Gesellschaft mit beschränkter Haftung, GmbH (Limited Liability Company)
In Liechtenstein, the Gesellschaft mit beschränkter Haftung (GmbH) is a private limited liability company. It is a separate legal entity with its own rights and obligations, distinct from its shareholders (known as quotaholders). The liability of each quotaholder is limited to the amount of their capital contribution.
Unlike an Aktiengesellschaft (AG), the GmbH is typically more suitable for small to medium-sized enterprises (SMEs), family-owned businesses, or private investment vehicles. Its structure is less formal than that of a joint-stock company and provides greater flexibility in internal governance and ownership arrangements.
The ownership of a GmbH is represented by quotas (not shares), which are not considered negotiable instruments and are not designed for public trading. The transfer of quotas must be recorded in writing and is subject to the approval of the general meeting, unless otherwise provided in the company’s articles of association.
The statutory minimum capital for a Liechtenstein GmbH is CHF 10,000, which must be fully paid in at the time of incorporation. Contributions may be made in cash or in kind; however, non-cash contributions require independent valuation and supporting documentation.
There is no concept of bearer quotas in the GmbH structure. A register of quotaholders must be maintained at the registered office, but this information is not publicly accessible through the Commercial Register.
Management of a GmbH is generally carried out by one or more managing directors (Geschäftsführer), who may be individuals or legal entities. At least one managing director must be a resident of Liechtenstein, ensuring a degree of local substance and regulatory accountability.
The managing directors are responsible for the day-to-day operations and legal representation of the company. Major decisions, such as amending the articles of association or approving quota transfers, fall under the authority of the general meeting of quotaholders.
A registered office within Liechtenstein is mandatory and must be publicly recorded. It serves as the official location for service of documents and maintenance of statutory records.
Although GmbH generally involve a smaller number of participants than AGs, the governance framework can be customized to suit the size and complexity of the business. The articles of association may allow for additional oversight mechanisms, such as supervisory boards or advisory committees, though these are not required by law.
GmbHs incorporated in Liechtenstein are subject to corporate income tax on their worldwide income. The standard corporate tax rate is 12.5%.
As of 1 January 2024, a global minimum tax rate of 15% applies to entities forming part of multinational groups with consolidated annual revenues of EUR 750 million or more, in accordance with international tax reform principles under the OECD’s Pillar Two framework.
Companies with gross assets exceeding CHF 500,000 for each of the past three financial years are also subject to a minimum annual tax of CHF 1,800.
Profits attributable to a foreign permanent establishment (PE) are generally exempt from taxation in Liechtenstein, provided the PE is taxed in its jurisdiction. This mechanism helps mitigate risks of double taxation and is supported by both domestic relief rules and Liechtenstein’s tax treaties.
In principle, capital gains from the sale of financial assets (e.g., securities, participations) are tax-exempt, with exceptions. If the gain arises from the sale of a participation in a foreign legal entity whose income consists predominantly of passive income and which is located in a low-tax jurisdiction, the exemption may not apply.
Similarly, dividends and liquidation proceeds received from such foreign entities may be taxable under anti-abuse provisions designed to discourage the use of low-taxed offshore structures.
Income from investment funds is generally subject to tax unless the fund primarily invests in equity participations. This policy distinguishes between income from active investment strategies and that derived from passive financial holdings.
Liechtenstein does not levy withholding taxes on outgoing payments to non-residents. This includes distributions such as dividends, interest, and royalties. As a result, profits can typically be repatriated to foreign stakeholders without any deduction at source, though recipients remain subject to tax in their own jurisdictions.
A capital duty applies when forming a company or increasing its capital. The applicable rates are:
- 1% for capital contributions up to CHF 5 million,
- 0.5% for the portion exceeding CHF 5 million up to CHF 10 million,
- 0.3% for capital beyond CHF 10 million.
The first CHF 1 million of capital is exempt from duty.
7. Compliance and Reporting Requirements
Liechtenstein GmbH are subject to ongoing corporate compliance, including:
- Annual Commercial Register Notification: Companies must inform the register of any changes to company name, registered office, or management structure.
- Financial Reporting and Audits: If a Sàrl conducts commercial activities, it is required to maintain financial statements. Companies that exceed certain thresholds must appoint an independent auditor and file audited financial statements with the Tax Administration. The thresholds for audit requirements typically consider criteria such as turnover, total assets, and number of employees.
- Local Substance: The requirement for at least one local managing director and a registered office ensures that the company maintains a sufficient presence in Liechtenstein.
The GmbH is governed by Liechtenstein’s Persons and Companies Act (PGR), which is based on civil law principles with influences from Swiss and Austrian company law. Liechtenstein’s membership in the European Economic Area (EEA) provides access to the EU’s single market for certain financial and commercial services, while its close relationship with Switzerland allows for regulatory cooperation and access to the Swiss economic area.
Due to its flexibility, limited liability structure, and moderate compliance requirements, the GmbH is widely used for private business ventures, asset holding, and local or regional operations.
Legal *
Country code – LI
Legal Basis – Civil law (Swiss)
Legal framework – Law on Persons and Companies
Company form – Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH)
Liability - The liability of the members is limited to the amount of their capital contributed.
Share capital – The minimum capital of a GmbH is CHF 10,000. Upon incorporation, the capital must be fully paid up. Capital contributions may be made in cash or in kind. A GmbH is not allowed to issue shares and the shareholders’ rights are assigned by Deed or Bylaws.
Shareholders – A GmbH 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 – A GmbH 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.
- Members not disclosed *
- Members not disclosed *
- Corporate members permitted * *
- Corporate manager permitted * *
- Local manager required * *
- Registered office or agent required * *
- Annual meeting required * *
- Redomiciliation permitted * *
- Electronic signature * *
- Annual return * *
- Audited accounts * *
- Audited accounts exemption * *
- Exchange controls * *
- Civil law (Swiss) Legal basis *
- 1 Minimum members *
- CHF 10,000 Minimum registered capital *
- CHF 30,000 Minimum paid up capital *
- CHFEURUSD Capital currency *
- 100% Foreign-ownership allowed *
- 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.
- Tax transparent entity * *
- 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.