The Principality of Liechtenstein is a small state in Europe which has unique qualities as a location for business based on its geographic location, its domestic and foreign politics and its legal and economic framework. The combination of its close relationship to Switzerland and its membership in the European Economic Area (EEA) offers a broad and interesting landscape for financial services providers, industry, trade and investors.
Liechtenstein is a financial center that offers numerous advantages for entrepreneurs and wealthy individuals. With its headquarters in Liechtenstein and its focus on wealthy private customers and mid-sized enterprises, BENDURA BANK AG serves a sophisticated set of clients, who benefit from the unique advantages Liechtenstein has.
Let’s explore all of them.
1. Stable Social, Legal, and Economic System
Liechtenstein has a remarkably stable social, legal, and economic system. The country is committed to uphold a robust legal framework that makes sure businesses operate in a predictable and secure environment. The high standard of living, low crime rates, and cohesive society reinforce the social stability in the country. This combination fosters confidence among businesses owners and investors, offering a very solid foundation for long-term business planning and growth.
2. High Degree of Political Continuity and Stability
The country has a long history of political continuity, that’s the cornerstone of Liechtenstein’s appeal. Under a constitutional monarchy that balances power effectively, the country has a unique stability that translates into a reliable and predictable business climate, there are no risks associated with political upheaval. Especially for entrepreneurs, this means operating in a stable environment where strategic business decisions can be made with certainty.
3. Liberal Economic Policy
Liechtenstein’s liberal economic policy is designed to encourage entrepreneurship and investment. The government maintains a hands-off approach, allowing market forces to operate freely while providing necessary regulations to ensure fair competition and protect consumers. The government constantly optimizes framework conditions that promote innovation, reduce bureaucracy and support flexibility. For international entrepreneurs, this liberal economic environment facilitates easier market entry and expansion. The size of the country also means short decision-making channels in all matters.
4. Liberal Corporate Law
The principality’s liberal corporate law is another significant advantage. The country offers flexible corporate structures, including foundations and trusts, which provide several benefits for asset protection, succession planning, and confidentiality. This legal framework is specifically designed to accommodate diverse business needs and to make it easier for entrepreneurs to establish and manage their enterprises in the country. This flexibility is an advantage for wealthy individuals who are looking for more efficient and secure ways to manage their assets and business interests.
5. Moderate Corporate Taxation, Flat Tax of 12.5%
Liechtenstein’s corporate tax regime is one of its more attractive advantages, featuring a flat rate of 12.5%. This rate is significantly lower than in many other European countries, which means substantial savings for businesses. The tax system in Liechtenstein is straightforward and easy to navigate, reducing administrative hurdles. For international entrepreneurs, this tax regime enhances profitability and encourages reinvestment.
6. Solid Financial Policy in Government Budgeting
Liechtenstein’s government adheres to a prudent financial policy with sound budgeting and fiscal responsibility. The principality consistently has balanced budgets and is debt-free. The government expenditure is the lowest of all European countries, at just over 20%. This also contributes to economic stability and resilience; the country is protected against economic shocks. For businesses, it creates a secure and stable economic environment, favoring long-term planning and investment.
7. Strong Swiss Franc as Official Currency
The official currency of Liechtenstein is the Swiss franc (CHF), a stable, strong and globally respected currency. The Swiss franc is known for providing a reliable financial environment for businesses, due to its strong purchasing power and low inflation rate. Entrepreneurs who are dealing in international markets are benefited from this, as its stability simplifies financial planning and reduces currency risk. This makes Liechtenstein an attractive base for global operations.
8. Flexibility, Short Routes to Decision-Making
Liechtenstein has a surface area of 160 km2, making it the sixth smallest state in the world. The principality’s size offers a unique advantage: it offers flexibility and efficiency in decision-making processes. The country’s size and streamlined administrative procedures mean that regulatory approvals and business decisions can be made swiftly. Businesses can respond quickly to market changes and opportunities, which is a huge competitive advantage.
9. Large Capital Strength of the Government
Liechtenstein’s government has substantial capital strength, which supports a robust economic infrastructure. This financial capability enables the government to invest in high-quality public services, advanced infrastructure, and economic and innovation development initiatives. A well-supported economic environment with enviable public services and infrastructure facilitates smooth business operations and growth.
10. Banking Law with Strong Protection of Privacy
Liechtenstein is committed to protect the legitimate interests of clients of the financial center, including, most importantly, the right to confidentiality and privacy. The country’s banking sector offers a secure and professional structure recognized at an international level, which attracts wealthy individuals and businesses seeking discreet and secure banking services. BENDURA BANK AG, headquartered in Liechtenstein, is well-positioned to provide these financial services, making it an appealing choice for international clients.
11. AAA Country Rating by Moody’s and Standard & Poor’s
Just a few countries can say they’re debt-free, Liechtenstein is one of them. Liechtenstein has consistently received AAA ratings since 1966 from major credit rating agencies such as Moody’s and Standard & Poor’s. The consistency and top-tier ratings reflect the principality’s strong economic fundamentals and stability. An AAA rating means a low-risk environment, a stronger investor confidence and a more solid financial security. Entrepreneurs can leverage this strong credit rating to attract investment and grow their businesses with greater assurance.
12. Niche Products Compatible with Europe
Liechtenstein and its government strive to understand people that want to establish their businesses in the country. For that reason, the country has a unique offer of niche services with trust companies, banks, asset managers, investment fund providers, insurers, auditors, and lawyers. The country’s ethos is to help businesses start and grow, and the government is constantly working to create the best conditions for this to happen.
Transforming Complexity into Tailor-Made Solutions
Liechtenstein’s combination of all these factors makes it an ideal location for entrepreneurs and businesses, providing a solid foundation for success. With its highly qualified and motivated employees and assets under management of around 3.5 billion Swiss francs, BENDURA BANK AG ranks among the largest banks in the financial center of Liechtenstein, supporting international clients in their financial success.
Source: www.bendura.li