Liechtenstein – a centre for finance and industry

Following the almost complete collapse of Liechtenstein’s economy as a result of the First World War, the country turned towards Switzerland. In particular, by concluding a customs union accession treaty, and by adopting the Swiss Franc as the national currency, the country was able to lay the foundations of remarkable economic growth, which was given further impetus by the introduction of modern and liberal taxation and company law. Over the ensuing decades, not least because of the great degree of political stability and the legal certainty and continuity associated with it, the economy of Liechtenstein was able to benefit from a period of prolonged growth.

Today, Liechtenstein’s economy is highly diversified. In addition to competitive local trade and a globally-orientated ‘high-tech’ export industry, the financial services sector has become extremely significant for the country. Hardly more than 15%, of the active population work in that sector, it is true, but they produce more than one third of the total wealth that is created by the national economy of Liechtenstein.

The 15 banks that are based in Liechtenstein at present specialise in private banking. In this sector, like in the international structuring of assets, the law in Liechtenstein concerning foundations and trusts has acquired special significance.

This service is enhanced by the investment fund and insurance business that has developed consistently over the last few years. More than eighty years of experience, tradition and professionalism in customer care, as well as strict legislation aimed at protecting investors and a highly developed infrastructure, characterise this important financial center.

Liechtenstein belongs to a large number of organisations such as the UNO, the WTO, the Council of Europe, the OSCE and EFTA. By joining the European Economic Area (EEA) in 1995,  in a way that was appropriate to its size, the country gained access to the internal European market whilst, at the same time, maintaining its links with Switzerland, which, by tradition, were very close.

As a globally orientated center of economic activites, Liechtenstein has a vital interest in the implementation of internationally recognised standards worldwide, in particular, in the financial sector. In this regard, preventing the abuse of the financial markets, as well as combating money laundering and the financing of terrorism, are high on Liechtenstein’s list of priorities. In order to achieve these objectives, a large number of initiatives have been introduced in the legal, organisational and personnel spheres. The International Monetary Fund has acknowledged the efforts made by Liechtenstein in this respect, and, accordingly, speaks of the «high level of compliance» that prevails there.