knowledge
If an investor does not meet any of the above requirements, they may appoint a managing director to obtain the business license on their behalf.
Liechtenstein foundation (Stiftung). The purpose of this legal entity is to facilitate the management of global family assets for the benefit of designated beneficiaries, at the same time maintaining confidentiality. A foundation is best suited for holding assets such as shares in other companies, properties or other forms of investments.
For the Stiftung there is a one time formation fee, of 0.2% of the foundation worth and a capital tax of 1% of the formation capital. When assets are distributed to beneficiaries, there is no other tax levied in Liechtenstein.
The Stiftung does not have a board of directors, but it appoints a Foundation Council instead. The council can be made of natural or foreign individuals. Nevertheless, at least one member must be a resident of Liechtenstein. This type of company does not carry out any commercial activities and no external supervision is required in the case of a private benefit Stiftung. According to the liberal Foundation Law in Liechtenstein, foundations may be for public purpose, religious foundations, joint foundations, corporate foundations, staff welfare foundations and family foundations.
Establishment (Anstalt). This type of company is most commonly used by foreign companies as a holding company in Liechtenstein. The Anstalt is mainly a hybrid between a company limited by shares and a foundation. This company has a board of directors, but there are no shareholders or members involved. Company control is granted to the founder. This company may conduct both commercial and non – commercial activities.
For the incorporation, the Anstalt requires a share capital of 30,000 CHF, just like a GmbH. Bookkeeping is mandatory and, in the case of commercial activities, an annual audit must be performed.
Trust Enterprise. A trust company is suited for protection of family assets and estate planning. This company is set up by a settler through a Deed of Trust, equivalent to the articles of association and it must specify the name and purpose of the trust, the identities of the trustees, the composition of the trust fund, as well as the identity of auditors. The minimum required trust fund is 30,000 CHF. A Liechtenstein trust must pay an annual corporate income tax of 1,200 CHF. The Trust Deed is submitted to the Registrar of Trusts within 12 months from formation, if not, the trust is included in the public register.
A trustee may be an individual, a corporation or an association. One of the trustees must be a Liechtenstein resident and hold a recognized professional qualification.