Legal Regulation of the Activities of a Foreign Legal Entity in the Principality of Liechtenstein

Abstract

The history of the Principality of Liechtenstein has always been closely linked to the history of Austria and Switzerland, so not surprisingly Liechtenstein's legal system was heavily dependent on Austrian and Swiss law. The private legal order developed in the Principality makes it possible to build freely the legal relations with their surroundings according to the person`s own will, within the framework of good morality. The law of the Principality of Liechtenstein provides flexible conditions for admitting foreign persons to activities on its territory through, in particular, providing a wide choice of organizational and legal forms of doing business, preferential taxation. Ensuring a favorable investment climate in the Principality is facilitated by an efficient banking system, which is known for its tightly guarded banking secrecy. Despite its small size, Liechtenstein is a developed industrial country and one of the largest financial centers. This is facilitated by the competent and consistent reform of the corporate legislation of the state, its political and economic stability, the implementation of a confidentiality policy with the simultaneous establishment of regulation’s transparency, which makes it possible to suppress the use of the jurisdiction in question for money laundering by unscrupulous business entities. Thus, the legislation of the Principality allows a foreign investor, in particular a foreign legal entity, to protect their assets by “transforming” its separate division into a national (Liechtenstein) legal entity.