Economy of Liechtenstein

The economy of Liechtenstein is based roughly equally on services (especially financial services) and industry, with a small but significant agricultural sector. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 85% of its energy requirements. Liechtenstein has been a member of the European Free Trade Association (EFTA) since 1991 (previously its interests had been represented by Switzerland). It also has been a member of the European Economic Area (EEA) since May 1995 and participates in the Schengen Agreement for passport-free intra-European travel.

Economy of Liechtenstein
Vaduz Zentrum
CurrencySwiss franc (CHF)
Statistics
GDPDecrease$3.2 billion (PPP, 2009 est.)
GDP growth
Decrease−0.5% (real, 2009 est.)
GDP per capita
Decrease$141,100 (PPP, 2008 est.)
GDP by sector
Agriculture: 7.1%; industry: 42.8%; services: 50.1% (2008)
Decrease0.2% (CPI, 2011)
Population below poverty line
N/A
N/A
Labour force
35,260, 51% of whom commute daily from Austria, Switzerland, or Germany (2012)
Labour force by occupation
Agriculture: 0.8%; industry: 39.4%; services: 59.95% (2010)
UnemploymentIncrease2.5% (2011)
Main industries
Electronics, metal manufacturing, dental products, ceramics, pharmaceuticals, food products, precision instruments, tourism, optical instruments
External
ExportsIncrease$3.76 billion (2011 est.)
Export goods
Small specialty machinery, connectors for audio and video, parts for motor vehicles, dental products, hardware, prepared foodstuffs, electronic equipment, optical products
Main export partners
n/av
ImportsIncrease$2.218 billion (2011 est.)
Import goods
Agricultural products, raw materials, energy products, machinery, metal goods, textiles, foodstuffs, motor vehicles
0% (2001) debt holder of Switzerland, Austria and US
Public finances
N/A
Revenues$1.29 billion (2011 est.)
Expenses$1.372 billion (2011 est.)
Standard & Poor's:[1]
AAA (Domestic)
AAA (Foreign)
AAA (T&C Assessment)
Outlook: Stable[2]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

History

Liechtenstein's historical customs union with Austria was dissolved in 1919. A customs treaty was signed in 1923 and since its entering into force in 1924, Liechtenstein and Switzerland have been in a customs union with each other and as such the borders between the two countries are open. The German village Büsingen am Hochrhein and the Italian village Campione d'Italia also form part of this customs union (the latter albeit in a de facto manner), which is often referred to as the Swiss customs area.

Liechtenstein utilizes the Swiss franc as its national currency. Swiss border police and customs officers secure its frontier with Austria. Currently there are 21 Swiss border guards stationed in Liechtenstein and 20 Austrian border guards securing its border (as of 2011).

Liechtenstein is a member of EFTA, and joined the European Economic Area (EEA) in 1995 in order to benefit from the EU internal market. The capitalist economy and tax system make Liechtenstein a safe, trustworthy and success-oriented place for private and business purposes, especially with its highly modern, internationally laid-out infrastructure and close connections to Switzerland.

The Principality of Liechtenstein has gone through economic and cultural development in the last 50 years like no other Western country. In the last half century, Liechtenstein has developed from a mainly agricultural state to one of the most highly industrialized countries in the world.

Foreign trade

HK Yaumatei 咸美頓街 Hamilton Street 喜利得門市部 HILTI shop evening
An office of the Hilti Corporation in Hong Kong pictured in March 2010, an example of Liechtenstein's export economy.

Besides its efficient industry, there also is a strong services sector. Four out of ten employees work in the services sector, a relatively high proportion of whom are foreigners, including those who commute across the border from neighboring Switzerland, Austria and Germany. Industrial exports more than doubled in 20 years from $1.21 billion (SFr. 2.2 billion) in 1988 to $2.9 billion (SFr. 4.6 billion) in 2008. Some 15.7% of Liechtenstein goods are exported to Switzerland, 62.6% to the EU and 21.1% to the rest of the world.

The United States has been the most important export market for Liechtenstein in recent times, totaling $561 million (SFr. 876 million); Germany is second, with $479 million (SFr. 748 million) worth of imports, and Switzerland third, with $375 million (SFr. 587 million).

About 32% of the country's revenues are invested in research and development, one of the driving forces of the success of Liechtenstein's economy. Total R&D spending in 2000 rose by 20.7% to approximately $140 million (213 million francs).

Banking and finance

The Principality of Liechtenstein also is known as an important financial centre, primarily because it specializes in financial services for foreign entities. The country's low tax rate, loose incorporation and corporate governance rules, and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. The same factors made the country attractive and vulnerable to money launderers, although late 2009 legislation has strengthened regulatory oversight of illicit funds transfers.

Liechtenstein has chartered 17 banks, three non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. Its 270 licensed fiduciary companies and 81 lawyers serve as nominees for, or manage, more than 73,000 entities (primarily corporations, institutions, or trusts), partly for non-Liechtenstein residents. About one-third of these entities hold the controlling interest in other entities, chartered in countries other than Liechtenstein. The Principality's laws permit the corporations it charters to issue bearer shares. Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all new accounts.

Taxation

Liechtenstein's standard rate of VAT (Mehrwertsteuer) is identical to Switzerland's for it must mirror the latter's continually and is currently 7.7%. The reduced rate is 2.5%. A special rate of 3.7% is in use in the hotel industry.[3]

In July 2015, Liechtenstein and Switzerland signed a new agreement on double taxation, which took effect in December 2016, superseding the previous one from 1995. Some differences on the withholding tax arose, but Switzerland did not agree to introduce this practice to residents of Liechtenstein working in Switzerland.[4]

In November 2016, the parliament of the principality decided with a large majority to introduce an agreement of automatic information exchange with 27 new treaty partners, including Switzerland. Data collection will start in 2018, and effectual exchange of account information is planned for 2019.[5]

Statistics

  • GDP (PPP): $4.826 billion (2009)
  • GDP - real growth rate: 3.8% (2008)
  • GDP (PPP) - per capita: purchasing power parity - $141,100 (2008)
  • Inflation rate (consumer prices): 0.7% (2011)
  • Labor force: 35,440 of whom about 10,440 are natives 7,550 are foreigners; 17,450 commute from Austria, Switzerland, and Germany to work each day (2008)
  • Labor force - by occupation: agriculture: 8%; industry: 41%; services: 51% (31 December 2008)
  • Unemployment rate: 1.5% (December 2007)
  • Currency: Swiss franc (CHF)
  • Exchange rates: Swiss francs per US dollar - 1.3467 (2003), 1.5586 (2002), 1.6876 (2001), 1.6888 (2000), 1.5022 (1999)
  • Fiscal year: calendar year

State budget

  • revenues: $420.8 million
  • expenditures: $420.1 million, including capital expenditures of $NA (2000 est.)

Industries

The principal industries are electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, and tourism.[6]

  • Industrial production growth rate: N/A

Electricity

  • production by source
    • fossil fuel: 3,330 MWh (3.12%)
    • hydro: 76,166 MWh (94.2%)
    • nuclear: none (0%)
    • solar/wind: 1,361 MWh (2.68%)
  • Electricity - production: 80,105 MWh (2010)
  • Electricity - consumption:about 350,645 MWh (2010)
  • Electricity - exports: none
  • Electricity - imports: about 270,540 MWh (2010)

Agriculture

Exports

Imports

See also

References

  1. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  2. ^ Rogers, Simon; Sedghi, Ami (15 April 2011). "How Fitch, Moody's and S&P rate each country's credit rating". The Guardian. Retrieved 31 May 2011.
  3. ^ https://www.vatlive.com/vat-news/liechtenstein-cuts-vat-to-7-7-2018/
  4. ^ Liechtenstein scheitert mit Quellensteuer für Grenzgänger(in German). Neue Zürcher Zeitung (Schweiz). Retrieved 10 December 2017.
  5. ^ Liechtenstein und Schweiz tauschen Kontoinformationen aus(in German). Blick online. Retrieved 10 December 2017.
  6. ^ "The World Factbook — Central Intelligence Agency". www.cia.gov. Retrieved 3 August 2017.
2008 Liechtenstein tax affair

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. It is seen also as an attempt to put pressure on Liechtenstein, one of the remaining uncooperative tax havens, as identified by the Financial Action Task Force (FATF) on Money Laundering of the Paris-based Organisation for Economic Co-operation and Development, along with Andorra and Monaco, in 2007.

Canada–European Free Trade Association Free Trade Agreement

The Canada–European Free Trade Association Free Trade Agreement is a trade agreement between Canada and the member states of the European Free Trade Association (Iceland, Norway, Switzerland and Liechtenstein). Signed in Davos, Switzerland on January 26, 2008, it came into effect on July 1, 2009. The agreement is aimed at eliminating all tariffs on goods between Canada and EFTA members.

In 1999, Canada entered into free trade negotiations with the EFTA. Negotiations concluded successfully in June 2007, and the FTA between Canada and the EFTA States was signed on January 26, 2008. Bilateral Agreements on Agriculture between Canada and each EFTA State were appended to the CEFTA. Both came into effect on July 1, 2009. The agreement eliminates almost all tariffs, with certain agricultural and fishery products being excluded from immediate tariff elimination.Bilateral trade totaled $10.7 billion in 2006 (With Canadian imports from the EFTA valued at $7.6 billion and Exports to the EFTA at $3.1 Billion). Investments between the EFTA and Canada are valued at $22 billion in 2006. The agreement is Canada's first free trade agreement with any European nation.

Energy in Liechtenstein

Energy in Liechtenstein describes energy production, consumption and import in Liechtenstein.

Liechtenstein has no domestic sources of fossil fuels and relies on imports of gas and fuels. The country is also a net importer of electricity. In 2016, its domestic energy production covered only slightly under a quarter of the country's electric supply, roughly 24,21 %. Liechtenstein's national power company is Liechtensteinische Kraftwerke (LKW, Liechtenstein Power Stations), which operates the country's existing power stations, maintains the electric grid and provides related services.

Financial Market Authority (Liechtenstein)

The Financial Market Authority (German: Finanzmarktaufsicht) is the primary financial regulatory agency of the Principality of Liechtenstein. It is an independent, integrated financial market supervisory authority operating under public law and covers all financial markets in Liechtenstein.

Healthcare in Liechtenstein

The nation of Liechtenstein has a universal health care system with decentralized, free market elements through mandated health insurance coverage for every person residing in the country (not necessarily just every citizen).

Hilcona

Hilcona AG is a food processing company in Liechtenstein and one of the most important employers in the country. The company was founded by Toni Hilti in 1935 and operates from its headquarters in Schaan, the most populous town of Liechtenstein. Two of Toni Hilti′s brothers, Eugen and Martin Hilti, would later found the power tool maker Hilti in 1941. In 1961 Hilcona began with the production of frozen food which makes up for 63 % of Hilcona′s revenue today. Since 2017 Bell Food Group holds 100 % of all stakes in Hilcona. The company operates two production plants, one in Liechtenstein and one in Switzerland, and sells its products in nine different countries in Europe.

Hilti

Hilti Corporation (Hilti Aktiengesellschaft or Hilti AG, also known as Hilti Group) is a Liechtenstein multinational company that develops, manufactures, and markets products for the construction, building maintenance, energy and manufacturing industries, mainly to the professional end-user. It concentrates mainly on anchoring systems, fire protection systems, installation systems, measuring and detection tools (such as laser levels, range meters and line lasers), power tools (such as hammer drills, demolition hammers, diamond drills, cordless electric drills, heavy angle drills, power saws) and related software and services.Hilti, a registered trademark of the various Hilti corporate entities, is the family name of the company's founders.

Index of Liechtenstein-related articles

This is an index of Liechtenstein related topics.

International Lottery in Liechtenstein Foundation

The International Lottery in Liechtenstein Foundation (ILLF) was a government authorised and state controlled charitable foundation that operated Internet lotteries. The ILLF pioneered Internet gaming, having launched the web's first online lottery, PLUS Lotto, in 1995 and processed the first online gaming transaction ever. The ILLF supported charitable causes in Liechtenstein, many of which support projects in poorer nations internationally. The ILLF filed for bankruptcy in September 2011.

Liechtenstein Institute

The Liechtenstein Institute (German: Liechtenstein-Institut) is a scientific research center and academic institution in Bendern, Gamprin,

Liechtenstein.The institute carries out research in the history, politics, law and economics of Liechtenstein.

Liechtenstein wine

The Principality of Liechtenstein is a producer of wine. The country has a climate ideally suited for the cultivation of wine with mountain slopes facing southwest, calcareous soils and an average of 1,500 hours of sunshine a year. The hot dry wind during the summer months, known as the foehn aids cultivators by having a sweetening effect.

There are over 100 winegrowers in Liechtenstein which produce red and white wines in which despite the small size of the country can produce a significant variety. Liechtenstein is part of the European wine quality system and the international AOC classification.

List of Liechtenstein billionaires by net worth

This is a list of Liechtenstein billionaires based on an annual assessment of wealth and assets compiled and published by Forbes magazine in 2017.

List of companies of Liechtenstein

Liechtenstein is a principality in the Alps and a microstate. Despite its small landmass of only 160 km² and a population of 38,111 Liechtenstein has a very successful industrial sector and a strong banking industry, making the country one of the most prosperous nations in the world. The domestic unemployment rate is 1,7 % and about 54% of all employees employed in Liechtenstein are commuters from neighbouring countries.

List of foundations established in Vaduz

Many philanthropic, charitable and other not-for-profit foundations are established in Vaduz, Liechtenstein. Liechtenstein is a minimum-tax state with strict laws to protect the privacy of its foundations. Foundations established in Vaduz are guaranteed the privacy of their assets.

National Bank of Liechtenstein

The National Bank of Liechtenstein (German: Liechtensteinische Landesbank) is a bank located in Liechtenstein, based in the capital city Vaduz. Since 1993 it has been listed as a company at the Swiss Stock Exchange, with the majority of shares (57.5%) owned by the Liechtenstein state. As the state is in a customs and monetary union with Switzerland and have adopted the Swiss franc as official currency, the monetary policy and money supply is the sole responsibility of the Swiss National Bank.

Outline of Liechtenstein

The following outline is provided as an overview of and topical guide to Liechtenstein:

Liechtenstein – tiny, doubly landlocked alpine country located in Western Europe, bordered by Switzerland to its west and by Austria to its east. Mountainous, it is a winter-sport destination. It is also a tax haven. Despite this, it is not heavily urbanised. Many cultivated fields and small farms characterise its landscape both in the north (Unterland) and in the south (Oberland). It is the smallest German-speaking country in the world.

Prince of Liechtenstein Foundation

The Prince of Liechtenstein Foundation is a portfolio of private companies, museums, and art collections owned by the Princely Family of Liechtenstein. It is essentially a cap for a multitude of investments, such as the LGT Group, the Hofkellerei Wineries, Wilfersdorf Agricultural and Forest Company, RiceTec, and real estate holdings in Vienna, Austria. As of 2012, there were 15 companies and 2 museums owned by the Foundation. In late 2009, rumors speculated that the foundation was attempting to purchase rights to Vaduz FC. However, this has never been confirmed or denied, as of late 2012. The Foundation also plays national heritage and political roles, opening up a Liechtenstein culture museum, selling the political books that support the royal family, and funding right-leaning politicians.The foundation is a Vaduz-based establishment, created in 1970, to manage assets of the Princely Portfolio. Prince Hans-Adam II was head of the foundation from 1970 through 1984, until his brother Prince Philipp Erasmus succeeded him as CEO, Prince Philipp was also the CEO for LGT Group, before being replaced by his nephew Prince Maximilian in 2006. Before becoming CEO, Prince Philipp was a well-known hedge fund investor, working at the head of many influential investment firms. However, Prince Hans-Adam II is still the main beneficiary of the foundation at the present time. The chairman of Pearson PLC, Glen Moreno, is on the board of trustees at the foundation and also LGT Group. Cuno Pümpin is the chairman of the board of directors at Invision Private Equity AG; he is also a member of the board of trustees at the foundation and LGT Group.

History
Geography
Politics
Economy
Culture
Sovereign states
States with limited
recognition
Dependencies and
other entities
Other entities
System
Issues
Agreements
Ministerial
Conferences
People
Members

This page is based on a Wikipedia article written by authors (here).
Text is available under the CC BY-SA 3.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.