Aktiengesellschaft (Corporation)
In Liechtenstein, an Aktiengesellschaft (AG) is a joint-stock company—an entity formed with share capital that is divided into shares, which may be transferred and, where applicable, traded publicly. While AGs are not necessarily listed on a stock exchange, their legal structure allows for the issuance of both registered shares and bearer shares. Bearer shares must be held by a custodian, and a company register of shareholders must be maintained. However, shareholder identities do not require registration with the Liechtenstein Commercial Register.
The AG is a separate legal entity and enjoys full legal capacity. It is most commonly used for medium to large enterprises, holding structures, and financial or investment vehicles due to its flexibility and recognizability in international commerce.
Capital Requirements
A Liechtenstein AG must have a minimum statutory share capital of CHF 50,000, which must be fully paid in at the time of incorporation. Contributions can be made in cash or in kind, though non-cash contributions must be independently valued and verified. The initial capital may be placed in a blocked capital contribution account with a financial institution and later transferred to the company’s operational account once incorporation is finalized.
There is no requirement for par value shares, and shares may be issued in various classes as outlined in the company’s articles of association. The capital structure and share allocation must be detailed in the company formation documentation.
Management and Governance
An AG is managed by a board of directors, responsible for the administration and representation of the company. The board may consist of natural or legal persons, though at least one director must be a resident of Liechtenstein. This requirement ensures local accountability and is a condition for ongoing registration and supervision. Additionally, the company must maintain a registered office address in Liechtenstein, which must be publicly recorded.
The board of directors exercises authority over the strategic direction of the company and may delegate day-to-day operations to appointed officers or management staff. Shareholder meetings serve as the primary mechanism for corporate oversight, particularly in matters concerning capital changes, amendments to articles, and appointments of directors and auditors.
Taxation Regime
Liechtenstein corporations are subject to corporate income tax at a standard rate of 12.5% on their global income. From 1 January 2024, a global minimum tax rate of 15% has been introduced for multinational enterprises with consolidated annual revenues of EUR 750 million or more, in line with the OECD’s Pillar Two framework.
In addition to income tax, a minimum annual corporate tax of CHF 1,800 applies where a company’s gross assets exceed CHF 500,000 in each of the past three years.
Income derived from a foreign permanent establishment (PE) may be exempt from taxation in Liechtenstein under certain conditions. This exemption applies where the foreign PE is subject to local taxation, thus avoiding double taxation under Liechtenstein’s unilateral relief provisions or applicable tax treaties.
Tax Treatment of Capital Gains and Dividends
Capital gains derived from the sale of securities are generally exempt from tax, with one notable exception. Gains realized from disposals of participations in foreign entities may be taxable where:
- More than 50% of the foreign entity’s income is passive in nature (e.g., interest, royalties, portfolio dividends), and;
- The foreign entity is subject to low or no taxation, either directly or indirectly.
A similar rule applies to dividend income and liquidation proceeds. In general, these distributions are tax-exempt unless they originate from foreign entities with predominantly passive income and are situated in low-tax jurisdictions.
Investment fund income is taxable unless the fund primarily invests in participations (i.e., shareholdings) in other legal entities. This exception is designed to promote participation-based investment strategies while maintaining a tax base for passive portfolio-style income.
Withholding Tax and Capital Duty
Liechtenstein does not impose withholding taxes on payments made to non-residents. This includes distributions of dividends, interest payments, and royalties. As such, AGs may distribute profits to foreign shareholders without local tax deductions, subject only to the tax treatment in the recipient’s jurisdiction.
A capital duty is levied on the issue or increase of share capital. The rates are as follows:
- 1% for amounts up to CHF 5 million,
- 0.5% for capital exceeding CHF 5 million but not more than CHF 10 million,
- 0.3% for capital beyond CHF 10 million.
The first CHF 1 million of contributed capital is exempt from capital duty.
Regulatory and Reporting Obligations
Liechtenstein AGs are subject to annual corporate compliance requirements. These include:
- Annual Reporting: Companies must submit an annual report to the Commercial Register detailing any changes to company name, registered office, or directorships.
- Financial Statements and Audit: If the company declares commercial activity in its articles of association or operations, it must prepare audited financial statements and submit them to the Liechtenstein Tax Administration. Audit obligations apply to all AGs, and an independent auditor must be appointed.
- Registered Office and Local Agent: AGs must continuously maintain a registered office in Liechtenstein and are often required to appoint a local representative or fiduciary, especially where the management is non-resident.
Liechtenstein’s legal framework is based on civil law and influenced by Swiss and Austrian corporate law. The jurisdiction benefits from its membership in the European Economic Area (EEA), while also maintaining close financial and regulatory alignment with Switzerland. This dual positioning provides access to the EU internal market for certain sectors while allowing more regulatory flexibility in others.
AGs are commonly used for investment holding, and multinational group structuring, though they are also suitable for operating businesses, especially in the financial and fintech sectors.
Legal
Country code – LI
Legal Basis – Civil law (Swiss)
Legal framework – Law on Persons and Companies
Company form – Corporation (Aktiengesellschaft, AG)
Liability - The liability of the shareholders for the company is limited to the amount of their respective shareholdings.
Share capital – The minimum capital of an AG is CHF 50,000. Upon incorporation, the capital must be fully paid up. Capital contributions may be made in cash or in kind.
Shareholders – An AG may be incorporated by one or more natural persons or legal entities, residents or non-residents, acting as incorporators and initial shareholders. The shareholders are registered in the Commercial Register, which is open to the public.
Directors – All companies in Liechtenstein must have at least one director who is a Liechtenstein national or a residence permit holder. Directors may be natural or juristic persons.
Secretary – The company may appoint a secretary, but it is not mandatory.
Registered Address – A company must have a registered office in Liechtenstein.
General Meeting – An AG must hold an annual general meeting at least once per year.
Electronic Signature – Permitted.
Re-domiciliation – Inward/outward re-domiciliation is not allowed.
Compliance – An annual report must be filed to the Commercial Register featuring information on all changes of managing directors, company name and registered office. If the commercial activity is assumed in the company foundation deed, financial reports and auditing reports must be filed to the Tax Office.
Appointment of an auditor and file audited financial statements is compulsory for all companies.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Civil law (Swiss) Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- CHF 50,000 Minimum issued capital
- CHF 50,000 Minimum paid up capital
- CHFEURUSD Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Taxes
Tax residency – Companies registered in Liechtenstein or its place of effective management in Liechtenstein are deemed to be residents for tax purposes.
Basis – Corporate income tax is levied on worldwide profits. However, profits derived from foreign branches or permanent establishments, foreign real properties and profits undistributed by foreign subsidiaries may not be subject to taxation.
Tax rate – All companies are subject to a corporate tax of 12.5%.
A global minimum corporate tax of 15% would apply to a parent entity of a group with consolidated revenues of EUR 750 million or higher in the preceding two tax years in line with OECD’s Pillar 2 efforts.
An annual corporate minimum tax of 1,800 CHF to companies whose total assets have been CHF 500,000 or greater during the previous three years.
Capital gains – Capital gains from the disposal of shares are not subject to corporate taxes, unless more than 50% of the total income of the underlying legal entity consists of passive income and its taxable income is subject, directly or indirectly, to low taxation
Capital gains derived from the sale local properties are taxed separately under a real estate property tax of 24%
Dividends – Dividends received are usually tax-exempt, unless more than 50% of the total income of the paying entity consists of passive income and its taxable income is subject, directly or indirectly, to low taxation
Interests – Interests are subject to corporate income tax.
Royalties – Royalties are subject to corporate income tax.
Foreign-source income – Foreign-source income is taxable at standard rates, except dividend income, foreign real estate capital gains and income from foreign P.E. and branches.
Withholding taxes – There are no withholding taxes on dividends, interests, royalties, and fees paid to non-residents.
Losses – Losses arising from taxable income may be carried forward indefinitely. Carryback of losses is not allowed.
Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. To determine costs are allowed First in first out (FIFO) or average cost methods.
Anti-avoidance rules – Transactions between related parties must be carried out on arm’s length terms. Transfer pricing documentation must be prepared by large companies. If a company exceeds at least two of the following three criteria, it qualifies as a large company (based on Liechtenstein company law):
- Total assets of CHF 25.9 million.
- Net revenue of CHF 51.8 million.
- Annual average of 250 full time employees.
Small companies are not required to prepare transfer pricing documentation.
There are no thin capitalization rules, nor controlled foreign company regulations. However, abusive tax structures may be disregarded if there are no economic or other substantial reasons for such tax structure.
Labor taxes – Employers and resident employees are required to make contributions to several social security insurance funds:
Old age, survivors’, and disability insurance (9.3%, 4.75% by the employer and 4.55% by the employee); Family compensation fund (1.9% by the employer); Unemployment insurance/supplementary unemployment insurance (1%, 0.5% by the employer and 0.5% by the employee); Occupational accident insurance (0.1% by the employer); Occupational pension scheme (depending on pension plan)
Tax credits and incentives – There are tax exemptions for entities that have an irrevocable charitable, cultural, or ideal purpose without commercial activity, as well as for dividend income and capital gains on participations.
Private Asset Structures may enjoy tax exemptions and are only subject to a minimum tax of CHF 1,800 per annum. To be eligible as a Private Asset Structure, the company must not conduct any economic activity, and its activity should be limited to acquiring, holding, administrating, and selling financial instruments according to the Liechtenstein assets management law as well as cash and bank accounts. Participations may only be held if it can be proved that the shareholders or beneficiaries have no influence on the administration of this company.
There is also a Notional Interest Deduction on Equity, which is a standardised deduction for interest on equity based on the multiplication of the modified equity by the interest rate.
Personal income tax – An individual is deemed to be tax resident in Liechtenstein, if he or she resides or intends to stay in Liechtenstein permanently.
Resident individuals are taxed on their worldwide income, except for profits from, and net wealth in, foreign businesses, foreign branches and foreign immovable property.
Tax rates are progressive up to 8%. There are municipal taxes, which are multiplies that range from 1.5 to 2.5.
Capital gains on movable assets are tax-exempt. Capital Gains derived from local real estate is subject to a Real Estate Profit Tax of 24%.
Other taxes – The sale and import of goods and services are subject to V.A.T. at a standard rate of 8.1%. Reduced rates and exemptions may apply.
A stamp tax is levied on the transfer of securities, tax rate is 0.15% for Swiss and Liechtenstein securities and 0.3% if is issued by non-resident.
A capital duty of 1% is levied on the issuance and increase of the equity of Liechtenstein corporations. However, the first CHF 1,000,000 of capital is exempt from capital duty.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 12.5% Offshore Income Tax Rate
- 12.5% Corporate Tax Rate
- 12.5% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFOAverage cost Inventory methods permitted
- 5.00% Social Security Employee
- 7.25% Social Security Employer
- 28% Personal Income Tax Rate
- 8.1% VAT Rate
- 37 Tax Treaties
Country details
The Principality of Liechtenstein is a small German-speaking landlocked state of alpine Europe that borders with Switzerland to the west and Austria to the east.
It is an enclave that, along with Switzerland, is not part of the European Union, but is part of the Schengen Area.
Its international relations are coordinated with Switzerland (the state with whom it delegates its military defense).
It has an area of just over 160 sq. km and it is inhabited by about 37,000 people. The capital is Vaduz and the most populated city is Schaan.
Liechtenstein is the fourth smallest country in Europe, after Vatican City, Monaco, and San Marino. Its resident population is composed of about a third of foreigners, mainly Germans, Austrians, Swiss, and Italians.
Liechtenstein is a constitutional monarchy, headed by the prince, or Fürst. The sovereignty of the state is shared between the prince and the citizens, who choose a parliament. The parliament of Liechtenstein, the Landtag, is composed of 25 representatives chosen by the people. A five-member chamber is responsible for daily political affairs.
The country has an economic union with Switzerland and uses the Swiss franc as the national currency, although it had its own currency, the Liechtenstein franc.
Liechtenstein is a member of the European Economic Area (an organization that acts as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.
Its economy, despite its small size and scarcity of natural resources, is highly industrialized, free-enterprise oriented and has the third highest per capita income in the world, after Qatar and Luxembourg.
Its economic bases are industrial exports, tourism, and financial services.
Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals, and food products.
It has an important financial center, specialized in financial services for foreign entities and wealth management for non-resident individuals.
Low business taxes and very advantageous incorporation laws have led to a significant number of multinational companies to establish nominal offices in Liechtenstein.
Regarding the primary sector, it produces wheat, barley, corn, potatoes, dairy products, livestock, and wine.