Gesellschaft mit beschränkter Haftung, GmbH (Limited Liability Company)
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 30,000. 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 Liechstenstein.
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 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
- Managers 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 30,000 Minimum registered capital
- CHF 30,000 Minimum paid up capital
- CHFEURUSD Capital currency
- 100% Foreign-ownership allowed
- 2017 AEOI
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%.
Capital gains – Capital gains are treated as ordinary income and taxed at the standard rate. However, capital gains derived from the sale of shares are tax-exempt and 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.
Interests – Interests are subject to corporate income tax.
Royalties – Royalties are generally taxable at both federal, communal and cantonal levels. However, some cantons have introduced a patent box regime, where royalties may be tax-exempt or taxed at reduced rates.
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 – Liechtenstein has not formally introduced transfer pricing regulations or documentation requirements, but transactions must be carried out on arm’s length terms.
There are no thin capitalization rules, nor controlled foreign company regulations.
Labor taxes – Employers and employees are required to make contribution 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 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 7.7%. 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% VAT Rate
- 37 Tax Treaties
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 (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 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 centre, specialized in financial services for foreign entities and wealth management for non-resident individuals.
Low business taxes and a 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.
Tax treaties Map
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