Jurisdictions - Liechtenstein

Business - 

Liechtenstein is one of the few countries in the world with more registered companies than citizens. It has developed into a prosperous, highly industrialised, free-enterprise economy, and boasts a financial service sector as well as a living standard which compares favourably to those of the urban areas of Liechtenstein's large European neighbours.

• Low business taxes—the maximum tax rate is 20%.

Liechtenstein also generates revenue from the establishment of stiftungs ("foundations"), which are financial entities created to increase the privacy of nonresident foreigners' financial holdings. The foundation is registered in the name of a Liechtensteiner, often a lawyer.

Recently, Liechtenstein has shown strong determination to prosecute any international money-laundering and worked to promote the country's image as a legitimate financing center. In February 2008, the country's LGT Bank was implicated in a tax-fraud scandal in Germany.

• Liechtenstein participates in a customs union with Switzerland and employs the Swiss franc as national currency.

The country imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organisation serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.

Taxation -

The government of Liechtenstein taxes both personal and business income and principal (wealth). The basic rate for the personal income tax is 1.2%. When combined with the additional income tax imposed by the communes, the combined income tax rate is 17.82%. An additional income tax of 4.3% is levied on all employees for the country's social security program. This rate is higher for self-employed, up to a maximum of 11%, making the maximum income tax rate about 29% total. Income from employment is taxed through monthly withholdings by employer.

The basic tax rate on wealth is 0.06% and the combined total rate is 0.89%.

Liechtenstein's gifts and estate taxes vary depending upon the relationship the recipient has to the giver and the amount of the inheritance. The tax ranges between 0.5% and 0.75% for spouses and children and 18% to 27% for non-related recipients. The estate tax is progressive.

The rate above is halved if the estate passes to the spouse, children, or parents.

The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in Liechtenstein; the affair broke open with the biggest complex of investigations ever initiated for tax evasion in the Federal Republic of Germany.

On May 27th 2009 the OECD removed Liechtenstein from the blacklist.

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