Liechtenstein: These Substance Requirements Apply To Liechtenstein Companies

When establishing companies in Liechtenstein, regardless of their legal form, certain substance requirements must be fulfilled. These substance requirements have implications for both corporate law and tax law.

The substance requirements in Liechtenstein vary depending on whether it is an operating company or a holding company.

Operating company

Operating companies are, for example, a bakery, a TT-Service Provider or a bank.

What all these companies have in common is the need for a specific legal license to operate in Liechtenstein. This may involve obtaining a business license for activities such as running a bakery or a management consultancy, a TVTG registration for a TT-Service Provider or a banking licence for a bank.

Based on the specific licence and the business model, the requirements depend on the substance.

For instance, when obtaining a business licence (in addition to the professional qualification of the business manager), a shared office on site and at least one manager with a minimum employment is required. In the case of registration as, for example, a TT-Service Provider or a licence as a bank or asset management company and a correspondingly more complex business model, the substance requirements may be more demanding. This applies in particular to the number and function of the employees and the office spaces.

To comply with tax regulations, this corresponding substance in Liechtenstein should ensure that the place of effective management of the company (where the core of entrepreneurial management is situated) is located within Liechtenstein.

Holding company

A holding company does not engage in any operational activity but has the sole purpose of holding and managing the company's own assets.

As a result, the company does not require a specific legal license for its operations, and therefore, no office or manager is necessary. Instead, a trustee (or a comparable individual) must be a member of the administration of the holding company. The substance requirements are fulfilled by the seat of the trustee in the administration of the company whereby the registered office of the company aligns with the registered office of the trustee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.